samchain/econo-pairs-v1 huggingface dataset:
6  BIS central bankers’ speeches

We can expect stronger domestic price pressures over the next few years, and hence slightly higher inflation than we have seen historically. Slightly higher inflation does not mean runaway inflation. MAS will remain vigilant and calibrate monetary policy to ensure that this does not happen. We will not allow inflationary pressures to become entrenched or inflation expectations to build up. Managing risks to economic and financial stability MAS is preparing for risks to economic and financial stability posed by escalation of Eurozone crisis Besides watching growth and inflation trends, MAS has been focusing on downside risks to Singapore’s economic and financial stability. We monitor the risks closely, take steps to mitigate these risks where we can, and draw up contingency measures to manage them if they materialise. The key risk facing the Singapore economy and financial system is the ongoing crisis in the Eurozone. While Eurozone governments have taken important steps to deal with crisis, we must be prepared for a more adverse turn of events. The escalation of the Eurozone crisis can affect Singapore in three ways: first, the impact on economic growth; second, stresses on our financial markets; and third, the safety and soundness of our financial institutions. Let me begin with economic growth. A deeper recession and credit crunch in Eurozone can impact our growth through trade and financial channels. The trade channel will be more direct and impactful. The Eurozone is our largest export market, and Singapore’s exports to the Eurozone have been declining since Q3 last year.
We have  BIS Review 115/2008  3  experienced many years of extremely good economic growth and low inflation. Now we must be prepared for high inflation, higher interest rates and lower employment possibly leading to a deterioration of the finances of many Swedish households over a couple of years. Monetary policy often comes into focus in this type of situation. The recent debate – is the Riksbank chasing inflation spectres? The Riksbank’s interest rate increases have been much discussed recently. It has been said that the Bank is chasing a non-existent inflation spectre, that the inflation target should be scrapped or reformulated, and that the Riksbank should take more notice of economic activity than inflation. To begin with, inflation is a real problem for many households. Inflation means that everyone gets less for their money. Oil, electricity and food prices have risen substantially. These goods are an important part of household consumption. Together food and energy comprise approximately one quarter of the CPI. The fact that, for instance, oil and food prices have risen so much here in Sweden is largely because these goods have become more expensive in the world market. Should the inflation target be reformulated? Some of the recent criticism has concerned whether the inflation target should apply to some other measure than the CPI. The idea is that monetary policy should stabilise around a measure of inflation that excludes import prices. The Riksbank is in any case unable to affect prices in the world market.

The Fund has invested considerable efforts in promoting transparency and developing standards and codes in cooperation with the World Bank, the Bank for International Settlements and other organizations. Remarkable progress has been made in this area but we realize that broad implementation of these standards will take time, although this is time well spent as improved practices and comparability will increase the stability of the international financial system. We believe that the next steps should be to harmonize accounting standards at world level. The Nordic-Baltic Constituency encourages all member countries to support the efforts of the International Accounting Standards Board to reach a consensus on accounting standards and principles. Furthermore, we welcome the new steps taken to increase the Fund’s transparency, especially the policy of moving to presumptive publication of all Article IV reports and the required publication of documents in exceptional access cases. Promoting Economic Progress among Low-Income Countries One of the greatest challenges of our time is to win ground in the battle against poverty. All parties must be fully engaged in this campaign. Many initiatives in recent years have borne fruit but there is still a long way to go and the international community must do better in order to achieve the Millennium Development Goals (MDGs). Here, I would like to focus on trade and its importance for development.
Jean-Claude Trichet: EMU and the euro - successes and challenges Speech by Mr Jean-Claude Trichet, President of the ECB, delivered at the conference “The Euro Five Years After”, Amsterdam, 12 October 2004. *  *  *  Ladies and gentlemen, it is a great pleasure to share some thoughts on the European Monetary Union with the distinguished attendance gathered in this conference by the European Commission and the EU Presidency. The establishment of the new currency - first in book-entry form and successively in its full physical embodiment - has made western Europeans fully part of a more integrated area and is substantially contributing to reinforce their European identity. More recently, the enlargement of the Union, and in particular the inclusion of the new democracies of Central and Eastern Europe, has represented yet another grand contribution of Europe to the diffusion of free institutions, the safeguard of geopolitical stability and peace, and the promotion of economic progress on a global scale. We have decided to build a larger and peaceful Union of people to which the rest of the world can look for encouragement and example. It is around these themes that I will organise my few remarks today. My purpose will not be that of communicating a sense of complacency over past achievements. I will try to convey in my words the visionary drive towards action that still inspires the process of institutional transition in our Continent.

