samchain/econo-pairs-v1 huggingface dataset:
What did mark the post-crisis period was the financial system reform mainly with respect to the banking industry and reconsideration of central banks mandate with respect to financial stability. Financial turbulence, low yields and divergent monetary policies in the US and the EU caused asset managers to diversify and optimally balance risk and return. The global recovery has strengthened recently, but still there have been concerns with respect to its sustainability. Low productivity keeps clouding the prospects of future economic prosperity and growth, and inflation remains muted in many countries. In addition, there are geopolitical risks, risks of excessive indebtedness and financial sector resilience to potential new shocks. All of these critically relevant issues for the policy makers and asset managers will build in our agenda for today. The program will start with a keynote speech followed by four sessions. Session 1 will cover issues related to the current and prospective conjuncture of the global economy, monetary policy and the future of interest rates. Session 2 will tackle upon financial stability issues, and how well are we equipped to deal with potential turbulence. In Session 3, central bankers and asset managers will put forward their views on strategies for effective risk mitigation and how should asset managers prepare for the “new normal” in the converging monetary policies. Session 4 will focus on South East Europe and the perspectives of the region for European integration and growth. I am particularly delighted that we have prominent speakers and excellent panelists to address the topics of the conference.

Dimitar Bogov: A new normal? The global economic expansion, inflation dynamics, financial stability and its meaning for asset management Speech by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the High Level International Conference on Monetary Policy and Asset Management, Skopje, 16 February 2018. * * * Distinguished guests, Ladies and gentlemen, It is my great honor and pleasure to welcome you to the High-Level International Conference on Monetary Policy and Asset Management. The conference has been organized as a joint effort of the National bank of the Republic of Macedonia and Reinventing Bretton Woods Committee. We are delighted for this partnership whose results have been built into the conference program that is both rich in the topics to be covered and in many prominent speakers to lead the discussions. The title of the conference is “A New Normal? The Global Economic Expansion, Inflation Dynamics, Financial Stability and its Meaning for Asset Management” that comes as a timely event to draw upon the lessons learned of the GFC, to assess the current state of the global economy and its future prospects and advice on the challenges facing central banks and asset managers. This decade has been a truly challenging time for policymaking and asset management. The world has gone through financial, economic and debt crises. We have witnessed major central banks using unconventional policies and ultra-accommodative monetary policy stance.
As we approach the points at which the Libor panels will cease, it is worth pausing to reflect on what the underlying challenges with Libor benchmarks are and making sure that in finding suitable replacements we move to solutions that don’t replicate those weaknesses. Any failure to address these weakness will pose risks in the domestic  Descending safely: Life after Libor ‐ speech by Andrew Bailey | Bank of England  Page 4  markets that use them but will potentially export those risks into other jurisdictions through international markets, for example through offshore markets, multi-currency lending and cross currency derivatives trades. We need to learn the lessons of Libor, and ensure we complete this transition in a way that minimises the risk of us having to undertake a similar exercise in the future. And across markets we have seen progress in building liquidity in those selected risk-free rates and demonstrating a wide use case. The tools are there to support use of these rates through the production of indexes and calculators that we are seeing emerge. The transition from Libor should be done once and it must be done right. As I have already mentioned, there has continued to be low levels of actual transactions in the markets Libor seeks to measure and the rate has had to remain heavily reliant on ‘expert judgement’.

A possible solution to this coordination problem could be to establish a central mechanism entrusted with setting the euro area’s overall fiscal policy stance and responding to tail events, with national authorities focusing on medium-term goals and placing debt sustainability as their primary objective (see slide 7). This fiscal policy tool could be automatic, such as a common unemployment insurance scheme or a more general stabilising instrument dependent on the cyclical position. In any case, risk sharing must be accompanied by an incentive system that prevents negative cross-country externalities and moral hazard, something of utmost importance in a monetary union. Furthermore, I believe that such a central instrument would also be suited to tackling global challenges, such as climate change or the process of digitalisation, and might be a better option than national “golden rules”. These rules exclude specific types of public expenses from deficit calculations, on the grounds that these could be growth-enhancing and thus need to be protected. This option is attracting much attention in current EU debates. In particular, it is argued that in the current context, with countries having to expend a great deal of effort in the fight against climate change, such investments should be excluded from the expenditure target or budget balance in order to safeguard them from EU fiscal rules. However, a golden rule would add an additional layer of complexity to an already intricate system (see 6  slide 7) and would require the definition of the types of spending to which it ought to apply.
So, with the recovery momentum remaining firm but the risks to economic stability rising, the Monetary Policy Committee saw less need for maintaining low interest rates and felt that the monetary policy stance should be adjusted to give priority to economic stability, with the adjustment being gradually paced. This is essentially the rationale behind the decision on Wednesday by the Monetary Policy Committee to raise the policy interest rate by 25 basis points. At this juncture, many of you may wonder whether higher oil prices together with higher domestic interest rates might be too punitive to the health of the domestic economy. Let me say that we have looked carefully at this issue and are of the opinion that the growth momentum at this time is quite firm. Although the adverse effects an growth from higher domestic interest rates will be there, the effects will not be large to the extent that they will derail the ongoing momentum of recovery. This is because the fundamentals of the economy at present are quite good, and with a strong fiscal position, these two factors should allow the economy to flexibly adjust to the negative shocks without interrupting the momentum of growth. On the contrary, the early rise in domestic interest rates will help maintain macroeconomic stability which is cruial for sustaining economic growth in the medium term. Ladies and Gentlemen, A few weeks ago, I had the good fortune of visiting both Melbourne and Sydney and came across this concept of a cleanskin wine.

