samchain/econo-pairs-v1 huggingface dataset:
Second, there remains significant excess capacity in manufacturing across much of the world. In the 2/6  BIS central bankers' speeches  United States, for example, the manufacturing capacity utilization rate was only 76.4 percent in November, about 2 percentage points below its average since 1972. Third, for manufactured goods, there may be more scope for substituting capital for labor, and/or lowering labor costs by importing labor-intensive intermediate goods. To the extent that this margin of adjustment is available, it would tend to dampen the impact of higher wage costs on prices of manufactured goods. Finally, the so-called “Amazon” effect, which results in greater price transparency for buyers, may weigh disproportionately on goods prices. Although inflation remains somewhat below the FOMC’s 2 percent objective on a year-over-year basis, I still anticipate that it will stabilize around that level over the medium term. As I noted earlier, above-trend growth should tighten the labor market further, pushing up wage inflation and eventually services prices. In fact, we have already seen some increase in inflation in recent months. Over the three months ending with November, core personal consumption expenditure prices rose at a 1.8 percent annual rate, up from a corresponding rate of just 0.4 percent last May. The pronounced slowing of core inflation during the first half of 2017 was due, in part, to transitory factors, such as a sharp fall in prices for cellular phone services. Those influences have been temporarily depressing the year-over-year figures.

For one, I do not think the economic expansion—now in its ninth year—is vulnerable just because it is “old.” As 3/6  BIS central bankers' speeches  we like to say, expansions don’t die of old age—they die either because monetary policy needs to be tightened appreciably to combat rising inflation, or because the economy gets hit with a large shock that overwhelms the ability of the Federal Reserve and other policymakers to stabilize it successfully. In general, with inflation below the FOMC’s long-run objective we can be cautious in how we adjust monetary policy. Similarly, I am not concerned about the recent flattening of the Treasury yield curve even though some commentators believe that such a flattening foreshadows a recession. At the end of 2017, the spread between the 10-year Treasury bond and 2-year Treasury note had narrowed to 52 basis points, from 125 basis points at the start of the year. As I see it, some flattening in the yield curve should be expected as we gradually remove monetary policy accommodation. If the yield curve were not flattening, it would suggest that we were behind the curve in removing accommodation. Moreover, this recent flattening is not particularly pronounced. For example, the 10-year/2-year spread of 52 basis points is only 46 basis points narrower than the average since 1978. In addition, all else equal, we should expect the yield curve to be flatter than normal in the current environment.
3.4  Monetary and financial statistics  The Bank of Albania plays a key role in the national statistical system, as an institution responsible for the production and dissemination of monetary statistics and external sector statistics. In 2009, the Bank of Albania continued to develop and disseminate monetary statistics and external sector statistics, aiming at:   the further approximation of the methodology with the recommendations and best international practices,    enhancing the quality of data through the improvement and automation of control processes, and    increasing the number of released indicators and detailing of aggregate indicators. 3.5  Strengthening of research capacities  Based on the tradition of the best international models, the Bank of Albania has been ever-increasingly paying special attention to enhancing the research capacities in the field of economy and finance. Our guiding philosophy has been the improvement of the Bank of Albania decision-making, basing it on scientific conclusions and empirical results. The study of different economic phenomena is now based on complete or partial econometric models that allow the drawing of conclusions and reliable forecasts. Our future challenge will be the further refining of these models and their growing use in the Bank of Albania decision-making. 4. Bank of Albania’s financial statements  The financial statements of 2009 were audited by an Independent Auditor and they give a true and fair view of the Bank of Albania’s financial position for 2009. Bank of Albania’s financial position has improved further.

