samchain/econo-pairs-v1 huggingface dataset:
We don’t see many positive effects from the ECB’s policy in other ways either: economic growth is fragile at 1.5%, unemployment stands at 10%, with youth unemployment as high as over 20%. You can’t really give the ECB good marks for that? If the ECB had not taken the measures that it did, we would be in a depression; I’m convinced of that. And a depression would be much worse than what we are experiencing today and worse than what we went through over the past decade. Let me recall: after the banking crisis, we had a severe recession in 2009 and the economy then recovered in 2010 and 2011. This was followed by the debt crisis – centring on the sovereign debt of several European countries – which plunged the European economy into another recession. This recession was not as deep as the one in 2009 but it did last longer, because it took us two years to get over it. Economic growth picked up again somewhat at the end of 2013 and in 2014, but as of the spring of 2014 we saw another slowdown in growth and were at risk of running into a third recession. In January 2015, ECB President Mario Draghi announced that the ECB would pursue a policy of quantitative easing: we now print money and pump it into the economy in order to help ease credit conditions. Were it not for the monetary policy of recent years, we would certainly have landed in a deep recession.

The euro area might have fallen apart and that would have been a catastrophe. The ECB therefore did what it had to do, but monetary policy cannot resolve all problems. We have always said that politicians have to do their job. They must carry out structural reforms, reduce government debt and create a more flexible labour market. That would contribute to a smoothly functioning economy. Owing to ECB policy, interest rates are extremely low, there’s no longer any return on savings. So people are tempted to take more risks with their money, by buying shares or real estate for example. This pushes up prices and may give rise to bubbles that suddenly burst, resulting in serious financial disasters. Is that a real danger? Absolutely, that is an important point. The ECB’s policy undoubtedly has unintended consequences. In some countries, there is a risk that real estate prices or some equity and other financial markets are increasing in a way that is too rapid or artificial. We are keeping a close watch on that and interventions to avoid bubbles are possible if need be. The emergence of bubbles is a justified concern. But if the ECB were not pursuing its current policy, the financial concerns would be even more serious because the economy would be in poorer shape. When and how are we going to move back towards normal interest rate levels? What needs to happen before the ECB will start to discontinue its exceptional policy?
A weakness in the current criticism is that it takes the advantages I have just outlined too lightly, or in other words underestimates the benefit of maintaining confidence in an already formulated inflation target. I also think that the criticism overestimates the possibility of managing the debt and housing problem by using the repo rate. I will explain what I mean in more detail shortly. The criticism: Lower the target or accept long term low inflation It is easier to discuss the criticism if we divide it up based on the conclusions drawn from it. Different commentators have put forward roughly the same arguments in favour of the Riksbank reconsidering its policy, but they have drawn slightly different conclusions about what the consequences should be for the inflation target. Some have claimed that the inflation target is outdated or that it should be lowered. 2 Others have not gone as far, but instead said that the Riksbank should keep the 2 per cent target but accept that inflation will continue to remain below the target for a long time to come. 3, 4 My perception is that the criticism has gradually aligned itself with the latter view, but I still want to say something about the argument that the inflation target should be lowered, as that discussion is important in principle.

Two sources of potential stress should, however, be mentioned. First, a slowdown in the economy which, though unlikely, is still conceivable - could have negative repercussions on the quality of loan portfolios and on stockmarket prices. Second, in the more likely event of a sustained economic upswing, a sharper-than-expected rise in interest rates could also worsen the quality of loan portfolios by increasing the interest burden on households and companies more than expected. Analysis of the various scenarios suggests that sufficient capital is available in the Swiss banking sector to withstand even a substantial deterioration in the economic or stockmarket climate or a sharp rise in interest rates. Nevertheless, some banks have announced that they now have an increased appetite for risk. A general rise in risk acceptance would render the banking sector more sensitive to deteriorations in the macroeconomic or stockmarket environment. System oversight At the media conference in December last year, I reported in detail on the background to system oversight, i.e. the oversight of payment and securities settlement systems. Today I am limiting myself given the recent publication of the Financial Stability Report - to a briefing on the current situation. The day on which the new National Bank Act took effect - 1 May 2004 - also saw the entry into force of the new National Bank Ordinance. Among other things, the Ordinance contains the implementation provisions for system oversight.
Ce rôle est souligné par l’annonce d’une valeur de référence quantifiée pour la croissance d’un agrégat monétaire large, à savoir M3. La valeur de référence pour 1999 a été fixée à un taux annuel de 4,5 %. Il convient de noter que le concept de valeur de référence n’implique pas l’engagement pour le SEBC de corriger de façon automatique les écarts susceptibles d’apparaître à court terme entre la croissance monétaire et la valeur de référence. Mais la valeur de référence pour M3 est compatible avec le maintien de la stabilité des prix à moyen terme et permettra de réaliser cet objectif. - le second pilier de la stratégie de politique monétaire est une évaluation d’ensemble des perspectives d’évolution des prix dans la zone euro considérée dans sa totalité. Il est dès lors important de suivre une large gamme de variables économiques et financières comme indicateurs de l’évolution future des prix. La décision coordonnée, prise en décembre, de ramener les taux d’intérêt à 3 % a permis à la BCE d’annoncer que le nouveau niveau des taux d’intérêt prévaudrait “ dans un avenir prévisible ”. La politique monétaire unique ne peut à elle seule assurer la stabilité des prix si elle n’est pas accompagnée d’une discipline budgétaire appropriée dans l’ensemble de l’Union économique et monétaire. Pour ma part, je citerais trois justifications économiques aux dispositions du traité qui ont donné naissance au Pacte de stabilité et de croissance.

