samchain/econo-pairs-v1 huggingface dataset:
This worrying level of inflation is largely the result of both the direct and indirect effects of past surges in energy and food prices at the global level. Moreover, wage growth has been picking up in recent quarters, at a time when labour productivity growth has decelerated, resulting in sharp increases in unit labour costs. Looking ahead, on the basis of current commodity futures prices, the annual HICP inflation rate is likely to remain well above levels consistent with price stability for quite some time, moderating only gradually during the course of 2009. Consistent with this view, the September ECB staff projections foresee average annual HICP inflation at between 3.4% and 3.6% in 2008, and between 2.3% and 2.9% in 2009. The higher inflation projections for 2008 and 2009 mainly reflect higher energy prices and, to a lesser extent, higher food and services prices than assumed previously. In this context, it is important to recall the conditional nature of the ECB staff projections. They are based on a number of assumptions that are of a purely technical nature and unrelated to policy intentions. In particular, the technical assumptions for short-term interest rates reflect market expectations as at mid-August. Moreover, it should be noted that the projections are based on the assumption that oil and non-oil commodity prices, while remaining at elevated levels, will exhibit greater stability over the projection horizon than has been the case in recent months, in line with prevailing futures prices.

Paul Fisher: Confronting the challenges of tomorrow’s world Speech by Mr Paul Fisher, Executive Director for Insurance Supervision of the Bank of England and Deputy Head of the Prudential Regulation Authority (PRA), at the Economist’s Insurance Summit 2015, London, 3 March 2015. *  *  *  Thank you for inviting me to speak to you today. As many of you will know I have been covering as Executive Director of Insurance, in addition to my responsibilities as Deputy Head of the PRA, since August last year whilst a search was made for a permanent appointment. At long last I will be passing the baton over to Sam Woods at Easter. So this is likely to be my final speech made as Insurance Director. I would like to take the opportunity to offer up some personal observations about the current and prospective state of the insurance industry, as well as comment more generally on the role regulation will play in “confronting the challenges of tomorrow”. The insurance sector, by absorbing and laying off risk, plays a fundamental role in fostering a stable economy. A successful industry is therefore key to achieving the Bank of England’s financial and monetary stability objectives. And as society and its economy evolve, it is vital that the insurance sector also responds to that changing environment. Tomorrow’s world inevitably brings change. Some changes can be forecast, or guessed by extrapolating from what we know today. But there are, inevitably, the unknown unknowns which will help shape the future.
Pakorn Malakul na Ayudhya: Central bank independence - what does it mean? The Bank of Thailand’s experience Remarks by Mr Pakorn Malakul na Ayudhya, Deputy Governor of the Bank of Thailand, on the occasion of The Inauguration of the Monetary Policy Committee, Bank of Ghana, Accra, 10 September 2002. *  *  *  Mr. Chairman, Governors, Members of the MPC, Distinguished guests, Ladies and Gentlemen, I consider it a great honour to be invited by the Bank of Ghana to take part in this very important event, the inauguration of the MPC. I would also like to thank Governor Paul Acquah and the Bank of Ghana for the warm hospitality extended to me and my staffs. It has certainly made our first visit to Ghana a very memorable one. Before I begin my talk on the assigned topic of Central Bank Independence: What Does It Mean? The Bank of Thailand's Experience, I would like to offer my congratulations. The first one is for Governor Paul Acquah and the Bank of Ghana for the successful launching of the MPC. The ceremony which took place yesterday was very impressive. The message came across very clearly that the Government places great importance upon the Bank of Ghana's independence and that much reliance is placed on the MPC for its successful conduct of monetary policy so that price stability and consequently sustainable growth can be achieved. The exact words used by your Finance Minister were essential pillar for macroeconomic stability.

