samchain/econo-pairs-v1 huggingface dataset:
You were driving, and one of your friends asked you, “When will we make a turn?” If you have a GPS navigator or open up Google Maps, you might be able to say with precision, “In 2.5 kilometers.” When talking about a policy course, the answer might be, “In the next two or three quarters, if things go according to plan.” In real life, we policymakers do not have the luxury of having a GPS navigator, not to mention the fact that this said turn could be moved closer or further away without giving any warnings in this volatile world. What we do have, however, are indicators we observe from our surroundings, and indicators of road conditions and possible storms ahead of us. Similarly, the MPC considers a number of factors when formulating a policy decision—not only the current state of such factors, but also their longer-run trends and expectations of risk scenarios going forward. For a small open economy in an increasingly volatile world, MPC’s decisions will have to be data dependent. In my address to you this morning, I will share with you the factors that the MPC considers when making policy decisions. Since the main objective of a flexible inflation targeting framework is to attain sustainable economic growth while preserving price and financial stability, I am going to take inflation, growth, and financial stability each in turn. 1/5  Ladies and gentlemen, The first factor that the MPC takes into consideration is inflation.

The prolonged period of global low interest rate environment leads to another potential concern: search-for-yield that leads to underpricing of risks. It should be noted that search-for-yield is not uncommon and is all well and good if investors are wellinformed and manage their risks accordingly. However, we cannot deny that some investors are underpricing the associated risks. Debt accumulation among households;  3/5  large expansion of foreign investment funds with high concentration in some emerging economies; saving cooperatives’ growing asset base; maturity mismatch of corporate borrowers; and rapid growth of unrated bonds are some examples of the issues the Bank of Thailand has been monitoring over the years. More recently, we also notice an upward trend in mortgage loans to homebuyers who search for rental yield, driven partly by high LTV ratio for mortgage loans offered by fierce competition in the financial sector. Furthermore, mortgage NPLs, especially among second and third home buyers, have continued to rise. On the regulatory side, the Bank of Thailand continues to monitor warning signs of financial stability risks and address them accordingly. For example, last year, we tightened credit card regulations as well as uncollateralized personal loan limits to mitigate household debt problems. It is also our view that collaborations between various regulatory bodies and market participants are increasingly important for effective risk monitoring and assessment, together with appropriate measures to manage risks that might arise in the future.
The acceleration in exports growth has, to some extent, contributed to higher job creation and increase in wages. This shows that it is important that we have a diversified economy that helps to mitigate external shocks. 19. It is also important that we preserve orderly financial market conditions. This means avoiding large swings in the exchange rate, so as not to disrupt economic activities. This will enable the exchange rate to serve as a shock absorber – not a shock amplifier – to the domestic economy. While Bank Negara does not target any level of exchange rate, we will closely monitor and ensure orderly market conditions. On this, I should highlight that even with heightened volatility in global financial markets, daily onshore FX transaction volume and bond market activity remain healthy. Reforms to deepen the domestic bond market have helped to strengthen the fundamentals of the economy by enabling businesses to meet their funding needs more effectively. 20. While the current depreciation of the ringgit is due to the strength of the US dollar, corporate Malaysia can help in maintaining orderly market conditions by taking actions which do not exacerbate the situation. BNM will ensure that our onshore foreign exchange market remains liquid, so businesses can be assured that all their foreign currency needs can be efficiently fulfilled. So there is no need to hoard or frontload US dollar purchases. Corporates and domestic financial institutions should also be prudent in managing their balance sheets.

