samchain/econo-pairs-v1 huggingface dataset:
1986:1 -1999.12 ( ex 1990:9) :  17.9 [18.0]  3.60  2000:1 -2004:07  27.7 [27.4]  4.51  O IL  04  Figure 3 Correlation between oil price and GDP R e v e r s e d c a u s a lit y : O il is d e m a n d d r iv e n s in c e 1 9 9 5 40  .0 5  35  .0 4  30  .0 3  25  .0 2  20  .0 1  15  .0 0  10  -.0 1 1985  1990  O IL _ O E F  1995  2000  G DPW O RLD_YY  Correlation: World-GDP (yoy) and Oilprice  6  1980 -1994.4  -0.389  1995.1 -2004.4  +0.330  BIS Review 69/2004  Figure 4 US oil inventories  60  360 340  50  mn barrels  320 40  300  30  280 260  20  240 10  220 200  0 1  4  7  10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 W eek  W eekly Min and Max since 1994  Crude Oil Inventory 2004 (4wk avg.)

As Fed Governor Gramlich has stated in a recent speech on oil shocks and monetary policy, the worst possible outcome for monetary policy makers would be “to let inflation come loose from its moorings”.4 Central banks will remain vigilant in their examination of longer-term inflation expectations. The Swiss National Bank, for one, would promptly react if there were any indications in its quarterly inflation forecast that second round effects were likely to undermine its long-term track record of maintaining price stability in support of maximum sustainable economic growth. Appendix Figure 1 Nominal and real oil prices on oil  Economic dependency in bbl/th GDP in PPP 1.2  [USD/bbl] 60  1.0  50 Brent crudenominal Brent crudereal 1971  40  0.8  0.6  30 0.4  20  0.2  10  0.0  0 1970  US Germany France Switzerland  1975  1980  1985  1990  1995  2000  1980  1985  1990  1995  2000  Source: BP, OECD, GS  4  Edward M Gramlich, “Oil Shocks and Monetary Policy”, Remarks at the Annual Economic Luncheon, FRB Kansas City, Missouri, 16 September 2004.
Lars Heikensten: Stability and Growth Pact needs reinforcement Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at a conference organised by the European Commission, Brussels, 15 December 2004. *  *  *  Thank you, Mr Chairman. I very much appreciate this opportunity to comment on the work of the Commission. Perhaps the invitation is particularly pleasing for me as, unlike the other members on the panel, I do not come from a country that has introduced the euro. I should also immediately say that I very much enjoyed reading the background report and the communication on the Stability and Growth Pact produced by the Commission. Let me begin by characterizing the experiences from the Monetary Union so far. There is no doubt that the regulations on fiscal policy laid down in Maastricht had clearly positive effects up until the euro was launched. They are still having the same impact on those countries that remain outside the single currency and have the ambition of joining in the future. Far-reaching measures were taken, and are also being taken today, to enable entry into the Monetary Union. Noting the progress, some people have even claimed that earlier less well-functioning national economic-political cultures have been replaced by a more stability-oriented common European culture. But since the start of Monetary Union, this momentum has been lost. Several countries have returned to their old behaviour even though there are good examples of the contrary.

The demands that fiscal authorities can impose on the ECB are that the bank conducts a clear, consistent monetary policy aiming at price stability for the Union as a whole, which can be understood and predicted. In the same way the authorities responsible for monetary policy should be able to count on  a clear, predictable and long-term fiscal policy targeted at achieving balance over the economic cycle (after taking account of the demographic changes that now lie ahead). More generally, I think that we in Europe should model our approach on cooperation between the monetary and fiscal authorities along the lines of the relationship between the Fed and the Treasury during the Clinton years. Europe would also be better off if the finance ministers followed the advice of my British colleague at a recent meeting “ask not what the ECB can do for you, but what you can do for the ECB”. There may also be a need for more collegial leadership from the euro area’s finance ministers, particularly if rapid coordinated action is required, something that can not be ruled out. One example could be a situation with a dramatic and substantial change in the exchange rate, another a financial crisis. A strong Eurogroup with a respected chairman should be positive in this regard and should facilitate an effective dialogue with the ECB. II. Allow me now to comment on the Stability and Growth Pact itself. It is not difficult of course to see economic arguments in favour of amending the Pact.
With respect to rule setting, for example, a project is underway to use advanced analytics to understand the complexity of the PRA rulebook.6 We hope to use the results to identify ways to simplify our rules to make them easier to comply with. The PRA Rulebook contains 638,000 words –77,000 words longer than War and Peace in English translation. The complexity of the language used can make the text difficult to read. Another layer of complexity is added because of cross-references and links between different parts of the Rulebook, requiring the reader to refer backwards and forwards, disrupting reader flow. Figure 2 is a visualisation of the Rulebook. Each node is a part the PRA Rulebook. Each line between the nodes is a cross-reference in the text. When parts of the rulebook are linked together, tweaking one part can have unintended consequences for others. We can quantify the interconnectedness of different parts of the rulebook using the PageRank algorithm, the same algorithm used by Google’s search engine. A higher score implies greater connectivity of a particular part to other parts. Happily, most parts of the rulebook are self-contained and ‘‘structurally simple’. ‘Looking further into the future, a bigger win might be to automate the rulebook entirely. Regulated banks are required to submit large quantities of data to regulators. The cost of collecting and reporting data to meet regulatory requirements is a significant burden to both regulators and regulated firms. Regulatory data collections also have significant time lag s, normally 4 to 6 weeks.

