samchain/econo-pairs-v1 huggingface dataset:
So, the fact that we disagree should be seen as a sign that everything is working the way it is supposed to. It would in fact be surprising if the entire Board supported every interest rate decision made. Unusually difficult to assess the situation The third thing I would like to point out is perhaps the most important. This is that the even vote is of course more than anything else a sign that it is unusually difficult to assess the current situation – there is a fine balance to be drawn. I think that it is important to say this as this is not really the picture that has emerged from the debate. Instead, an unchanged repo rate has most often been portrayed as the only reasonable and self-evident alternative. Even though I myself eventually came to the conclusion that the interest rate should remain unchanged, I must say that I did not feel that this was an entirely self-evident decision. The Executive Board thus decided by the smallest possible margin to increase the interest rate by 0.25 percentage points. Three main reasons were given for this. First, inflation has continued to increase. In July it reached the highest level measured since the mid-1990s and was far above the inflation target. The much-publicised revision of the CPI by Statistics Sweden last week does not significantly alter this picture, by the way, even though the figure for June is now higher than that for July. Secondly, inflation expectations are also still high.

Different measures paint slightly different pictures, but all of the measures are above the inflation target. Thirdly, cost pressures have  1  For a review of current research see, for example, Blinder, A., ”Making Monetary Policy by Committee”, an essay presented at the conference ”International Experience with the Conduct of Monetary Policy Under Inflation Targeting”, 22-23 July, 2008, Bank of Canada. 2  See, for example, Blinder, A. and J. Morgan, ”Are Two Heads Better than One? An Experimental Analysis of Group versus Individual Decision Making”, Journal of Money, Credit and Banking 37, 2005, 789-811. 2  BIS Review 113/2008  increased. This is largely related to the fact that growth in productivity has been surprisingly weak for some time. The assessment made by the majority was that an increase was needed to prevent price rises for energy and food from spreading to other areas – to prevent the high level of inflation from becoming entrenched. The increase is expected to help bring inflation back to a level close to the target within a couple of years. Resource utilisation is also expected to fall but to be roughly normal at the end of the forecast period. At the same time as the repo rate was increased, the repo rate path for the period ahead was adjusted downwards compared to the decision taken in July. This is partly because growth has slowed down more than expected in Sweden and abroad and partly because the price of oil and the prices of other commodities have fallen.
This is a joint initiative by the Association of Banks in Malaysia and supported by the Royal Malaysian Police and Bank Negara Malaysia. To coordinate and expedite actions against the operators of financial scams, a taskforce led by the Attorney-General’s Chambers has also been established under the National Coordination Committee to Counter Money Laundering. Our regulatory approach will continue to strike a right balance between innovation and the stability of the system. We are ready to adapt regulations to support emerging technologies and changing business and operational models when they bring clear benefits to our financial system and economy, and when the risks are well-understood and managed. New requirements for eKYC solutions that were recently released for industry feedback are an example of this. We will also be releasing guidelines for digital currencies by the end of this year to address risks associated with money laundering and terrorism financing. Last but not least, let me state that Bank Negara Malaysia values our cross-border partnerships with financial intelligence and law enforcement agencies. We will continue to cooperate constructively with our counterparts, including through our membership in the Financial Action Task Force (FATF), to safeguard the integrity of the global financial system. This partnership at the international level is increasingly critical as money laundering and terrorism financing transcend borders. More importantly, our efforts are to secure the future of our economy and the trust of our people by effectively preventing abuses of the financial system for criminal purposes.