The expansionary fiscal policy provided the economic activity with the necessary impulse over the course of the year; however it was also accompanied by higher public debt and upward pressures on Government T-bill yields. The deepening of budget deficit resulted in substantial public debt increase, which as at year-end 2009 accounted for about 59.5 percent of GDP. The Bank of Albania encourages measures to reduce the budget deficit and public debt in the medium run. Lower budget deficit and public debt levels will provide more room in accessing of funds from the private sector and boost confidence in Albania’s macroeconomic stability. In addition, these measures will help to create appropriate conditions for attracting foreign capital in the form of private loans or foreign direct investment. BIS Review 78/2010  3  1.3  Monetary developments and financial markets  Financial intermediation in economy was conditioned by the contraction of financial resources, wavering of confidence in financial institutions and the decline of demand for banking loans in 2009. At the end of March, deposits fell to 55 percent of GDP compared to 63 percent in September 2008. The withdrawal of deposits during the first quarter of the year brought about the slowdown of money growth in economy. Banking activity recovered slowly during the following three quarters. Money supply grew by an average of 6 percent this year or about twice less than the previous year.
To lay the ground for our discussion, I would like to explain our view of the current situation and the rationale for our recent monetary policy decisions. I will focus in particular on the Outright Monetary Transactions (OMTs) that we formally announced in September. Financial markets and the disruptions of monetary policy transmission Let me begin with the challenges facing the euro area. We expect the economy to remain weak in the near term, also reflecting the adjustment that many countries are undergoing in order to lay the foundations for sustainable future prosperity. For next year, we expect a very gradual recovery. Euro area unemployment remains deplorably high. In this environment, the ECB has responded by lowering its key interest rates. In normal times, such reductions would be passed on relatively evenly to firms and households across the euro area. But this is not what we have seen. In some countries, the reductions were fully passed on. In others, the rates charged on bank loans to the real economy declined only a little, if at all. And in a few countries, some lending rates have actually risen. Why did this divergence happen? Let me explain this in detail because it is so important for understanding our policies. A fundamental concept in central banking is what is known as “monetary policy transmission”. This is the way that changes in a central bank’s main interest rate are passed via the financial system to the real economy.

3/3  BIS central bankers' speeches
Mr Duisenberg explains the thinking of the European Central Bank on the issue of whether markets need guidance  Introductory statement delivered by Dr Willem F Duisenberg, President of the European Central Bank, at the Frankfurt European Banking Congress Session I: “Do markets need guidance?” held in Frankfurt on 19 November 1999. *  *  *  Thank you very much for giving me the opportunity to explain the thinking of the European Central Bank (ECB) on this important issue. Let me start by summarising my answer to your question: yes, the markets need guidance from the ECB. This guidance should mainly focus on reducing uncertainty in the markets. This requires above all a clear and credible commitment on the part of the ECB and sound economic analysis. Thus, guidance should be given through a credible monetary policy strategy and a transparent ongoing assessment of euro area developments in line with this strategy. Reducing uncertainty also implies that in our communication we do not pretend that we know more than we really do. Obviously, our knowledge of the future course of the euro area economy will always be subject to uncertainties and limitations. It thus goes without saying that guidance certainly cannot be given in such a way that the ECB indicates a path for future ECB interest rates far in advance. This leads me directly to the second part of your question. (“Is any particular mode of guidance preferable?”) How should the ECB give guidance to the markets?

At the heart of the answer to this question is the Eurosystem’s monetary policy strategy. Indeed, this strategy is designed to make both our objective and the monetary policy aimed at achieving this objective credible, transparent and comprehensible, and thus make our decisions predictable. However, let me be very clear. Being predictable in no way implies that the central bank intends to follow the market. On the contrary, the causality should run in the other direction. Markets should be in a position to anticipate monetary policy decisions based on a credible strategy of the central bank. This does not exclude that certain monetary policy decisions may sometimes surprise the markets, but this is not our aim. As was argued in an article in the most recent issue of the ECB Monthly Bulletin, a stability-oriented monetary policy contributes to reducing certain risk premia in interest rates and thereby to increasing the efficiency of the allocation of capital, thus enhancing overall welfare. This shows that it is very important to give clear guidance to the markets by conducting a credible monetary policy focused on price stability. As you know, the strategy selected by the Governing Council of the ECB comprises a quantitative definition of price stability, which should contribute to anchoring long-term inflation expectations, as well as the two so-called pillars. The quantification of the primary objective, combined with the transparency and the credibility of the Eurosystem, provides the most important guidance to financial markets. Our monetary policy should contribute to keeping inflation expectations safely below 2%.
Rising asset prices and increased household wealth are also contributing to the growth of private consumption. Moreover, the strong economic activity and good stock market trend should contribute to a favourable development of investment. Diagram 2. GDP growth between 1994 and 2002  2. GDP growth 1994 - 2002  5 4  Average 1994-2002  3 2 1 0 1994  1995  1995  1997  1998  1999  2000p 2001p 2002p  Sources: Statistics Sweden and the Riksbank’s forecast for 2000-2002  The Riksbank foresees GDP growth rates of 4.0% this year, 3.5% in 2001 and 2.6% in 2002. These are high rates compared with the 1970s and 1980s. By itself, the upward revision of GDP growth implies that unutilised resources in the economy are brought into production more quickly. The strong economic activity points to a higher rate of wage increases in the coming years. At the same time, it is possible that changes in the labour market will hold wage increases down. A growing proportion of wage increases is being allocated locally, for example. Moreover, inflation expectations among labour market organisations are still in line with the target. This means that, as we have seen in recent years, a real wage increase can be secured without such a large increase in nominal wages. BIS Review 28/2000  4  Historically high real wage increases in recent years should likewise contribute to a moderate development of wages.