It also has advantage over the rate of shorter maturities, such as 1-day or 7-day, in that it will not impose too much burden on the Bank of Thailand in taking care of the liquidity and maintaining the policy rate. Therefore, other repurchase rates such as 1-day or 7-day will be freely determined by market forces. In sum, the 14-day RP rate will leave room for the short-term rate with flexibility to adjust and move in line with money market liquidity conditions. The policy rate was initially set at 1.5 percent per annum and it was raised to 2.5 percent in June 2001 to realign the money market interest rates. Following the global economic slowdown, the policy rate had been cut twice in December 2001 and January 2002 to help stimulate the economy. The rate now stands at 2 percent per annum. Having the policy rate clearly announced, the Bank of Thailand is able to provide a transparent monetary policy signal to the market. This helps provide a framework for a more effective transmission mechanism. After the adjustment in the policy rate, other rates in the repurchase market will adjust in line with the policy rate. Banks will thereafter adjust their portfolio and change their rates for loans and deposits. The transmission mechanism will work itself out such that this will eventually lead to the desirable result in the real sector. The policy impact usually takes up to 8 quarters in the transmission process.
I think this is because banks and regulators came to believe capital was very costly. In particular the Modigliani-Miller (M-M) offset (that equity becomes less risky, and so less expensive, as gearing falls) was ignored. A failure to understand the exact details of the M-M theorem is of course understandable – it is a theoretical result and one which was originally described in an academic article. But it was – and remains – surprising to me that the most basic bit of the story – that if a bank has less debt gearing then the volatility of the returns on its equity will be lower and that this will have an impact on the required rate of return on it – seems to have been largely ignored by many people running banks 4 . Anyone  4  Merton Miller (1995) makes the essential point with typical clarity: “And dearly, if a bank were earning only 8 percent on average on its loan portfolio, financing that portfolio with 12 percent money wouldn't make a lot of sense. But the cost of equity is not a fixed number; it's a function that depends both on the risk of the firm's earning assets and the degree of leverage in the firm's capital structure. The 12 percent figure I quoted is merely one point on that function reflecting the average business risk and average leverage position of American equities.

David Miles: Leverage and monetary policy Speech by Mr David Miles, Member of the Monetary Policy Committee of the Bank of England, at The Economic and Social Research Institute/Foundation for Fiscal Studies (ESRI/FFS) conference, Dublin, 12 October 2010. *  *  *  I would like to thank Jing Yang and Gilberto Marcheggiano for research assistance and to colleagues at the Bank of England for helpful comments. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. You do not need me to stand here in Dublin this morning and tell you what profoundly difficult economic times we are going through. As an elderly New York friend of mine enquired of me recently when I offered such a thought “for such pearls we need economists?” I feebly replied that knowing how much of a mess you were in was of some use and (with rather more confidence) that thinking how you get out of the mess was something economics could help with. Today I want to talk about setting monetary policy as we emerge from one mess and how we can reduce the chances of getting into another one. I am going to focus on the UK but I think much of what I say has relevance here in Ireland and beyond. That it has been a very bad mess is clear.
In my view, the Covid-19 crisis is a reminder of the importance of a high quality regulatory framework; the measures implemented post GFC, including Basel 3, have proven useful in managing the health crisis. The finalization of Basel 3 structurally improves further the overall framework, and therefore, I do not see any benefits in further delays. In addition, this is paramount to avoid market fragmentation across the globe. Therefore, I am firmly convinced that a consistent implementation across jurisdictions of this last set of Basel 3 is in the interest of all stakeholders. This is indeed particularly relevant for the FRTB; the impact of the Covid-19 crisis vividly reminded us of the criticality to reduce the procyclicality of market risk capital requirement in periods of high volatility. 1.2 The need for a reasonable and fair transposition without significant increase in capital requirements Two important red lines have guided us in the negotiation of the final leg of the Basle 3 agreement: First that its implementation doesn’t hamper the capacity of banks to continue providing dynamic lending to the real French and European economies, including SMEs and the housing market Second, that banks can meet the revised capital requirements without dedicated capital issuance or dividend restrictions. The agreement reached in Basle allows for those redlines not to be crossed. We will see if the Commission proposal confirms that.