On the demand side, the  2  BIS Review 50/2004  dampened consumer confidence has moderated the momentum of private consumption in the first half of the year, but private investment and exports have expanded well and have been the key drivers of growth so far this year. On this point, it is comforting to note that domestic demand expansion has benefited increasingly more from the pick-up in credit extension, driven by ample liquidity in the system. Private credit growth was a high 9 percent at end-June. Turning to economic stability, with continued growth, pressure on resources has become more visible this year with output gap continuing to close, inflation rising, the trade surplus narrowing and some tightening in the labour market reported. Overall external stability, on the other hand, remains strong with continued current account surpluses, falling external debt, and higher international reserves. But the higher oil prices and the rebound in investment have evidently put greater pressure on imports and the trade balance. One thing that we have been monitoring more closely this year is financial stability. Some indicators of financial fragilities are rising. These include rising household indebtedness and a very active real estate sector. Although there are no signs of overheating as yet in these two sectors, their developments need to be monitored closely especially with the credit cycle now turning. This is because they have the potential to become a source of financial fragility if their growths are left unchecked.
Krzysztof Rybiński: Inflation targeting and the challenges ahead Opening remarks by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the “Inflation Targeting - Third Joint NBP & SNB Seminar on Monetary Policy”, Warsaw, 18-20 May 2006. *  *  *  Ladies and Gentlemen, I am pleased to welcome you at the third seminar on monetary policy organized jointly by the Swiss National Bank and the National Bank of Poland. Let me start by thanking staff members from the host central banks, who have not spared their efforts on preparing this seminar. For the first time in our seminar, apart from economists from the host central banks we have invited representatives of other central banks to share with us their knowledge and experience with inflation targeting. Thus I would like to warmly welcome our guests from the Czech National Bank – the first inflation targeter in Central and Eastern Europe, and from the Central Bank of Turkey – a brand new inflation targeter, which has adopted the framework only this year. The topic of this year’s seminar is inflation targeting (henceforth called IT). As the distinguished former Fed chairman Paul Volcker recently remarked 1 , inflation targeting may sound like an oxymoron since usually central banks strive to fight inflation rather than to breed it. So should we gather here to discuss ways of breeding inflation?

11  “Norges Bank operates a flexible inflation targeting regime and seeks to achieve an interest rate path that provides a reasonable balance between the objective of bringing inflation up towards 2.5% over time and stabilising developments in output and employment.” - Norgesbank, Inflation Report, March 2006. 12  According to the Federal Reserve Act, the Board of Governors and the Federal Open Market Committee should seek “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”  13  Cukierman A. “Central Bank Independence and Policy Results: Theory and Evidence”, Lecture prepared for the International Conference on: “Stability and Economic Growth: The Role of the Central Bank”, Mexico City, 14-15 November 2005. 2  BIS Review 42/2006  way central banks should respond to asset prices. Fed Chairman Bernanke claims that central bankers should respond to asset prices only insofar as they affect output gap and thus inflation 14 . Another FOMC 15 member Donald Kohn has described this approach as “conventional strategy” and proposed, what he called, an “extraaction” policy 16 . Monetary “extra action” – according to Kohn would be required if there were clear signals of an asset bubble building up – especially a one fuelled by excessively loose monetary policy – and if costs of “extra action” policy were smaller than the costs of further build-up and subsequent collapse of a bubble.
But an environment in which borrowing is free and the real interest rate is considerably lower than trend growth in the economy is unlikely to be sustainable over time. Chart: Estimates of the neutral interest rate The neutral interest rate cannot be observed and must be estimated. In the Bank’s Monetary Policy Report, the current neutral real interest rate in Norway is assumed to be around zero. The estimate is based on calculations from a range of different models. As we can see in the chart, these calculations show that the neutral interest rate has fallen to a historically low level close to zero over the past 20 years. With an inflation target of 2 percent, this means that setting the policy rate at zero would enable us to bring the real interest rate down to 2 percentage points below its equilibrium level.1 2 In Norges Bank’s assessment, monetary policy has sufficient room for manoeuvre with an inflation target of 2 percent. First, international experience has shown that the room for manoeuvre in monetary policy is not exhausted when the policy rate is close to zero. I will come back to this. Second, our calculations show that over the past 20 years, the real interest rate has normally remained less than 2 percentage points away from its estimated equilibrium level.3 This may suggest that a real interest rate that is 2 percentage points below equilibrium has in most cases provided sufficient economic stimulus.