For us to elevate our fundamentals as an innovation economy, we need to press on with reforms to strengthen the foundations of ideas, quality investments, talent, and market dynamism to ensure efficient allocation of resources. 28. As we face new and emerging challenges, we must embrace new opportunities that are available. One such opportunity is the move to a low carbon and greener economy. Besides producing green products such as solar panels, our own rich biodiversity plays a critical role in the global shift towards sustainability. The key however is not to monetise our natural assets quickly, either as commodities or as green-assets or credits to other countries. Instead, we must look to develop and cultivate our own green industries and services so that we can secure Malaysia’s economic future in the long run. A strong financial sector Ladies and gentlemen,  29. Speaking of reforms to secure our future, it is also fitting for me to talk about the financial sector, and its role in supporting the economic aspirations that I have just highlighted. Indeed, this was at the top of our minds when we developed the Financial Sector Blueprint, which we published in January this year. 30. The Blueprint set out five key priorities for the financial sector. Briefly, they are: a. First, to foster a vibrant funding ecosystem that supports Malaysia’s economic transformation. b. Second, to elevate the financial well-being of households and businesses. c. Third, to advance digitalisation of the financial sector while managing associated risks.
The reason is that it has proved difficult in practice to lower nominal wages. If inflation is low and nominal wages cannot be lowered, then it becomes difficult to adjust real wages between different professions, companies and sectors. This can ultimately lead to both higher unemployment and poorer productivity growth in the economy. A moderate level of inflation mitigates these problems. It functions as grease in the wheels of the economic machinery. Another advantage with an inflation target of 2 per cent, which has come to the fore in recent years, is that it creates at least some scope for lowering the policy rate before it reaches its lower bound. If the inflation target, and hence average  4 [17]  inflation, were to be lower, then the nominal rate would also on average be lower. This would be particularly problematic in a world where real interest rates are very low, as is currently the case. The scope for lowering the rate before it reaches its lower bound would then be more limited than it is today, which would make it more difficult to counteract future recessions. Therefore, if one does not like negative interest rates, one should not advocate a lower inflation target, as that would imply that the policy rate would have to be negative for longer periods. In the international debate, moreover, there are several economists who think that not even an inflation target of 2 per cent provides sufficient scope to conduct as expansive a monetary policy as is sometimes necessary.

But if there is a perception starting to spread that the inflation target is irrelevant and should be scrapped, we have, given our mandate, an obligation to bring this up to discussion and point out that we consider it to be a problem. When it comes  10 See, for instance, Calmfors (2018) and Calmfors et al. (2019). It should be pointed out that there are studies indicating a certain amount of wage flexibility with regard to changes in unemployment at a regional level, see Carlsson et al. (2019). 11 [17]  down to it, Sweden is not the only country with an inflation target of 2 per cent and an industrial sector exposed to international competition. Important to have perspectives on the krona development Let me now go over to the other area I wish to delve deeper into; the exchange rate and development of the krona. When Sweden introduced an inflation target in 1993, we chose an exchange-rate regime at the same time. As I just pointed out, a fixed exchange rate and an inflation target with a floating exchange rate are two different ways of trying to provide the economy with a nominal anchor, that is, a benchmark for price-setting and wage formation. An inflation target tries to steer expectations in the economy directly, while a fixed exchange rate tries to steer them indirectly, by virtue of it becoming more costly if price increases and wage growth are higher than abroad.
It also, as I have noted, amplifies market corrections as leveraged investors are forced to sell when credit dries up. I do not start from the view that leverage poses the same scale or nature of risks in the market-based finance world as it does in banking. But nor am I confident at present that it is without systemic risk. We do not have the tools to make that assessment yet. We need a better set of lenses through which to view leverage in this world in order to assess the risks that it might pose to the system as a whole – hence the work now underway in IOSCO and elsewhere. The use of financial leverage i.e. borrowing to gear up exposure to risk looks to be materially lower in market-based finance than in the banking world. 14  Bank of England (2014) Baranova et. al. (2017) 16 Recommendations for Liquidity Risk Management for Collective Investment Schemes, February 2018 17 As reported in Bank of England Financial Stability Report, November 2017. The in-depth assessment will seek to develop the FPC’s understanding of how non-banks use leverage, and what financial stability benefits and risks arise from leverage. It will examine measures of leverage and its distribution throughout the non-bank financial system. 15  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Retail investment funds in most jurisdictions are heavily constrained by regulation on the amount of borrowing they can do. In the UK, insurance companies are limited users of financial leverage.