If this is the case, then indeed the rules are just ‘burdens’, rather than instruments to assist banks’ operations and safeguard confidence in the financial system. Compliance therefore, is merely a means to an end. It is a process that enables us to achieve certain outcomes. Having the right controls in place merely gets us to the starting line. The real race is in creating and sustaining an environment where everyone in the organisation is involved 1/4  BIS central bankers' speeches  in preventing the systematic abuse of the financial system. This process is not a sprint, but a marathon of endurance and perseverance. To drive the point, someone once asked, “How many compliance officers does it take to change a lightbulb?” The answer is three, one to change it, one to check it and one to check it again, and file a report. This illustrates how compliance can often be seen as an end to itself, forgetting that it should be focusing on the end game, the quality of light emitted. From the regulator’s perspective, rules have progressively evolved from detailed prescriptions in the past, to standards and best practices today. This is due to the rapid pace of innovation, increasing complexity of financial services and the realisation, that a ‘one-size-fits-all’, micromanaging and prescription-based approach is not an optimal approach in regulation. Thus, institutions have more latitude in implementing these standards at the micro level.
However while such measures have removed near-term uncertainty, they could prove insufficient to provide a lasting change in the negative sentiment of investors on the mediumterm if budget deficits and debt situation are not considerably improved. In this context, European authorities have to show their strong level of cooperation and commitments to global and common solutions. Any unilateral and uncoordinated decision may notably prove to be less efficient and may amplify markets volatility. Finally, the removal of vulnerabilities in the banking sector is desirable to alleviate uncertainties. Effective risk management, transparency and robust business models are essential to strengthen banks’ resilience to shocks and to ensure adequate funding of real economy that underpins sustainable growth and financial stability. The effective and timely implementation of the G20 policy orientations is necessary to build the new international system on a solid and stable ground. This is notably the case for the G 20 provisions on the CDS market and on credit rating agencies. One cannot deny that certain OTC derivatives (CDS for instance) or certain types of transactions (short sales) are likely to exacerbate price movements or create instability that are detrimental to both issuers and investors. One may thus find it tempting to ban or drastically limit this type of operations and we indeed have observed national proposals going in that direction, including the bank of naked CDS, naked short sales or mandatory shorter time horizon for settling transactions. I am of the view that such measures may not be efficient and, worse, may be counterproductive.

Overall, although liquidity remains ample, it is unlikely at this stage that it will give rise to inflationary pressures, given the current economic environment and the expectation that some of the portfolio shifts will be reversed once the financial market uncertainty diminishes. This assessment is supported by the continuing moderate growth of loans to the private sector, particularly to non-financial corporations. As regards the information under the second pillar, recently published data and survey information indicate that economic growth in the euro area remained subdued around the turn of the year and that the overall sentiment in the economy remained lacklustre. While these indications suggest that growth dynamics will remain weak for the early part of this year, the most likely scenario remains that of a gradual increase of real GDP growth rates, starting in the second half of 2003. The current low levels of interest rates should contribute to this scenario materialising. In addition, while the appreciation of the euro over recent months is likely to contribute to a dampening of export growth to some extent, this should be counterbalanced by the assumed recovery in the world economy. In this respect, it should also be taken into account that the price competitiveness of euro area companies remains favourable in a medium-term perspective. At the same time, uncertainty regarding the economic outlook remains high, in particular due to the ongoing geopolitical tensions.
But regardless of the projects, the aim is always to transfer our excess reserves outside the SNB in order to manage them more effectively than within the central bank and its relatively restrictive framework. On our side, we are not keen about the idea of being in charge of managing a large reserve  BIS Review 73/1999  4  portfolio. We do not wish to wear two hats, one as central bank in charge of monetary policy and that of asset manager for the country. We could run the risk of being caught in the crossfire of criticism when it comes to executing a mandate which is not a part of our basic responsibility. One way or another, the transfer of excess reserves by the SNB to one or several outside entities is not just a simple accounting problem. Even though the National Bank is independent it does not have the legal power to dispose of a part of its own resources for other purpose than monetary policy. Legislative and constitutional steps are necessary and they are currently under way. It is important to have them in mind because they may hold a few surprises. 3. The political process 3.1 First stage: demonetisation of gold The first stage, which aims at demonetising gold, is already well under way. The demonetisation of gold required two legal adjustments: • •  a revision of the Swiss Constitution a revision of the current Coinage Act.