Beijing is concerned that in the run-up to the Taiwan Presidential Election in March next year, President Chen Shui Bian may make one last throw of the dice which may compel China to act. How the US handles this issue will be crucial in maintaining stability across the strait. Third, Myanmar cannot return to the status quo ante after the government’s crackdown on monk-led protests. Instability in Myanmar can affect its immediate neighbours and hurt the reputation of ASEAN. National reconciliation and an agreement on phased changes and  BIS Review 124/2007  1  power sharing is the only way to prevent another widespread protest, which may end up in a bloody uprising to bring about change. Therefore, ASEAN and Singapore, and so too China and India, fully support the mission by the UN Secretary General’s Special Advisor, Mr Ibrahim Gambari, to help the various parties in Myanmar work towards genuine dialogue and compromise. However, this compromise is not so easy to achieve. Myanmar’s military rulers, the many ethnic groups and the political players deeply distrust one another. The rulers are also highly suspicious of the outside world. This psyche of distrust was borne out of the violent and divisive history of Myanmar after World War II, its complex national make-up of many diverse ethnic groups and, until the recent agreements on ceasefire, the fighting with insurgents. There is no quick and easy solution. Negotiations will be long and complicated.
The big moves in asset prices during 2009 – a 50% rise in equities, 150bp fall in LIBOR spreads, the 150 bps fall in targeted corporate bond spreads for example – will have been strongly supported by the Bank’s monetary policy operations. And by purchasing the gilts which asset managers and others would normally have bought, the impact of the quantitative easing programme will have been to increase the demand for more risky assets – like corporate bonds. So the corporate and gilt purchase programmes have been complementary. Conclusion In my talk this evening, I hope I have explained a bit more clearly the motivation for and the design of the APF corporate purchase schemes. The Bank has not sought to provide large scale funding directly using public money. Rather, the operations have been consistent with a central bank acting as “Market Maker of Last Resort”. The Bank has transacted in modest quantities designed to improve the liquidity of corporate credit markets, bring down the cost of credit and encourage private sector lending. That has been supported by the much larger programme of quantitative easing and the low level of Bank Rate. The evidence suggests that, in conjunction with a very large monetary stimulus, abroad as well as at home, the corporate purchases have been successful in helping to invigorate those corporate credit markets in which the Bank has intervened. References Benford J, Berry S, Nikolov K, and Young, C (2009), “Quantitative Easing”, Bank of England Quarterly Bulletin 2009 Q2, available at http://www.bankofengland.co.uk/publications/quarterlybulletin/qb090201.pdf.

5  1  An additional element has been exchange rate targeting which was based on an external anchor. Effectively, this represents an intermediate objective if domestic credibility of the central bank may be weak. 2  See Greenspan (2002), Blinder (2005), Mishkin (2007) and Bean, Paustian, Penalver, and Taylor (2010), “Monetary Policy after the Fall”, Federal Reserve Bank of Kansas City Annual Conference, Jackson Hole, Wyoming, August. 3  See the discussion in Christiano, Ilut, Motto, and Rostagno (2010) on “Monetary policy and Stock Market Booms.”  4  See “A Monetary Policy Strategy in Good and Bad Times: Lessons from the Recent Past” Fahr, Motto, Rostagno, Smets and Tristani, ECB Working Paper Series No. 1336, May 2011. 5  See the evidence in Fischer, Lenza, Pill and Reichlin (2008): “Money and monetary policy – the ECB experience 1999–2006” and Trichet (2008): “Risk and the Macro-economy”, Keynote address at the conference “The ECB and its watchers X”. 2  BIS central bankers’ speeches  Nonetheless, I think it is fair to say that nobody – including central bankers – has expected a crisis of the dimension that we have been experiencing since five years. 6 The overall favourable macroeconomic constellation from the Great Moderation, with low volatility and robust growth, has certainly induced some benign neglect – also on the policy side.
We will introduce a new AIDA-Lite track to support financial institutions adopting existing AI solutions in the market. We will require all AIDA applicants to work with the Institute of Banking and Finance (IBF) to actively look out for at-risk workers impacted by AI adoption, and to develop a training plan to keep them employable. To sum up, the enhanced FSTI 2.0 renews and anchors MAS’ resolve to support the financial industry in its journey … a journey of continued innovation and experimentation; deepening our local talent pool in new technologies; and 4/5  BIS central bankers' speeches  better serving our societies – here in Singapore and across the world. 5/5  BIS central bankers' speeches

