samchain/econo-pairs-v1 huggingface dataset:
That was justified theoretically by appeal to the comparative advantage of monetary over fiscal policy in controlling nominal demand or to Ricardian Equivalence or to the argument that fiscal expansions were harder to reverse than initiate. 2. Monetary policy was therefore assigned the primary role in short-term aggregate demand management, with policy conducted through the manipulation of a suitable short-run interest rate. BIS Review 111/2010  1  3. The monetary transmission mechanism operated mainly through longer-term interest rates, asset prices and expectations of future inflation. Expectations of future policy rates were central and credibility was key. These channels might be augmented by a weak credit channel but the banking sector generally was conspicuous by its absence, particularly in the New Keynesian synthesis models, which also dominated thinking within central banks. The importance accorded to expectations led naturally to an increased focus on communication and transparency. 4. The conduct of monetary policy was best delegated to an independent central bank, free of short-term political considerations. That was buttressed by academic thinking which drew attention to the potential time inconsistency of optimal policy when expectations of future policy mattered and which suggested that monetary policy was best delegated to conservative central bankers with long horizons. 5. Intermediate monetary targets were not useful, because of their unstable link with the ultimate objectives of policy (though that did not preclude them being helpful at times as indicators of future demand and inflation).

That is reflected in the fact that the ratio of the monetary liabilities of the banking system (broad money) to the monetary base has fallen sharply in both countries, as indeed it did in Japan a decade earlier. In its communications, the Bank of England has stressed the monetary impact of its asset purchases, but that has been on the quantity of monetary deposits in the banking system, not narrow money. Have these policies been effective? Or does Eggertsson and Woodford’s neutrality result apply? Studies of Japan’s earlier experience of quantitative easing suggested only rather modest effects. For instance, Bernanke et al. (2004) found that although the falls in government bond yields following bond purchase announcements were statistically significant, they were typically just a few basis points in magnitude. Nevertheless, over the period as a whole, the yield curve was somewhat lower than predicted by a macro-factor model of the term structure, consistent with some impact from unconventional monetary policy actions (including also the Bank of Japan’s zero interest rate policy). Oda and Ueda (2005) estimate bond risk premia using a structural macro-finance model and find that bond purchases had no significant effect in reducing those risk premia, though they do find that the zero interest rate policy reduced long-term rates by around 20–40bp.
Finally, if we are to use dispersion as a yardstick for the efficacy of monetary policy implementation, we should make use of individual transaction-level data to see how effective our tools are at uniformly affecting traded rates within each money market. Because transaction-level data are not publicly available, Darrell and Arvind’s index is based on “average” or “market” rates for each asset class. This means that they can assess only dispersion across money markets, rather than both across them and within them. Evaluating efficacy using transaction level data In my view, the difference between dispersion within markets, and dispersion across markets, is revealing about the nature of underlying changes in money markets. If competition were to become impaired, I might expect to see greater dispersion in rates within each individual market, as the decline in competition might allow for greater market power by individual borrowers and lenders, and therefore permit more price discrimination. In contrast, if intermediation were to be impaired, I would expect to see higher dispersion across money market rates, and more variable dispersion over time, even for very similar investments. This is because impairments to intermediation could result in greater market segmentation. Of course, such changes in dispersion either within or across markets could also result from other changes, such as movements in risk premia. One way of reducing the impact of movements in risk premia is to focus on overnight transactions only.