Indeed, the pandemic’s immediate economic impact was unprecedented and the pandemic caused the steepest drop in output in Europe’s post-war history. 1/3  BIS central bankers' speeches  With respect to the National Bank of Romania’s responsibilities, since the outbreak of the COVID-19 pandemic in March 2020, we have taken a series of measures proportionally with the evolving situation. When the pandemic broke out, the NBR initiated a program containing measures aimed at supporting the economy: It lowered the policy rate, but stopped at 1.25% Kept liquidity in the system at moderate levels, but avoiding to flood money market with excessive cash and looking carefully to a relative stability of the exchange rate Acquired a moderate volume of government bonds on the secondary market to stabilize the yields. Once inflation re-emerged, the NBR started a normalization process, with an adequate sequence (spring 2021): Stopped the purchase of government bonds Tightened liquidity control Since autumn − increased policy rate and extended the interest rate corridor On the macroprudential front, we have implemented similar measures adopted at the European level in order to ensure banks preserve their ability to finance the economy in a sustainable manner. The Romanian banking system entered the COVID-19 crisis with significantly improved financial soundness indicators compared to the 2008 financial crisis. The banking sector remains well capitalized, with liquidity ratios well above prudential requirements, and with adequate resources to fight back if NPL ratios will restart growing, as expected all around the world.
However, despite this method of stating assets in the balance sheet at amortised cost, the StabFund had already used up its equity capital by the end of March. Up until that point, it had been necessary to make value adjustments amounting to roughly USD 5 billion. Nonetheless, it still looks as though the StabFund will ultimately be able to pay back the loan. This is because, on the one hand, markets can recover; the positive turn of events in April and May corroborates this. On the other hand, the assets have been generating relatively robust cash flows until now. Owing to interest payments and loan repayments, the SNB loan has already been reduced considerably. By mid-May, it came to only USD 23.7 billion. In addition, the original size of the StabFund has declined by around USD 6.7 billion as a result of sales, maturities and the closing out of derivatives positions. In mid-May, the size of the StabFund, as valued at amortised cost, was just roughly USD 32 billion, of which around USD 4 billion comprised contingent liabilities from derivatives. The performance of the stabilisation fund’s assets is due to be reassessed at the end of the second quarter. Approximately 80% of the SNB’s loan to the StabFund is denominated in US dollars. Originally, the SNB fully refinanced the dollar loan via the existing swap facility with the Federal Reserve. Now, less than 20% is refinanced thus, accounting at this stage for only about USD 3 billion.

As a result, the downward spiral, which was triggered by the collapse of Lehman Brothers last September and which, for a short while, even threatened to bring the global financial system crashing down, has come to halt. After having climbed to unsustainable highs in recent years, the prices of many investments fell to extremely low levels during the turmoil this past winter. The rapid recovery in the financial markets since March must also be partly regarded as a correction of previous excesses. Furthermore, the extremely expansionary monetary policy being pursued worldwide is likely to have also contributed to calming the situation. However, the recovery in the financial markets should not conceal the fact that uncertainty is still high. How sustainable the shift in market sentiment really is remains to be seen. The risk of suffering a setback remains correspondingly high. The SNB’s unconventional monetary policy measures At our quarterly assessment in March, we were confronted by the need to once again significantly expand our monetary policy. Since the repo rates were already practically at zero, we had to resort to unconventional monetary policy measures. We decided to conclude longer-term repo transactions on the one hand, and to purchase foreign currencies and Swiss franc bonds on the other. By simultaneously intervening in the money, foreign exchange and capital markets when necessary, a strong and broad-based monetary policy impact can be generated, without leading to any major distortions in the markets concerned. Allow me here to add a few remarks on our foreign currency and bond purchases.
Some in the private sector complain that there might be a lack of regulatory level playing field. But my own experience leads me to believe that supervisors themselves are just as aware of this. So I would encourage those in the private sector to work with supervisors in different countries to ensure the delivery of fair supervision across frontiers. If we can achieve confidence in that, then the intention of pillar two acting as a mitigant against greater prescription will I believe be realised in practice. That said, I recognise that in some jurisdictions the thinking behind pillar two represents a new departure in the philosophy, and perhaps legal basis, behind banking supervision. And in that way it represents a considerable challenge. BIS Review 14/2003  1  Maintaining the link with market practice Basel II has been a long process. But it is not an end in itself. Indeed if it were we would never achieve it. The markets, and the risks they give rise to, are not static. It is instructive, for instance, to reflect on just how much risk management theory and practice has advanced in the five years since negotiations on the Accord began. I have long felt that you need some mechanism to ensure that prudential standards remain appropriate as the state of the art moves on. That does not mean that the standards should be in a state of continuous flux. There is a good case for stability in the initial period while the Accord is being adopted.