Monsieur Trichet éclaire les conditions du succès de l’euro Discours de Jean-Claude Trichet, le Gouverneur de la Banque de France, à la conférence de la Banque Centrale de Hesse tenue à Francfort le 22/2/99. Monsieur le Président, Mesdames et Messieurs, c’est un grand plaisir et un honneur pour moi d’intervenir ici, à l’invitation de la Landeszentralbank de Hesse et du Center for Financial Studies de l’Université de Francfort, en compagnie de conférenciers aussi remarquables. Aussi je tiens à vous remercier de me donner l’occasion d’évoquer avec vous l’Union monétaire européenne et l’avénement de l’euro. Il y a un peu plus d’un mois, s’est produit un événement unique dans l’histoire de l’Europe. L’euro est né et le caractère irréversible de ce changement a convaincu un nombre croissant d’acteurs de la scène politique et économique que le succès de l’euro était une nécessité pour l’Europe et le reste du monde. Il représente la clé de voûte du marché unique européen qui assurera la prospérité en Europe. Mais, pour rendre ce succès durable, nous allons devoir affronter, aujourd’hui et demain, un certain nombre de défis. Les banques centrales sont au cœur du passage à l’euro, à la fois au niveau européen et au sein de leurs économies nationales.
5 This includes recapitalisation measures, asset relief interventions, liquidity measures and guarantees. For  2009, the numbers as a percentage of GDP are around 12 % for Netherlands, 8 % for Germany, 5.4 % for Spain and 5 % for France. See Financial Crisis Aid amounts for a more detailed breakdown. 6 Laeven, L. and F. Valencia (2013), “Systematic banking crisis database”, IMF Economic Review, 61(2): 225–  270. 7 E.g. Diamond, D. and P. Dybvig (1983), Bank runs, deposit insurance and liquidity”, Journal of Political  Economy, 91(3): 401–419; Cooper, R. and A. John (1988), “Coordinating coordination failures in Keynesian models”, Quarterly Journal of Economics, 103(3): 441–463; Calvo, G. (1988), “Servicing the public debt: the role of expectations”, American Economic Review, 78(4):647–661. The search and matching literature also exhibits multiple equilibria, e.g. Diamond, P. (1982), “Aggregate demand management in search equilibrium”, Journal of Political Economy, 90(5): 881–894. 8 Gertler, M. and N. Kiyotaki (2015), “Banking, liquidity and bank runs in an infinite horizon economy,” American  Economic Review, 105(7): 2011–2043. 9 Eggertsson, G. and M. Woodford (2003), “The zero bound on interest rates and optimal monetary policy”,  Brookings Papers on Economic Activity, 34(1): 139–235; Woodford (2012) “Methods of Policy Accommodation at the Interest-Rate Lower Bound,” presented at the Jackson Hole symposium, August. ; Nakov, A. (2008), “Optimal and simple monetary policy rules with zero floor on the nominal interest rate”, International Journal of Central Banking, 4(2): 73–127.