These developments will push up inflation and imply that the policy rate must be set higher than we envisaged earlier for inflation to return to target. Price stability is essential for a well-functioning economy. High inflation is weakening household purchasing power, and lower-income households with the smallest margins are being hit hardest. Borrowers are facing higher interest rates on top of high inflation, and many will be coping with tighter budgets. But by raising the policy rate, we are helping to bring down inflation, which is in everyone's interest. Chart 3 Turbulence in international banking markets In recent weeks, problems at certain US and Swiss banks have led to large movements in global financial markets. Equity markets have fallen, and risk premiums in money and bond markets have increased a little. Expectations for both Norwegian and international policy rates have declined markedly. 1/3  BIS - Central bankers' speeches  We are not seeing any signs of liquidity problems for Norwegian banks. Norwegian banks are profitable, well capitalised and well positioned to cope with losses and market stress. Households and firms appear to have ample access to credit. We are closely monitoring developments and we are always prepared to take the measures required to safeguard financial stability if needed. Let me say a little more about the economic outlook and our assessments. Chart 4 Persistently high Inflation among trading partners Inflation is also high among our trading partners, although it has recently moderated a bit. Labour markets are tight.
Encik Adnan Zaylani Mohamad Zahid: Islamic finance - future trend Keynote address by Mr Encik Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 13th Kuala Lumpur Islamic Finance Forum 2016 (KLIFF) "Islamic Finance - Future Trend", Kuala Lumpur, 21 November 2016. * * * It is my pleasure; and an honour to be given the opportunity to speak at this forum today. Since the first introduction of KLIFF, more than a decade ago the event has gained recognition as a prestigious annual gathering for industry experts and key players in Islamic finance. I therefore wish to congratulate the organisers for its success in organising this event and maintaining its momentum. This year, in line with the chosen theme deliberations in the forum will revolve around strategies to elevate Islamic finance to the next level. As we are now at an important crossroads in Islamic finance, its continued dynamism in the journey ahead, requires the industry to strategically respond to the changing requirements of the global economy. My remarks today centres on the future trend of Islamic finance. In charting our growth for the industry, I will reflect on our achievements; and offer some thoughts on key areas that can accelerate the industry forward. I would then deliberate on the key underpinnings for the industry to successfully meet the intended objectives, in my conclusion.

Progress is also evident in our agenda towards becoming the centre for Islamic fund and wealth management. We emerged as the largest hub, with 35% market share and the most number of Islamic funds. The Malaysian Islamic capital market has also gained its pace as a reputable destination for investment, given its wide range of world class financial products. Backed by a robust Shariah screening methodology, more than 70% of total listed securities in the country are Shariah-compliant, thus providing a wide array of selection for investors. Islamic finance has also become part of the growth strategies of global financial players, indicating greater appreciation of its value propositions. A host of global banking players offering Islamic banking services from diversified regions including from Japan; Europe; and the Middle East have also established their presence in Malaysia. A number of our industry players that offer Islamic finance have also ventured abroad to various jurisdictions. Our MIFC Community, with nearly 40 professional ancillary service entities not only provide key services locally, but many serve global demand and have set benchmarks for 1/4  BIS central bankers' speeches  international best practices. These industry developments which I have highlighted have indeed enhanced the depth and breadth of the Islamic financial services industry. Nevertheless, against the onslaught of global challenges that have intensified uncertainties and complexities, there is heightened urgency for the industry to strategically chart its next phase and reinforce its core strengths.
However, there remain two causes for concern: -  one is the natural difficulty in moving to an entirely new set of price references – and it may take a number of years before this switch is fully made by the public at large. -  and the second, probably related to the first one, is the feeling in the public that there have been excessive price increases linked to the cash changeover. Indeed, the public’s attention has focused on a small number of goods and services in which abnormal increases occurred at the time of this event, leading to a misperception of the real rate of inflation. This gap between perceived inflation and real inflation has however been narrowing progressively and should hopefully disappear in the near future. Concluding remarks To conclude, let me emphasise that eight years after its adoption, the euro has lived up to all of our expectations. After the unprecedented challenge of a continent-wide cash changeover, the euro almost instantly replaced the legacy currencies without any disruptions. It has fostered both price and macroeconomic stability through its credibility and has shielded many euro area countries from significant exchange rate volatility and financial market  1  On average, central banks of industrialised countries changed their policy rates every 5 months both in the 1980s and the 1990s (Source Clerc et Yates (1999): “Interest rate stepping: some puzzles and facts”, mimeo Bank of England), which is close to the frequency of the ECB interest rate changes (4.7 months).