If one also takes into account the depreciation of the domestic currency against $ as at end-November, the stock market of Thailand has fallen by 71% from its peak this year, Malaysia by 69.7%, Indonesia by 64%, Korea by 61% and BIS Review 116/1997  -2-  the Philippines by 61%. Even Singapore’s stock market suffered a 35.7% drop in $ terms, which is comparable to the 37.7% fall in the Hang Seng Index. Only Taiwan recorded a lower fall of 31%, whereas the Nikkei also lost 28%. I quoted these figures in order to illustrate the magnitude of the turmoil and its contagion effects on the asset markets in the region. Singapore, which is a strong economy and given a triple-A rating by the international rating agencies, adopts a managed floating rate regime, but such regime has not insulated its asset markets from the regional turmoil. In terms of interest rates, Singapore’s one month interbank rate rose by almost 5 times to 16% on 27 October from around 3.6% on 2 July. Singapore’s one month rate is now 6.25%, which is still significantly higher than the level in early July. In the case of Hong Kong, the one month rate rose also by around 5 times from 6% in early July to a high of 30% on 23 October. At present the one month rate in Hong Kong is around 7.5%.
GDP per capita and labour productivity in Sweden and abroad 1(a ) GDP per capi ta  1(b) La bour productivi ty  110  110  105  105  100  100  95  95  90  90  85  85  80  80  00  02  04  06  08  10  12  14  16  00  02  04  06  08  10  12  14  16  Note. Index, 2007 = 100. Sources: Bureau of Economic Analysis, Consensus Bureau, Conference Board, Eurostat, Japanese Ca bi net Office, Ja panese Statistics Bureau, Office for National Statistics, Statistics Sweden and Sta ti stics Ca nada  The long recovery after the crisis is also reflected in the fact interest rates in many countries are still very low. Central banks reacted quickly when the crisis broke out and cut policy rates to close to zero to avoid a further deepening of the crisis (see Figure 2(a)). Inflation also fell sharply in many countries (see Figure 2(b)). This was partly because the price of oil fell heavily and inflation recovered relatively quickly to begin with. But since then, it has remained at levels some way below many central bank targets. Figure 2.

But one can often nevertheless have some suspicion of what might happen, even if it may be difficult to quantify. My impression is that there are risks on the domestic side that are not conspicuous or visible yet but may build up. Although resource utilisation is low and unemployment is high at present, the labour market is constantly improving and we have had to revise our forecast for employment up several times. The shortage figures are also rising. The levels may not be alarming, but an upward trend is clear. And there is a clear risk that labour shortages may arise further ahead. During the previous economic upturn a labour shortage arose fairly early, despite relatively high unemployment, and it is easy to forget that the major theme before the crisis was the severe problems in obtaining skilled labour. Although structural reforms have been made, it is difficult to say how great an effect they will have, and at what range. If monetary policy is too expansionary for too long, and the wheels are allowed to spin too fast, this could create problems with bottlenecks, if not during the forecast period then immediately thereafter. Household borrowing is also a risk factor, and perhaps an even larger one, in the slightly longer run. A lower repo rate means there is a risk that the debt ratio will continue to build up from already high levels.
Subsequently, growth in labour costs picked up, and the rise in prices for goods and services produced for the Norwegian market accelerated. The upturn peaked in 1997, with mainland GDP  BIS Review 43/2003  1  growth approaching 5 per cent. In 1997 and 1998, the economy shifted from an upturn with high growth rates to an expansion with lower growth but low unemployment, labour shortages in many sectors and strong growth in labour costs. Capacity utilisation in the mainland economy has subsequently fallen again and is now on a par with the level in the years 1995-1997, before cost inflation accelerated. The output gap has again closed. At the same time, wage growth has dropped to a more sustainable level. Labour costs rose more rapidly in Norway than among its trading partners due to the high pay increases negotiated by the social partners during the period of strong economic expansion after 1997. Until 2000, this was counteracted by the depreciation of the krone. Companies with income in foreign currency could cover the higher labour costs with the increased revenues which were a result of the weaker krone. When the krone began to appreciate, however, it did not take long before relative labour costs measured in a common currency rose sharply. Despite this development, the strong wage growth continued. This contributed to a deterioration in the exposed sector’s competitiveness. Despite a pronounced downturn among many of our trading partners last year, annual wage growth in Norway increased to 5¾ per cent.