Namely, the final report on the Needs Analysis Programme for the National Bank of the Republic of Macedonia contained 138 recommendations addressing the gaps in terms of the EU benchmarks established in 11 areas of central banking. It is my pleasure to point out that some of them have already been implemented, and some of them have been incorporated in the Strategic Plan of the NBRM, that is in the National Bank’s Plan of Activities for this year. However, the overall implementation of the recommendations will require additional technical assistance in terms of experience and knowledge of the ECB and the national central banks of the EU. Therefore, the inclusion of the NBRM in this regional project, which aims to facilitate the preparations for the implementation of the recommendations we received in the report on the Needs Analysis Programme for the NBRM, by establishing a Plan for their implementation, is very important. It will be the basis for the preparation and the implementation of a subsequent project, as well as the basis for further planning and promotion of the bilateral cooperation with the central banks with which the NBRM already has a traditional cooperation, but also for the establishing of a cooperation with other European central banks. The implementation of these and similar projects by the ECB and the EU in recent years, unequivocally confirms their continued determination, commitment and dedication to assist the central banks of the Western Balkan countries on their way to joining the ESCB, and later the Euro system.
In my remarks, I am going to focus only on the set of unconventional monetary policies that are relevant today in an environment in which central banks are constrained from lowering their policy rate any further due to the zero lower bound. I will not discuss the type of extraordinary interventions that occurred at the height of the financial crisis.1 A starting point is that the independence of the central bank with respect to its budget supports its overall independence. The Federal Reserve’s traditional monetary policy framework has helped to assure this budgetary independence. The liability side of our balance sheet consisted primarily of currency and reserve balances on which we did not pay any interest. The asset side consisted primarily of Treasury securities. There was no meaningful credit risk and the interest rate risk was limited because assets were generally held to maturity. This, combined with the zero cost of the Fed’s liabilities, resulted in the Federal Reserve turning over a large amount of earnings to the Treasury each year after covering all of its operating costs and retaining a small portion of its earnings to maintain a level of surplus capital equal to the amount of capital paid-in by member banks. Thus, one key question is how this budgetary independence might be threatened through the use of unconventional monetary policies. After all, some of these policies do have implications for the Federal Reserve’s remittances to the Treasury and, thus, could conceivably create a potential threat to the Federal Reserve’s budgetary independence.

We determined not to take any action because of the fact that oil prices had attained  2  BIS Review 86/2005  record heights just before our monetary policy assessment. It was not possible at the time to fully assess the impact on the economy and on inflation. If monetary policy had remained the same at this assessment, the medium-term inflation outlook would once again have been unchanged. In the meantime, however, the room for manoeuvre available to monetary policy has declined. Our inevitable concerns with respect to the high price of oil in September have been dissipated by the favourable developments in the economy. As a result, we have decided to increase the target range for the three-month Libor by 0.25 percentage points. Consequently, this decision is in line with the statements we made at the last monetary policy assessment. Inflation forecast graph I now turn to the current inflation forecast, which is based on the assumption of a change in the threemonth Libor, to 1.0%. The graph depicts the current and the previous forecasts. The dashed red curve represents the new forecast, which covers the period from the fourth quarter of 2005 to the third quarter of 2008. It summarises the inflation outlook, following today’s increase in the rate of interest. The dash-dotted green curve shows the inflation forecast at the time of the last monetary policy assessment and is based on a three-month Libor of 0.75%.
Karolina Ekholm: How can financial crises be avoided in Sweden? Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, at a meeting at Handelsbanken, Stockholm, 27 September 2012. *  *  *  The views expressed in this speech are my own and are not necessarily shared by the other members of the Executive Board of the Riksbank. I would like to thank Jill Billborn, Johanna Fager Wettergren and Per Åsberg-Sommar for their great assistance in the writing of this speech. Four years after the financial crisis broke out, we are still living with its consequences: a sovereign debt crisis in the euro area, sluggish recovery in the United States and United Kingdom, with unemployment entrenched at high levels and a world beyond Europe and the United States that is finding it hard to adjust to the fact that their most important export markets are faltering. The realisation that the costs of financial crises are dreadfully high has led to a general understanding that economic policy must focus much more on preventing such crises. Here in Sweden, we have coped relatively well through the recent turbulent years. But, even here, unemployment remains on a high level – and part of the high Swedish growth rate has merely been a recovery from the great fall in GDP in 2008 and 2009.