Det framtidige omfanget av petroleumsvirksomheten på norsk sokkel” [The future of petroleum activity. The future scale of offshore petroleum activity in Norway]. BIS Review 145/2010  1  The Committee had limited confidence in the government’s ability to save: The Committee stated the following concerning a savings fund: “It is up to the political authorities to determine whether such a fund construction designed to avoid a future decline in income is realistic. The Committee chooses not to build on such an assumption.” The notion of a sovereign oil fund matured through the 1980s. The government, under the premiership of Kåre Willoch, called for the establishment of such a fund in the Long-Term Programme presented in spring 1986, and the Act on the Government Petroleum Fund was passed in 1990. The main rules are: First: The totality of government petroleum revenues is transferred to the Fund. Second: The Fund is integrated into central government budgets and accounts. The non-oil deficit is covered by an annual transfer from the Fund. The government cannot borrow to finance current expenditure as long as there is capital in the Fund. Third: The capital in the Fund can only be used for domestic spending via general budget transfers, and not for earmarked transfers. Fourth: The Fund’s capital must be invested abroad. When the Act was enforced, the Norwegian economy was in a deep downturn, with high unemployment and government budget deficits. Projections also indicated that offshore production would pass the peak in the early 1990s 5 .
The basic problem was that our models do not capture the various financial links that played a major role during the financial crisis, and we therefore underestimated the risks. You might think that in such situations we should tone down the model analysis and instead rely on assessments of various indicators, which in fact the Riksbank did, but we could have performed better here too. We made substantial downward revisions in the figures for GDP, but we did not expect the fall to be as great as it actually was. When assessing GDP during the fourth quarter of 2008 we should, in my opinion, have attached more weight to the alarm signals that came from our company interviews, especially as data from the business tendency surveys, the statistics on redundancy notices and falling share prices all pointed in the same direction. On the other hand, the underestimation of the fall in GDP did not affect  9  See the minutes of the Executive Board's monetary policy meeting from 10 February 2009. BIS central bankers’ speeches  9  the conduct of monetary policy as the repo rate was still reduced substantially, by several percentage points, over a short period of time. Nor do I believe that the conduct of a less restrictive monetary policy earlier in 2008 would have had much effect on the course of the crisis. That is not the point. The point is that the misjudgements made by the Riksbank were partly due to shortcomings in the analysis.

We also conduct our own company interviews in which we get direct information on how various submarkets are functioning in practice. The indicators often provide a slightly diffuse picture of the state of the economy. Here we find various indicator models useful in that, on the basis of an analysis of the historical significance of different indicators, they help us to put our most important forecasts into figures. Ultimately, we also have to weigh information that is not captured by our indicators into our assessment of the current state of the economy. Model forecasting is the next step Once we have produced a forecast for the outlook abroad and performed an assessment of the current situation we are ready, with the help of various large macro models, to produce forecasts for longer time horizons. It could be said that the models give a description of how prevailing impulses from abroad and the initial state of the Swedish economy will affect the development of the economy. In the very long term, however, the effects of the prevailing impulses will have faded and the economy will then follow a balanced path in the long run. This balanced state, which in model terms is often called a steady state, is an important characteristic of a model. We could perhaps say that an assessment of the current situation tell us where we are while models tell where we are going in the very long term.
In such cases, borrowers will of course do all they can to avoid a default and first of all try to lower other expenses. This may mean cutting back on non-essential consumer spending or postponing maintenance work or investments. A default, after all, has far-reaching 7 8  In this simplified example, no mention is made of the risk/return considerations that naturally need to be made in such a case. This is also what the empirical literature suggests. An advanced financial system and access to efficient credit provision are closely linked to growth and a high level of prosperity (cf. Beck (2011) and Levine (2005)). It should be kept in mind that a modern financial system comprises further key elements besides the credit mechanism, in particular payment systems, market places for trading shares and bonds, and insurance business. Page 5/16  consequences. In the case of the start-up, it could possibly lead to insolvency. The Miller family for their part might be forced to sell the house in an emergency sale. When borrowers face payment difficulties or default on their loan, this also causes problems for creditors. They will have to write off anticipated interest income and may even lose the money lent if the loan isn’t secured by collateral. And even if the loan is secured – for instance by real estate – getting a good price for the collateral could prove difficult, depending on the circumstances.

Friedman (1957) as well as Modigliani and Brumberg (1954)). In other words, their consumption level would remain more or less steady throughout. In reality, income at certain stages of life does not suffice to cover this hypothetical consumption level. This is true mostly in younger years and in old age. Taking out a loan enables a household to overcome financial bottlenecks in certain phases of life and to make use of their income at a time when they derive the greatest benefit from it. Page 4/16  diversification of investment risk. For society as a whole, it means that accrued savings are made widely available and thus put to better use. Let me give you an example. An entrepreneur is faced with the question of what use to make of his assets. There is no major purchase to be made at the moment. Neither is there a profitable project at his own company in the pipeline. Do you remember our university graduate with her brilliant idea for a product? The entrepreneur could lend her some of his assets against interest and so generate a return. 7 By extending a loan to the young graduate, he is also diversifying his investments. As the proverb has it, he is not putting all his eggs in one basket. Overall, we can conclude that an effective credit system represents an essential basis for a thriving economy. It allows borrowers to put their income to the best-possible use over time.
Philipp M Hildebrand: Monetary policy in a global context Speech by Mr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Swiss-American Chamber of Commerce, Zurich, 8 October 2003. *  *  *  It is a special privilege to be able to give my first formal address as a central banker before the distinguished audience of the Swiss-American chamber of commerce. I have always been very fond of the Swiss-American friendship. It has been an integral part of my family’s life for several decades. More importantly, I am convinced it is an essential ingredient to the long-term vitality of the Swiss economy. Like any friendship, it has had to endure difficult moments. The vibrancy of your association is testimony to the fact that the cultural affinities and common interests between our two countries provide a reliable foundation for extensive and mutually beneficial economic relations. Let us strive to make this foundation as solid as the public service record of the Geneva-born Albert Gallatin, whom Thomas Jefferson appointed as the fourth Secretary of the U.S. Treasury in 1801. To this day, Gallatin remains not only the longest serving Treasury Secretary in the history of the United States but the only Swiss-American to have occupied that most prestigious position in the then newly established capital in Washington D.C. My focus today will be on the long period of global disinflation following Paul Volcker’s paradigmatic shift of monetary policy in the United States.