Within the context of the exercise of the asset quality review the non-performing exposures of the banks were increased by € billion, out of which come, of course, the € billion that have to be adjusted. Another measure of the strictness of the exercise is given by the fact that the combination of the AQR with the stress test results in a drop in the median capital ratio of the banks of 4 percentage points, which is higher than in previous exercises. And in terms of billions, this means that the exercise leads to a decrease of € billion overall for all the banks, out of which € billion corresponds to the capital shortfall, meaning the banks that came below the threshold of 5.5%. But this is a measure of the strictness of the exercise that it had such an impact on the balance sheet of the banks, and it’s a usual measure of the impact of such types of exercises. But it’s also a measure of the resilience of the system because, in spite of this drop of € billion, the vast majority of banks stayed above 5.5% and were able to support such a shock, and still have a capital ratio above the threshold. And let me underline that the threshold of 5.5% is well above the regulatory minimum, because as you know the regulatory minimum for common equity capital ratio will be in 2018 4.5%, so we have chosen a more demanding threshold.
Our tight monetary policy stance since October prevents a deterioration in the price setting behavior by keeping inflation expectations under control. Thus, we expect that inflation will follow a downward trend as the accumulated effects of the temporary price movements on annual inflation gradually fade away. Thus, we estimate that inflation will display a notable decline particularly in the last quarter of 2012. Before moving on to the risks regarding the inflation outlook, there is a particular subject I would like to touch upon. As you might have noticed, I have given an inflation forecast that exceeds our end-year inflation target of 5 percent. This is because we think that pulling inflation towards the target by end-2012 would prove to be quite costly. Reducing inflation from the current level of 10.45 percent to 5-percent-target within 12 months would lead to unfavorable fluctuations in economic activity; accordingly we think that it is more reasonable to bring inflation back to the target in one and a half year. Thus, our baseline scenario envisages inflation to reach the target of 5 percent by mid-2013 (Chart 17). However, the target might be attained by the end of 2012, should the risk appetite improve markedly in the forthcoming period and the capital flows towards emerging economies re-accelerate, leading to a stronger appreciation of the Turkish lira than assumed in our baseline scenario.

Also, there is a box that scrutinizes the steps taken to solve the debt problem in the euro area, which points out to the role of structural problems such as the marked divergence in member countries’ competitiveness in hindering stable growth in the euro area. There is also a box exploring the rebalancing process in domestic and external demand thanks to the policies implemented last year. Titles of the boxes are shown on the slide. All of these boxes include important analyses. They will be published on our web-site shortly and I strongly recommend that you read them. Considering the ongoing major role of the developments in the global economy on our policies, I would like to start with the global economic outlook. Since the publication of the October 2011 Inflation Report, concerns over sovereign debt sustainability across the euro area have continued to weigh on the global economic outlook despite the implementation of various policy measures. Growth forecasts were revised downwards at a global scale particularly in the euro area economies (Chart 1). Thus, perceptions for a further delay in the normalization of monetary policy in advanced economies grew stronger. Notwithstanding a relative improvement in the risk appetite as of the onset of 2012, uncertainties regarding the solution of euro area problems persist. Coupled with the increased risk of contagion, this feeds into the fragility in global financial markets, highlighting the significance of a flexible monetary policy framework. BIS central bankers’ speeches  1  Chart 1.
Responding to a question by Investor.bg, BNB says that given the lev’s fixed exchange rate, delaying the entry into ERM II cannot create direct financial and macroeconomic risks for the Bulgarian economy. Could the opposite happen, however? Is it possible for ERM II membership to be negative for Bulgaria if it comes during unfavourable times for the European economy? To put it in different words, should we be in a hurry for the eurozone or should this goal be consistent with the conditions and trends for the time being? We should follow our strategic plan with a focus on the quality of the process. Due to the nature of our monetary regime, based on a fixed exchange rate, as well as our firm commitment to not change it until country’s eurozone accession, our currency being part of ERM II will not lead to any changes in our macroeconomic position. The direct effects will be rather positive, such as increasing Bulgaria’s credit rating and improving the overall investment environment. Spanish economist Daniel Lacalle told Bloomberg TV Bulgaria in an interview that he believes the ECB’s policy of stimulation has long exhausted its efficiency and the only thing it is currently doing is to transfer funds from productive to non-productive sectors of the economy. Lacalle also recalls that negative interest rates have played a significant role in Japan’s difficulties with inflation and growth. What’s your opinion? Is there a risk for the eurozone to get into the Japanese scenario? The global economic environment is far from being conventional.