In fact, this is the first crisis episode when the initial reaction of the National Bank was loosening and not tightening the MP. This time, despite the strategy of de facto fixed exchange rate, solid fundamentals and strong official reserve buffers allowed for loosening of the monetary policy and adopting regulatory flexibility. Also, our initiative for access to the ECB backstop facility, which was also supported by other central banks in the region, and the positive ECB response, allowed for wider space for accommodative policies. The symbiosis of these actions has enabled conducive financial conditions, i.e. decline of borrowing interest rates at historically low levels and uninterrupted credit flows growing at a rate of 6% annually, double than in the EU, that helped "ring –fencing" of the labor market, preserving wages and jobs. Where do we stand now, what are the major challenges ahead and is it time for complacency? A common denominator for all policy makers at the moment is the lingering uncertainty. Many scenarios are in place, from smooth and orderly recovery, through strong rebound with price pressures, ending to stalled recovery amidst new and more virulent strains. From a central bank perspective, our advantage is that there is still policy room for maneuver, although narrowed.
Consequently, it does not seem right to me to call Spanish banks “traditional”: Spanish banks bend over backwards for the customer, obtain information and management advantages from their detailed knowledge of their customers and have demonstrated their innovative capacity in the marketing of different products, in their risk control and management mechanisms, and in the application of organisational developments and technological processes, enabling the sector to become one of the world's most advanced and efficient. What will happen to banks in Spain over the next few years? The road travelled so far has thus seen the entrenchment of a banking system with a proven capacity to manage risk and high levels of profitability, efficiency and solvency. This system has contributed decisively to the Spanish economy’s continuously strong growth since 1994 and has withstood the first two phases of the international financial crisis well. At the onset of what I have called the third phase of the crisis, the sector is in a strong position. Moreover, the Banco de España has the ability and experience to resolve the most complex situations without damaging savers or the economy as a whole. However, although there is no sign of problems at Spanish banks in the short term, there is a temptation to which we bank supervisors must never succumb: complacency. Thus, I feel obliged to conclude by identifying the challenges that the Spanish banking system is going to face and suggesting the action necessary to overcome them with the greatest guarantee of success.

This has also been the case if we look at developments in Sweden compared to developments in the euro area since 2000. Wages  2  See for example L. Calmfors, ”Kris i det svenska avtalssystemet?”, Ekonomisk debatt no. 1, 2008 and P. Braunerhjelm et al., ”Krisstämpeln på det svenska avtalssystemet – en överdrift”, Ekonomisk debatt no. 5, 2008. BIS Review 154/2008  7  have increased more rapidly in Sweden than in the euro area, but the development of productivity has also been stronger in Sweden while inflation has been approximately the same (see Figure 12). For the manufacturing industry, the situation is largely the same in an exchange rate regime with a floating rate as in a regime with a fixed rate in the sense that the wage agreements must look to the future with regard to the development of costs abroad. Normally, it may be reasonable to assume that the exchange rate remains unchanged, which is illustrated by the stable development of the krona against the euro from 2002 until this autumn. A hypothesis of an unchanged exchange rate provides the same conditions under fixed and floating exchange rate regimes. The krona has weakened significantly in the course of the ongoing financial turbulence, although in the long term we expect it to return to roughly the same level it was at before the crisis. Hopefully, the krona will have stabilised at a higher level than the present level before the round of collective bargaining in 2010.
The diverse range of institutional investors creates a strong demand for sukuk that efficiently channel funds and liquidity in the market. Tesco, a UK-based company, opted for sukuk issuance rather than bond under its conventional and Islamic MTN program due to the cost effectiveness of issuing the former. We welcome sukuk issuances by other foreign entities, leveraging on Malaysia’s expertise and framework. New development in Malaysia Malaysia has promulgated the new Islamic Financial Services Act or IFSA in 2013 to provide for a comprehensive regulation and supervision of Islamic financial sector in compliance with Shariah. Under IFSA, Islamic banks are required to segregate deposits that are principle guaranteed from investment accounts that are non-principal guaranteed. This allows Islamic banks to develop a wider range of products to meet investor risk-return preferences where the return to the investor will be more directly linked with the performance of the deposit fund. The financing extend beyond debt-based to include equity-based financing. This effort will further promote economic growth by broadening the financial intermediary role of Islamic banks. Way forward The Forum today marks a new phase in our relationship as the industry players in both countries are taking the lead in sharing insights, exchanging ideas and taking efforts to encourage cross-border Islamic finance transactions. The UK-Malaysia unique niches create immense synergistic collaboration, leveraging on our respective strengths to accomplish mutually rewarding outcomes.