12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Chart 1: Growth of market-based finance  Chart 2: Growth in open-ended fund assets worldwide and flows  USD trillion 200 180  Total net assets Flow Residual (valuation)  $ trillions 22 20 18 16 14 12 10 8 6 4 2 0  160 140 120 100 80  60 40 20  Equity  Bond  2008 2009 2010 2011 2012 2013 2014 2015 US  Euro-Area  China  UK  1.00 Q4 2008  Others  Q2 17  Q4 2008  9.00  Q2 17  Source: FSB Global Shadow Banking Monitoring Report 2016 dataset Notes: Data are for 21 participating jurisdictions and the Euro Area, Data include insurance corporations, pension funds, other financial intermediaries and financial auxiliaries. Source: Bank of England Financial Stability Report, Nov-17 Notes: Adjusted for a break in the series due to expanded coverage in 2014 Q4 on best-endeavours basis. Including money market funds but excluding funds of funds where possible. In 2008 Q4, bond and equity funds accounted for half of all openended funds; in 2017 Q2 it was two thirds. Chart 3: Impact of a 10 basis point increase in yields on sell volume  Chart 4: Gross capital inflows to advanced economies by instrument  % change in sell volume  Procyclical  Rest of sample Taper tantrum  Countercyclical Dealer banks  Non-dealer Insurance banks and Companies sec.
Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the FOMC or others in the Federal Reserve System. Our Dual Mandate Goals While our monetary policy approach has shifted, our fundamental goals have not. The Fed has two goals set by Congress: maximum employment and price stability. These “dual mandate” goals remain on an equal footing, and our commitment to delivering on both has not changed. In addition, our assessment that a 2 percent long-run inflation rate is most consistent with achieving both of our dual mandate goals is unaltered. What has evolved is how we think about best achieving them. Like all institutions, the Federal Reserve must be responsive to changing circumstances and adapt to new realities. Since 2012, we have learned a great deal about the behavior of the economy, employment, and inflation— both in the short and longer run—and these lessons have informed our approach to policy. There are three key takeaways worth highlighting: First and foremost is the secular decline in the neutral rate of interest, or r-star, which has brought neutral real interest rates to near zero in the United States. This decline in r-star in turn implies that the constraint on monetary policy from the lower bound on nominal interest rates has become a central aspect of the landscape with which policymakers must contend.

But the figures collected by the HKMA for the local banks’ Hong Kong offices show that, in aggregate, their pre-tax operating profits rose by about 15% in 1999. This compares with the decline of 33% that we saw in 1998. This improvement has been supported by renewed growth in net interest income. Moreover, the aggregate bad debt charge of the local banks showed little change in 1999, having increased by 335% in the previous year. It is true that some banks were obliged to increase their provisions against Mainland related companies during the course of the year. But the general trend in the latter part of 1999 was that the growth in new problem loans began to slow down as the economy improved. This is supported by the figures for problem loans in the final quarter of 1999 which we published recently. These show that the ratio of loans classified as “substandard”, “doubtful” or “loss” to total loans fell to 9.8% at the end of December, compared with the 1999 peak of 10.3% at the end of September. At the risk of tempting fate it does seem that the worst of the bad debt problems for Hong Kong banks is over. Certainly all the local banks are expecting a significant reduction in the bad debt charge in 2000, which will give a boost to profitability. Can we say therefore that life for the local banks is getting back to where it was prior to the crisis? The answer unfortunately has to be “no”.
Remarks at the Accounting for Sustainability Summit 2018  Remarks given by Mark Carney, Governor of the Bank of England  Accounting for Sustainability Forum, St. James’s Palace London 21 November 2018  I am grateful to Alice Carr, Emma Dalhuijsen, Edd Denbee, Vishal Desai, Sini Matikainen and Jennifer Nemeth for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  I would like to thank His Royal Highness the Prince of Wales and Accounting for Sustainability for inviting me today. It is an honour to be able to mark his 70th birthday in this way. We are gathered at St James’ Palace, but not for a lavish celebration. It is to HRH’s credit that this happy occasion is marked by a serious discussion of the risks and opportunities posed by climate change and the transition to a low carbon economy. His Royal Highness has provided inspirational leadership on these critical issues for decades. Indeed if we had heeded his advice when it was first offered, we might have already solved the Tragedy of the Horizon!