However, owing to the strong M3 growth in 2001, there is still a lot of liquidity in the economy. We therefore have to monitor monetary dynamics closely in the coming months. The persistence of excess liquidity in the economy could become a concern once the economic recovery in the euro area gathers pace. Turning to economic developments, the latest information has reinforced our expectation that real GDP growth in the euro area will recover in 2002 and that, later in the year, it should again be back in line with potential growth. The recovery should be supported by both domestic and external factors, in an environment in which financial conditions are favourable and where there are no major imbalances in the euro area. However, at the current juncture, some uncertainty still remains regarding the strength of the recovery. As regards price developments, there is no evidence thus far of a significant upward impact on the overall price level from the euro cash changeover. While some shorter-term effects cannot be ruled out, there is reason to believe that the introduction of the euro banknotes and coins will strengthen competition, thereby supporting the maintenance of price stability over the medium term. This notwithstanding, HICP inflation is currently somewhat higher than was expected a few months ago, owing partly to a significant rise in oil prices.
Thailand is transitioning to a new era of digital payment system and financial technology in which the Bank of Thailand is fully committed to foster. First and foremost, electronic payment infrastructures must be put in place to realize the full potential of digital economy. Under the National e-Payment Masterplan, last year the Bank of Thailand together with the Ministry of Finance and 6/10  the Thai Bankers’ Association launched our new faster payment system – PromptPay – which propelled the wider adoption of e-payment in Thailand. PromptPay is an instant payment platform that links bank accounts to various forms of identification including national ID numbers and mobile phone numbers. With PromptPay, funds can be transferred to a recipient’s preferred bank account in real time and at virtually no cost. This new technology has significantly boosted the usage of mobile banking, and has potential to lead to significant growth in e-commerce in Thailand as well as to radically change the way government welfare payments are distributed. In just over a year since the launch of PromptPay, there are over 40 million IDs registered on the platform and more than 2.7 million transactions a day. The increasing usage of PromptPay also served as a catalyst that eventually led to the announcements of most commercial banks two months ago, to eliminate transfer fees for all transfers through mobile and online banking. All in all, PromptPay provides a crucial payment infrastructure which opens the door to many other digital payment services.

The inflation surge could nevertheless be transient, and then hopefully stabilise in a new regime of “controlled reflation”. The jump in euro area headline inflation in early 2021 did come as a surprise (it rose from -0.3% to +1.3%); Nonetheless, the causes of this increase are temporary in nature, like the recent rebound in oil prices, the reversal of the VAT rate cut in Germany and from modified weights in the HICP basket. Over the medium term, the persistence of substantial economic slack over the projection horizon, despite a significant  Page 5 sur 9 recovery from the second half of this year, will weigh on inflation. All in all, the March 2021 ECB projections show that headline inflation would remain weak, at 1.4% in 2023. Inflation is therefore not yet where we would like it to be, back towards 2% over the medium term. Our inflation objective must be understood as simple, symmetric and medium-term oriented. iii “Simple” means that we could reexamine oversophisticated qualifiers still associated with the 2 % figure. “Symmetric” refers to the fact that our objective is a target and not a ceiling: we might be ready to accept inflation higher than 2% for some time. Finally “medium term” means that we assess inflation performance over a long enough period, looking forward, but also not ignoring the past.
I am also convinced due to the successful cooperation between the two institutions so far, which was proved as very effective in preventing the occurrence and spreading of counterfeit money in the territory of our country, and because of our readiness to continue to tackle the challenges in this segment of our work in future, as well. The commitment of the National Bank to move safely along the way to the European System of Central Banks, constantly following European standards and practices and promoting all segments of its operations, is one of the main strategic goals. That’s why I assure you that with the same level of professionalism and commitment that we approach other challenges, we approach also to the implementation of this Project, giving our maximum contribution in the implementation of the activities that will have to follow after it is finalized. We sincerely hope that soon after the country’s admission to the EU, the integrity of the euro will be protected along with the integrity of the domestic currency. Actually, that is the reason that the Law on the National Bank already incorporates provisions that regulate the tasks and powers of our institution from the date of our country’s accession to the European Union, as well as the tasks and powers that we will have after the introduction of the euro as a national currency. 1/2  BIS central bankers' speeches  Hence, this project and its success are perceived as a long-term key investment in a significant segment of our operations.

I would like to stress just two ideas which may help us understand the exceptional situation we face and justify the urgency of the measures Spain needs. The first is that there is a feedback loop between the vicious circles in which the economy is caught and the contractionary forces at play. And if prompt action is not taken, these may inhibit the operation of the factors that should underpin a turnaround towards recovery. The second is that, once the worst of the crisis is behind us, i.e. when international financial markets regain stability and the world economy begins to pick up, the Spanish economy will not be able to resume growth at rates similar to those in the recent past if substantial structural changes are not addressed. This is because we will no longer be able, as previously, to resort to growing debt to stimulate domestic demand. The fiscal drive to date had been notable. This is evident in the rapid deterioration in public finances in recent months. Accordingly, in order to infuse economic agents with confidence, a strategy should be designed immediately to allow a return to budgetary stability, which was of such benefit to Spain. The current priority, therefore, is to focus on applying forthwith structural measures to promote a growth pattern with a greater emphasis on productivity, in contrast to that followed in the past 15 years. Specifically, among the aspects requiring the adoption of immediate measures are those relating to the workings of the labour market.