However, price developments are uncertain even six months to a year ahead. There was thus a possibility that inflation could fall even lower than projected, and be more than one percentage point below target. As from May 2003, core inflation (measured by the CPI-ATE) has been more than one percentage point below target. Average core inflation in 2003 is now projected at 1¼ per cent. The difference between the outcome and the projection thus proved nevertheless to be unusually wide, largely reflecting the fact that the economy was exposed to sizeable, unexpected disturbances. Inflation through 2003 has been pushed down in particular by the fall in prices for imported consumer goods. The low rise in imported price inflation is a consequence of the appreciation of the krone throughout 2002 and low inflation abroad. The rise in prices for domestically produced goods and services has also slowed somewhat. This is particularly the case for prices for domestically produced goods influenced by world market prices. Weaker than expected economic developments in 2003 The krone appreciated more in autumn 2002 and at the end of the year than assumed in our projections. This was related to unexpectedly weak developments in the global economy resulting in lower interest rates abroad and a wider interest rate differential between Norway and other countries. 1  A measure of core inflation is the rise in consumer prices adjusted for tax changes and excluding energy products (CPI-ATE).
This is why we should rely on a suite of models, and on actual data as much as on models. - the restrictive effects on activity, while being in mean reversed in 2025, are quicker than the dampening effects on inflation: hence we should be patient and consistent, including in our explanations to the broad public. The estimated transmission lags of monetary policy in the literature vary from one year5 to more than two years6. But interpreting these lags is more art than science. Overall transmission lags of monetary policy to inflation can vary over time and across jurisdictions, depending on factors such as the level of interest rates, the phase of the cycle and the sectoral structure of the economy (e.g. share of manufacturing, services, or housing). In the current tightening cycle, several factors suggest that the lag in transmission of policy to the real economy may be at the upper end of the two-year range. First, the current tightening cycle started from exceptionally low levels of real interest rates – as measured by nominal OIS rate deflated by market inflation expectations. 5  5. Smets and Wouters (2005); see also ECB NAWM model presented in P. Lane’s lecture on 16/02/2023, “The euro area hiking cycle: an interim assessment”. 6 Badinger and Schiman (2023), Measuring Monetary Policy in the Euro Area Using SVARs with Residual Restrictions. American Economic Journal: Macroeconomics 2023, 15(2): 279–305, or; see also ECB-BASE model.

The vast bulk of the Fed’s portfolio is highly liquid – currently we hold $ billion of Treasury securities, $ billion of agency mortgage-backed securities, and $ billion of agency debt against about $ billion of excess reserves. All the excess reserves could be mopped up by asset sales alone if that proved necessary. The Federal Reserve has been very aggressive in responding to the financial crisis. We have rolled out numerous new liquidity facilities and have engaged in lending activity under Section 13(3) of the Federal Reserve Act for the first time since the Great Depression. These actions have been successful in mitigating the risks of financial collapse and a more severe  4  BIS Review 122/2009  contraction in economic activity. The financial system is now healthier and the economy is recovering. But despite these successes, we need to be clear that what has happened to our financial system and the economy is wholly unsatisfactory, and that a broad range of regulatory policies and practices need to be recalibrated to address the shortcomings of our financial system. With inflation low and long-run inflation expectations stable, and our ability to remove monetary accommodation in a timely manner intact, our near-term focus should be to keep significant monetary accommodation in place for an extended period in order to achieve our dual objectives of maximum employment and stable prices. Thank you for your kind attention. I would be very happy to take a few questions. BIS Review 122/2009  5