Is the central bank forward-looking or rather “behind the curve”? These are actually some of the recurrent criticisms I have heard about the Eurosystem’s monetary policy: too obscure, too narrow-focused, too late. One can build up (see Figure page 7 of the Annex) a forward-looking Taylor-type rule for the ECB’s minimum bid rate. As an overall assessment, the Taylor-type rule closely matches Eurosystem’s monetary policy decisions. Under the proviso that this rule provides a good benchmark, it is quite unclear why the Eurosystem has attracted so much criticism: in particular, the output stabilisation “objective”, as encapsulated in a standard Taylor rule, has not been overlooked by the overriding objective of price stability. In that regard, one should be aware that, in the euro area as elsewhere, price stability aims at providing the highest sustainable growth and employment in the longer run; finally, the decisions have been taken in a timely fashion, the Eurosystem conducting its monetary policy in a forward-looking and pre-emptive way. However, the same figure shows that policy decisions deviate from the Taylor rule benchmark. Actually, being rule-based doesn’t imply being rule-bound and monetary policy decisions are not taken on the basis of mechanical rules. I already mentioned the Eurosystem adopted a full-information approach, which besides the usual array of economic and financial indicators also gives a key role to monetary analysis not factored in usual Taylor rules. Identifying in real time the nature of monetary developments and their implication for future price developments represents however increasing challenges.
Unemployment would be materially higher and nominal wage growth materially lower. Ultimately, this reflects what is known as the “neutrality” of monetary policy: in the long run it has no impact on real economic variables (things like real output or relative prices). It can’t boost structural productivity, for example. Nor can it offset the consequences for real incomes of (say) disruptions to supply chains in Asia or Russia’s curtailment of the supply of gas to Europe. Indeed, in the first instance, at least for a period of time, tighter monetary policy lowers GDP and real incomes. I will say more about this shortly. For the time being, a better short-hand description is this: the pandemic and the war have led jointly to higher inflation and lower real incomes; the MPC will ensure the inflationary effects do not persist into the medium term; but the real-income hit exists either way, and will be reversed only to the extent the underlying shocks themselves go away. The second point I want to make is that we are inevitably having to learn, to some degree, about the scale of these “second-round” effects. The MPC has raised interest rates faster than at any time in its history but obviously more gradually than inflation itself. In the main, this is because the direct effects of the jumps in traded goods and energy prices, as violent  Bank of England  Page 6  as they are, are likely to fade before policy could really do much about them.

Despite a decline in recent days, that expected peak is now around 5¼%. This is by some distance the largest rise in market interest rates between MPC forecasts since the Committee was founded. By way of comparison, Chart 10 plots this increase in market interest rates against one particular, simple representation of how interest rates might have had to respond to a couple of key developments since August: the decline in sterling’s exchange rate and the original, two-year version of the Energy Price Cap. Both would tend to raise medium-term inflation, for any given level of interest rates, and would therefore tend to merit an additional response from policy (all else equal). This is expressed in Chart 10 as the change in something called an “Optimal Policy Projection”, or “OPP”. From time to time, the Committee is shown these OPPs to inform its policy judgement. The Annex provides more background on the OPPs. Bank of England  Page 18  Chart 10: Market interest rates have risen dramatically since the August MPR Percentage points 2.5  2.5 Yield curve news  2.0 1.5 1.0  “Optimal” response to demand effects of energy package and sterling depreciation  0.5 0.0 Dec 2022  2.0 1.5 1.0 0.5  Dec 2023  Dec 2024  0.0 Dec 2025  Chart shows the marginal impact on the OPPs of the original Energy Price guarantee, assuming that energy prices remain flat at a level consistent with the guarantee once it has expired.