The quarterly assessment in mid-March 2008 will provide the opportunity to assess the inflation and economic outlook on the basis of new data. BIS Review 13/2008  1
They will want to be able to offer their customers deposits and foreign exchange facilities in the euro, lending and borrowing in the euro, hedging and collateral in the euro and financing and settlement facilities. The London markets will need to be able to operate in euro from the outset across the full range of their wholesale activities, and practical preparations are now well advanced to achieve that by January 1999. 14. The Bank of England’s part in this extensive process of market-wide preparation, besides equipping ourselves internally for operations in the euro, is a co-ordinating one, in three main ways:  •  first, our job is to ensure that the necessary infrastructure is developed in the UK to allow anyone who wishes to do so to use the euro in wholesale payments and across the financial markets from the first day of EMU. •  second, we aim to promote discussion between the EMI, national central banks and market participants across Europe about practical issues on which the market is seeking a degree of coordination. •  and third, we provide information: for example, through a quarterly publication on Practical Issues Arising from the Introduction of the Euro, which is distributed to around 32,000 recipients, including 4,000 directly overseas. The next edition will appear shortly, neatly timed for people’s Christmas reading, and I confidently expect it to be on the best sellers’ list for the festive season.

But I do not expect to see too many destitute foreign exchange traders miserably wandering the streets in search of charity or menial employment because of course, as trading amongst the EMU currencies disappears, new international trading is developing in a range of currencies of leading emerging market economies. But more importantly, the advent of the euro will usher in potentially much deeper markets than exist in the individual national centres at present in a range of different money market instruments -- short-dated government and/or central bank paper, commercial bills, CDs, inter-bank deposits, commercial paper, repos, interest-rate futures, swaps, FRAs, options and a miscellany of tailor-made variants on these basic products. Markets in these products are of very varying depth and liquidity, where they exist at all, in the individual local-currency markets of the countries likely to participate in EMU. But all of these instruments are, as it happens, traded in London in the main international currencies; and with the advent of the euro, all of them will also, for the first time, be traded in the major European currency. This represents a tremendous business opportunity for banks and financial institutions with the capacity to trade these instruments and to harness them to the needs of their customers. 34. But there is a third impact on financial markets from the euro that is essentially a necessary prerequisite that must be fulfilled if the benefits from integration of the bond and money markets that I have identified are to be achieved.
Moreover, those countries most at risk from capital flight are not necessarily those with the highest reserves. Scaling countries’ reserves by measures of their external short-term indebtedness suggests a highly-uneven pattern (Chart 16), with a number of countries holding less than would be needed to meet a year’s worth of capital outflows. Third, this pattern is broadly mirrored when moving from measures of self-insurance, such as reserves, to official financing measures. Chart 17 scales IMF resources by external assets. Since the 1980s, this measure has roughly halved from 3% to 1.5%. And fourth, even once we augment multilateral financing with measures of regional official financing, total official resources relative to external assets are still shy of their levels in 1980. Taken in combination, this paints a picture of an international monetary system whose underlying topology has fundamentally changed shape and scale – much larger, much more connected. But it is also a system whose architecture may have failed to keep pace with those changes. Therein lies a key potential fault-line. Strengthening the system This naturally begs the question – what might be done to close this fault-line, to improve the resilience of the international monetary system? One response would be to retreat from financial globalisation by re-imposing barriers to capital movement, unravelling the tightlywoven knitting of the global financial web. We have seen this movie before. It opened in the aftermath of the Great Depression and ended in disaster.

They make that expectation by considering the past trends and what is happening right now. If they expect that the prices on average would rise, then, they can be said to be harboring high inflation expectations. A central bank can gauge this situation by conducting periodical inflation expectation surveys. Second, a consumer price index, compiled to measure the changes in the cost of living of a given group of people, may show a continuous increase over a substantial period of time. It indicates an unstable situation in the macro economy leading to an upward movement in the general price level. The presence of either situation requires a central bank to go into action against fighting inflation. This means that, even if the consumer price index shows stability or a relatively low growth, the central bank cannot stop taking inflation fighting measures. What a central bank should do is to eradicate the cause rather than pampering with the symptoms. It is similar to a physician who does not take delight when he observes that the high fever of a patient has subsided. The physician would not stop his curative treatment, until the cause of that high fever is totally eliminated. There appears to be a general tendency for equating increases in the cost of living with inflation. An increase in the cost of living occurs when the basket of commodities consumed by a given group of people entails a higher cost. As mentioned earlier, this is measured by compiling a consumer price index.