The most concrete example of reform based on the lessons learned from the crisis is that macroprudential policy has been established as a separate economic policy area. Over the last ten years, intensive efforts have been made around the world to define and implement macroprudential policy. Sweden has made some progress but more needs to be done. At the end of last year, Finansinspektionen, which has the main responsibility for macroprudential policy, was given the goahead by the Government to introduce a tougher amortisation requirement. This is, in itself, a positive development. But a regulatory framework that makes macroprudential policy more flexible needs to be put in place so that measures can be implemented quickly when necessary. Macroprudential policy can be specifically focused on reducing the risks associated with household debt. But the Riksbank’s assessment is that a combination of different measures is required in several policy areas to reduce these risks. 12 Above all, the fundamental causes of rising indebtedness need to be dealt with, something that is difficult to do without first tackling the Swedish housing market and its inherent imbalances. This is of course no easy task. But nevertheless an urgent one. As I mentioned earlier, the interest rate will be lower on average in the period ahead, sometimes much lower if monetary policy is to be able to meet the inflation target. The financial side of the economy needs to be robust enough to cope with such periods without macroeconomic developments being exposed to too large risks.
The emerging economies, although they did not experience the same problems, must take advantage of this opportunity to review their own situation, to draw lessons about what worked well or not, and to advance in the task of perfecting their financial systems. Chile’s institutional arrangements as regards financial stability have generally worked well in recent decades. This is borne out by the present strength of its financial system and the way in which it came through the recent crisis without major problems. But there are pending tasks and challenges. Large financial reforms may not perhaps be required but there is room for improvements in various areas. They include the need to create a mechanism for coordination and communication at the highest level with a focus on financial stability in which the government, the BCCH and the different financial sector supervisors participate. This would allow the BCCH to make its points of view known formally to the relevant authorities. Similarly, in a context in which financial activities have become increasingly complex, the bodies responsible for supervision need to be strengthened institutionally. From this point of view, particular attention should be paid to the resources assigned to them and their capacity to issue norms and regulation in a world that calls for constant adjustments and changes. Finally, it would be advisable for the BCCH to have a more active role in defining prudential regulation. In some cases, this role already exists but could be extended to other norms with systemic implications.

An organic law in force since 1989 establishes that the BCCH’s objective is to “safeguard the stability of the currency and the normal functioning of domestic and external payments”. 1  See Table 1 at the end of this document. BIS Review 142/2010  1  The first part of this objective is interpreted as the maintenance of price stability or, in other words, low and stable inflation. For the past ten years, the BCCH has applied a policy framework with an inflation target of 3% and a 1% tolerance range. The second part of its objective is directly related to financial stability. For payments to be made normally, the banking system, money and credit markets and supporting infrastructure must all function properly. The reference to external payments seeks to highlight the importance that trade and financial flows with the rest of the world have for an open economy such as Chile. Financial stability is, in other words, an essential part of the BCCH’s responsibilities, very much in line with what we see in most of the world’s economies. In the eyes of BCCH, the two parts of its objective are different and separable, but affect and reinforce each other. The management of monetary policy, which seeks price stability, requires that money and financial markets work well while financial stability requires, among other conditions, that inflation remains low and stable. The recent financial crisis has underlined the interrelations between these two objectives.
Might this perhaps be a niche which a cooperative bank, setting up shop here, might be able to exploit? Furthermore, I think that perhaps I should modify an observation I made earlier: namely, that the need to set up a cooperative bank in Malta has never so far been felt. On second thoughts, perhaps, this is not entirely true. For one of our smaller banks, one that, not surprisingly, was founded by a Jesuit priest in 1910, actually did begin life as a cooperative society. It was originally called the Lega dell’ Apostolato della Preghiera, and its main aims were the setting up of a number of initiatives, all with an underlying social purpose. These included: a savings bank, intended to instil habits of thrift among the working classes; a mutual benefit society; a printing press; the publication of a Maltese language periodical; an evening school for the teaching of languages, music and crafts; an emigration bureau to help Maltese citizens wishing to settle in other countries; schemes for the free provision of food, medicines and medical care to the needy; a public lotto office; and a recreational club for members. It – or at least the savings bank part of its operations – only became a private limited company as recently as 1970, just before Malta’s first Banking Act was enacted. And this, perhaps, should give us a clue as to why we do not have a Maltese cooperative bank today.

There is no doubt that the updated recommendations will enhance the level and methods of protection of the economic system against such type of crimes threatening it. In conclusion, I would like to express my thanks and gratitude for your respected group for its achievements accomplished during its short life, wishing you continued success. I thank the organizers for their efforts. I also welcome you again in the Kingdom of Saudi Arabia and I hope that your meetings in this session will be a success. 2  BIS central bankers’ speeches
•  Second, the central banks in developed economies are increasingly focused on more subtle analyses of the financial system stability in their countries, and inevitably, as a result and consequence of the globalization, in wider terms. It requires access to various information. We also face this imperative, if seeking to successfully address the potential financial market vulnerabilities and crises. Thus, the role of the financial sector in the economy and its interdependence with all other sectors created a need of establishment of a proper financial account statistics. Statistics that shows the flow of the financial assets across each sector in the economy. The successful delivery of this project needs joint work and cooperation between the National Bank and the State Statistical Office. I believe that the team of Ms. Novkovska and the experts of the National Bank will deliver this project successfully. Without this type of statistics, our financial stability analyses will lie on less certain ground. •  Third, there is a higher need of statistical treatment of the funds with the household sector. The steady increase in the funds of the household is an important trend which is present in the modern economy, and lately in our country, mainly owing to the fact that they have better access to banking credits. Considering the importance of this sector in the economy, there is a need of increasing the range of statistical information that refer to the household sector with a view to more relevant determining and analyzing of their current and future behavior.