Having worked on both sides of this argument, I am more than aware of the anxieties - and indeed disagreements - which have arisen during the long debate that has got us to where we are. But the direction seems clear even though storm clouds may appear from time to time. But what I would like to do today is to look beyond today's situation a little, and to share with you a few reflections both on the Basel process itself, and, looking forward, on some related issues. Importance of all three pillars in the new Accord Firstly a couple of observations on the Accord itself. One is to remind ourselves that the Accord has three pillars - not just one. Pillar one has had most of the attention hitherto. The challenge of producing greater risk sensitivity has been considerable. Technical experts from all areas of the business, model builders, and others, have been involved. This has generated a tendency to seek greater and greater granularity and has resulted, perhaps inevitably, in considerable complexity. Striking a balance between risk sensitivity and detail has not been easy. But faced with the detail of pillar one, the challenge going forward is not to lose sight of the other two pillars, and the role they can play in mitigating complexity. Pillar two Pillar two, it should be remembered, was designed to alleviate the need for excessive detail. Supervisory oversight was felt to be a better way to address the many complexities than detailed rules.
This all means that after the rebound of the economy completes, it will develop more smoothly, at a more gradual pace, as compared to the recovery growth of output observed over the last 12 months. In a situation when companies experience a shortage of workers or components, monetary policy measures promoting demand will not increase output or consumption. For instance, if the demand for cars rises even more, this will not boost their output, when there are no parts, but will only increase the queues for them and speed up price growth. 1/3  BIS central bankers' speeches  As regards inflation, it is above the forecast rate, and inflation expectations remain high. In August, annual inflation was 6.7%. According to the steady indicators of inflation measuring the inflation rate without volatile components, inflationary pressure continued to considerably exceed our target in both August and early September. Indeed, inflation is impacted by multiple factors that do not depend on our monetary policy. The most important of them are world commodity prices, the country’s fruit and vegetable harvest, and bottlenecks in global supply chains (container shipments, microcircuit manufacture, etc.). It has been stated recently that these factors should be completely ignored if monetary policy cannot influence them. This opinion leaves out one essential circumstance, namely, the fact that all these factors impact inflation expectations which, in turn, influence consumers’ sentiment and behaviour. Hence, they drive inflation across a wide range of products.

The Central Bank of Turkey has played a leading role in the modernization of payment services in Turkey. It has developed secure, reliable and efficient inter bank payment and settlement systems. According to a recent IMF report, payment systems in Turkey have a sound legal basis and the country is “in observance of the great majority of the provisions of the Committee on Payment and Settlement Systems and Core Principles for Systemically Important Payments Systems”. The Middle Eastern countries have made significant progress in this area. For example, Saudi Arabia is a member of the Committee on Payment and Settlement Systems like Turkey and tries to improve its payment systems infrastructure by establishing new payment systems with respect to the needs of its financial markets. Egypt has a project of establishing a real-time gross settlement system. There are also some other low value – large value payment systems in other countries. As you already know the regulation on International Bank Account Number (IBAN) has been implementing in Turkey and the use of IBAN is effectively overseen by the CBRT since 2008. The use of IBAN in region countries like Lebanon and Saudi Arabia contributes to the effective and safe money transfers between Turkey and these countries. A sceptic might say: “What counts is the profit one makes and the economic gains one gets. It does not matter whether we like each or not.” In our case this approach is wrong.