The increasing scepticism of the 1960s and the 1970s about monetary policy’s ability to fight inflation has given way to confidence that prudent, consistent and forward-looking monetary policy can contain the destructive forces of inflation. Global inflation figures suggest that such confidence is largely justified. In the industrialized world, inflation declined from 12% in 1980 to 1.4% in 2002.2 In the developing world, the decline of inflation has been even more remarkable with yearly rates tumbling from an average of 31 percent in the early 1980s to currently under 6%.3 Along with a significant decline in inflation, volatility of economic growth has fallen everywhere. Both in the U.S. as well as in Germany, the volatility of real GDP, averaged over four quarters, was about 30 percent less during the 1984 to 2002 period than it was between 1960 and 1983.4 The evidence therefore confirms that monetary policy efforts to achieve and maintain price stability promote stability in output and thereby help create economic conditions which are ultimately conducive to employment creation. (see annex for table 1)  2. New Challenges for Monetary Policy  Not unlike successful athletes, central bankers must never be complacent in victory. It would therefore be at best inappropriate and at worst irresponsible for the global central banking community to consider its job done. There will be no “End of Central Banking”. For one thing, there is no guarantee that the elimination of inflation throughout much of the world economy is a permanent achievement.
However, in the medium run, the challenge of climate change may lead to a significant improvement in technological progress, which will lead a minima to reduce energy consumption and carbon dioxide emissions for a given level of output but could also stimulate productivity growth. This inflationary impact highlighted before would then be offset both by downward pressures on energy prices and by productivity acceleration. *  * *  As we can see from this rapid review of risks factors to inflation in the short to the long run, there is a clear upward bias to risks regarding inflation, which has to be taken into account by economic policy. BIS Review 32/2008  3  It is thus all the more necessary to insure a proper degree of competition on product markets and a well-functioning price system, inducing changes in consumption or production patterns according to the relative scarcity of products. There are large margins of improvement with respect to product market competition both in emerging and advanced countries. In the euro area, the fulfilment of the Lisbon agenda objectives could have a significant offsetting impact. Higher employment rates and acceleration in productivity would lead to both less inflation and higher growth. The low current employment rates of the younger and older workers provide a wide acceleration margin for European growth. The potential catching-up of information technology use in the Euro area would lead to a substantial increase in productivity growth. Both evolutions would significantly reduce the inflation content of growth and help contain inflationary pressures.

What, in view of all this, is the appropriate policy response to the current inflation? Most of the overshoot relative to target in the latest CPI numbers – more than all of it, on some measures15 – reflects unusually strong inflation in goods prices. In all likelihood that will also be true of the larger overshoot we’re going to see towards the end of this year. And if this was only a story about global goods prices – and depending how confident you were in its transitory nature – I think the answer could well be “nothing”. There’s a clear parallel with changes in oil prices. In that case the most reasonable assumption is generally that the direct effect on inflation will be gone in a year or so, before monetary policy could do much about it. Subject to any “second-round” effects on wages, the orthodox view is therefore that policy should “look through” the immediate impact. (Note that this applies as much to falls as rises. In early 2015, for example, a big drop in the price of oil pushed headline UK inflation into negative territory, more than two percentage points below target. But, despite a lot of chatter at the time about “deflation”, the MPC did not ease policy because it thought the effect would probably be transitory.) The parallel isn’t exact. Oil only needs to go through a simple refining process before it appears in the local petrol station and the general pass-through to retail energy prices is therefore fairly immediate.