While the underlying core inflation rate, that strips out volatile food and energy prices, has been somewhat higher than expected a few months back, it appears that the annual rate of core inflation2 has peaked and we expect it to begin to decline later this year.3 Finally, inflation expectations, which play an important role in the inflation process, remain well anchored. By this I mean that people expect that the rate of inflation will continue to be relatively low for some time to come. Regional economic conditions So how is the recovery proceeding in the state and the region? As I mentioned, the New York Fed produces indexes that help us track economic activity in the region. Based on these measures, the economic recovery got underway in both New York State and New York City in late 2009, and economic activity has continued to expand through early 2012. The New York Fed also conducts the monthly Empire State Manufacturing Survey to monitor conditions for regional manufacturers. The most recent survey, for which a number of Long Island firms participated, points to continued expansion in manufacturing activity throughout the first quarter of 2012 and heightened optimism about the general business outlook. Recently released employment revisions indicate that the economic recovery has taken hold on Long Island. But there still is a long way to go. Employment on the island declined by a little over 4 percent in the downturn – a steep drop, to be sure, but only about two-thirds of the decline that occurred nationally.
Meanwhile, the weakness of advanced economies leads us to believe that they will hold on to their low monetary policy rates for a very long time. These low real interest rates help boost domestic demand in surplus economies with sound financial systems, like ours. The consequence is a global reaccommodation of the currencies: deficit countries depreciate their real exchange rates, while the rest of the world appreciate theirs. Within this context, the currencies of most emerging and/or commodity exporting economies are facing pressures for a real appreciation. The Chilean peso is part of this process of global parity re-accommodation. Our currency has appreciated significantly with respect to that of deficit-ridden economies: the US, the UK and, to a lesser extent, the Eurozone. However, it remains stable or has depreciated with respect to the currencies of other emerging or commodity exporting economies (figure 2). One problem is that not every country is contributing to the foreign exchange adjustment at the same pace. Such a disparity creates tensions in the world economy. In the Eurozone, the rigidity imposed by the single currency slows down the real exchange rate adjustment between economies that are going through very different stages in the cycle. In China, high savings and foreign exchange market interventions hinder the adjustment. This can amplify the effects on other currencies in emerging and commodity exporting economies. However, underlying pressures continue to manifest themselves in other ways. In the deficit economies of the Eurozone, the recession and its accompanying deflationary pressures depreciate the real exchange rate.

In this regard I would like to call upon other corporate entities and business houses in Lusaka and other cities around the country to emulate the efforts of the financial sector and help keep Zambia a beautiful, clean and healthy place to live in. I must hasten to mention here that, by undertaking such initiatives, we are in no way trying to take over the responsibility of the local authorities but merely supplementing their efforts of keeping the country clean and healthy. BIS Review 112/2009  1  Hon Minister, allow me to make an earnest appeal to the local authorities through “His Worship the Mayor” to assist in the maintenance of the islands by providing security to minimize the rampant vandalism, theft and destruction of plants and other essentials that occur on a daily basis. We also make a humble request to the Lusaka City Council to consider working on the water reticulation system, as this is one area posing a great challenge in the maintenance of the islands. Furthermore, there are still a number of places, which require urgent attention in the City. Your Worship, we have observed that a number of incomplete buildings have been abandoned posing a danger to the lives of many while others remain without a colour wash for years giving an unattractive sight to our beloved capital city.
The weakness of bank lending over the recent past has motivated much discussion on the reasons behind this and on the best policies to deal with the situation. In order to define these best policy measures, it is important first to fully understand the behaviour of this phenomenon and to identify possible frictions in the credit market that may be hampering its recovery. With this in mind, I will next provide an overview of the main factors explaining recent credit developments in Spain: first, in the context of the crisis period, and then in the current recovery phase. I will conclude with some reflections on possible policy considerations. 2. The determinants of bank credit in Spain during the crisis  When analysing the factors behind the contraction of bank lending during the crisis it is useful to distinguish between demand and supply elements, even after discounting the practical difficulties in separating both components. 2.1. Demand-side factors  Starting with the demand side, several factors contributed to the sharp reduction in the demand for credit during the crisis. First, loan demand fell sharply as a result of the deterioration in economic conditions, which limited current and planned spending levels and, hence, the need for new credit. Second, the need of households and non-financial corporations to deleverage and rebuild a sounder financial position is another factor behind the pronounced slowdown in credit demand.