The level of the countercyclical capital buffers will be determined  6  This refers to Core Tier 1 capital in relation to risk-weighted assets. 7  FSB (2011), “Policy Measures to Address Systemically Important Financial Institutions”, 4 November 2011. 8  See, for example, Financial Stability Report 2012:1, Sveriges Riksbank. 4  BIS central bankers’ speeches  by the relevant authorities on the basis of quantitative and qualitative assessments. Among other data, the quantitative assessment will take into account the so-called credit gap, which is how far credit growth deviates from an estimated trend. But this is a fairly rough measure of the degree of risk in the system, and other measures and assessments may also be fairly important. The aim of the countercyclical capital buffers is primarily to strengthen the banks and the resilience of the financial system. One effect of introducing the buffers will be to moderate the fluctuations of the credit cycle. In an upturn, substantial credit expansion will activate the buffers, which means that the banks will gradually have to hold more capital. This will restrict lending and thus reduce the risk of exaggerated credit growth and rising asset prices. In a situation in which lending is being tightened, the banks’ capital will be freed up as the buffer requirement is reduced. The banks will therefore not need to reduce their lending to the same extent, which would otherwise reinforce the downturn.
I tell the Bank’s new entrants I can promise them only one thing: they will be telling their families and friends about this moment in history and, uniquely, they can write its next chapter. As a public servant, this is as good as it gets. Any lengthy career in public policy will inevitably be punctuated by crisis. In my case, crises have provided not just the punctuation marks, but most of the words, sentences and paragraphs too. In public policy, crises are the ultimate learning experience. They are also the moments when the Overton window of opportunity is widest and the opportunity for change greatest. Crises are moments of challenge and opportunity in equal measure. I am very fortunate to have experienced plenty of both. My time of the Bank has been evenly split between its twin statutory functions, monetary and financial stability. These functions, embedded in the Bank’s Royal Charter in 1694, remain its statutory centrepiece today. (The Bank’s third objective, fighting the French, has by contrast tended to be downplayed.) Over the intervening 327 years, both monetary and financial stability have had their fair share of challenges and opportunities. These have perhaps come thicker and faster over the past 27 years than the preceding 300. I want to offer a few retrospective thoughts on the evolution of monetary and financial stability over the past 30 years before turning to central bank communications, a crucial ingredient of both. Bank of England policy frameworks and practices have undergone an astonishing transformation over that period.

2014 is very different from the time of the Asian Financial Crisis in 1997 when Emerging Asia only accounted for 18% of global trade and 17% the World’s GDP. Today, Emerging Asia makes up of 25% of global trade and 28% of the world’s GDP. Moreover, the world has become so much more interconnected through the trade, FDI and financial market channels. It is all too easy to give too much credence to the “decoupling” theory than it deserves, as many people did when they over-rated the prospects of the EMEs when the advanced economies were having very difficult times after the eruption of the Global Financial Crisis. So the advanced economies also need to understand and watch out for the developments of the EMEs and their spillover effects. 5. Finally, I wish the Conference every success and all the participants a very pleasant stay in Hong Kong. Thank you. 2  BIS central bankers’ speeches
And because we share similar experiences – still fresh in our memories – of major banking crises in the Nordic countries, we have perhaps a head start when it comes to recognizing and trying to deal with these challenges on a Nordic level, even if much worksstill remains. Here, I might add that integration on a pan-Nordic level has also come a long way in the area of securities exchanges and clearing and settlement facilities. Of course, the integration of the financial infrastructure poses similar challenges for authorities to cross-border banking and some additional complications as well. However, today I will focus on the challenges posed by cross-border banks. And I must stress that these challenges are not merely a regional problem. Due to the dynamic changes in the banking landscape, they will indeed require solutions on a European level. My main message today is that increased coordination is imperative, and, in this, it is vitally important that future arrangements for supervision, crisis management and crisis resolution of cross-border banks must be dealt with jointly as a package, and not in isolation from each other. It is apparent that the solutions in any one of these areas will depend on the solutions in the other areas. In particular, it will be necessary to address the issue of burden-sharing arrangements for the eventuality that a border-crossing bank becomes insolvent. If we don’t, there is a great danger that crisis management fails and valuable time will be lost.

During this period, the Albanian banking sector continued to increase its lending to the economy, albeit at lower paces. Difficulties added to the real sector of the economy and the exchange rate depreciation by about 12% in 2009 were followed by decreased credit quality and increased bank provisions to face the credit risk. Distinguished participants, The pre-crisis phenomena and those that occurred in 2008–2010, offer a valuable experience to economic actors and public authorities of each country in our region. Not to mention all, I would like to dwell only on some of them, which I consider important for enhancing the sustainability of our economy and of the financial system in the future. First, the region needs a better balance in the factors supporting the sustainable economic growth. I think that the public authorities should assign priority to increase in investments and implementation of stimulus policies for developing the competitive sectors. In this way, the country’s export capacity would grow by creating better conditions for a sustainable improvement of the external balance of our economy. 2  BIS central bankers’ speeches  Second, closely related to the first issue, I would highlight the need for undertaking and deepening the structural reforms. This strategic objective remains a constant priority for each of our economy.