Financial institutions, such as those represented here, with a mandate to promote access to financing for SMEs, can make an important contribution in this field. In any case, it is also necessary to study ways to tackle directly the asymmetric information problems faced by these firms. This in turn requires enhancing the quality and quantity of information available on both the credit track record and the financial situation of companies. In this regard, it is worth mentioning a new regulation recently approved in Spain that obliges banks, under certain conditions, to pre-announce three months in advance should they decide not to roll over existing credit lines or loans at maturity. Also, in those cases banks are obliged to provide relevant information on the credit profile of their customers whose loans are not rolled over. The Banco de España, in response to the mandate conferred to it under this new regulation, is currently working on a Circular, which will specify the relevant information to be  BIS central bankers’ speeches  3  provided to the SMEs in these circumstances, together with a methodology to produce a standardised report on the SME credit assessment. Other actions that could also help mitigate the possible frictions in the credit market during crisis periods include those facilitating debt restructuring by improving the bankruptcy legislation. These measures, if well-designed, could help to smooth the reallocation of resources from non-viable firms to viable and productive firms.
In its latest report the International Monetary Fund lowered its estimate for world growth for 2015 by 0.3 pp to 3.1%, with the developed and emerging economies expected to perform differently. The pick-up in activity continues in the advanced economies, underpinned by favourable financing conditions and low commodities prices, while inflation is running at very low rates. In most of the emerging economies, activity continues to fall, owing not only to conjunctural reasons in the international environment, but also to more structural factors, such as lower productivity gains and demographic factors. Activity continued to slow in the emerging Asian economies, while in Latin America it is stabilising at very low rates, albeit with notable differences from country to country; in turn, in some cases, inflation stands above the authorities’ targets, due partly to the depreciation of their currencies. Of particular significance for the world economy are the developments in China, which posted an annualised rate of GDP growth of 6.9% in the third quarter. That entails a slowdown, but one milder than anticipated. However, uncertainty over its medium-term growth rate persists bearing in mind the authorities’ intention to lead the Chinese economy towards a more sustainable and more domestic consumption-led model. The consequences of the slowdown on the world economy, mainly via the effect of the decline in commodities prices on exporting countries’ economies, are so far projected to be limited.

Denny H Kalyalya: Expansion of Zambia’s banking sector Remarks by Dr Denny H Kalyalya, Deputy Governor-Operations of the Bank of Zambia; at the official opening of Bank of China’s new premises, Lusaka, 9 December 2008. *  *  *  • Honourable Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, MP; • His Excellency – the Chinese Ambassador to the Republic of Zambia; Mr. Li Qiangmin; • Managing Director of the Bank of China (Zambia) Limited; Mr Du Qiang; • Distinguished Invited Guests; • Ladies and Gentlemen. I am greatly honoured for having been invited to speak on the occasion of the official opening ceremony of Bank of China’s new premises. Ladies and Gentlemen As part of the on-going Zambia-Chinese relationship, the Bank of China was established in 1997. Since then the Bank has recorded tremendous progress. Distinguished Invited Guests During the past 8 years, the overall financial performance and condition of the banking sector has been satisfactory. The sector has continued to expand and we anticipate increased economic and investment activity in the period ahead. Banks are expected to continue to provide the required level of finance to consolidate the economic gains registered so far. The Bank has achieved tremendous growth since its inception in 1997. During the last eleven years, total assets have increased by 325% to K507.9 billion in October 2008 from K13.8 billion in December 1997. Regulatory capital increased by about 1,000% to K41.9 billion in October 2008 from K3.8 billion December 1997.