When the Riksbank alters the repo rate, there is an effect on total demand and ultimately also inflation through various channels within the economy. These channels are the cost of borrowing, incentives to save and wealth, as well as exchange rate fluctuations that affect imported inflation, exports, imports and capital flows. In addition, there is an effect on inflation expectations. It takes some time for an interest rate change to have an effect through these channels. The monetary policy decisions must therefore be based on an assessment of future inflation. Flexibility thanks to credibility Conducting monetary policy is not the same as flying a familiar, well-tuned aircraft. The repo rate is unfortunately a blunt instrument with regard to steering inflation, even a couple of years ahead. What monetary policy can do is to ensure an inflation rate that is over a number of years in line with the target and to contribute to reducing fluctuations in the real and financial economy. When the inflation target was announced in January 1993, the Riksbank formulated a tolerance interval around the target of ± 1 percentage point. The purpose of this was to explain that it is not within the power of monetary policy to exactly meet the target all of the time. In addition, the tolerance interval provides scope for temporary deviations from the target which may be justified by taking growth and employment into consideration.
The FOMC also announced last week that starting June 1st, it will begin reducing the size of its holdings of U.S. Treasury securities and agency debt and agency mortgagebacked securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet.2 The reduction of the balance sheet will play out over the next few years, eventually bringing the Federal Reserve's securities holdings to a level consistent with the ample reserves framework that the FOMC reaffirmed in January when it released its principles for balance sheet reduction.3  Economic Outlook Even before it took these actions, the FOMC communicated a path of raising the target federal funds rate and reducing the balance sheet. Those communications and subsequent actions are having a meaningful effect on broad financial conditions. For example, since the beginning of the year, both two-year Treasury yields and 30-year fixed mortgage rates have risen more than 2 percentage points. We have seen a significant tightening of financial conditions abroad as well. Our monetary policy actions will cool the demand side of the equation. I also expect that over time, the factors contributing to supply shortages will be resolved, so that some of the rebalancing will be accomplished through increases in supply, both in the United States and around the world. For 2022, I expect core PCE inflation to be nearly 4 percent, before falling to about 2 ½ percent next year. I expect inflation to further decline to close to our 2 percent longer-run goal in 2024.

This will also turn down the heat in the labor market, reducing the imbalance between job openings and available labor supply. 2/4  BIS - Central bankers' speeches  While the Federal Reserve on its own cannot address the global nature of inflation, we are not acting alone. Many other central banks are also taking steps to curb inflation. Taken together, these actions should help restore balance to supply and demand globally. That, in turn, should help diminish supply-chain bottlenecks and reduce inflationary pressures. Taking Action In the United States, the FOMC is taking strong actions to restore balance and bring inflation down. So far this year, the FOMC has raised the target range for the federal funds rate by 75 basis points, including a 50-basis-point increase announced after our meeting last week.1 In addition, the FOMC has indicated that it anticipates that ongoing increases in the target range will be appropriate. I expect the FOMC will move expeditiously in bringing the federal funds rate back to more normal levels this year.
The focus of my discussion will be on the latter part of this period. This is because developments in 2000-2001 were illustrated very clearly in last year's assessment. Price rise and monetary policy 2001 The fact that inflation was over the target level during the second half of 2001 and first half of 2002 was largely due to supply shocks similar to those we are experiencing now. Food prices rose considerably as a result of mad cow disease, foot-and-mouth disease and higher prices for fruit and vegetables resulting from poor harvests. There was also a rise in electricity prices. The Riksbank's  BIS Review 15/2003  3  assessment was then, as it is now, that these price rises were essentially temporary and inflation would soon fall again. This proved to be the case and in this sense the upturn in inflation 2001 did not comprise a serious monetary policy problem. However, the inflation rate rose even after adjustments were made for food and energy prices; there appears to have been a rising trend in various measures of underlying inflation from early 1999 to early 2002. It has since been shown that the Riksbank and other forecasters overestimated GDP growth and underestimated inflation when we made our forecasts for 2002 during 2000 and 2001. Perhaps we were a little too optimistic with regard to the economy's capacity to grow without inflation accelerating.

A century ago, depositors could lose confidence in the banks and rush to withdraw their savings. However, deposits stabilised when guarantee schemes were established in the 1930s. Loans to households make up a third of banks’ assets. Residential mortgage loans are longterm loans. At the same time, funding for Norwegian banks has changed. Market funding has assumed a more important role. In recent years, both short-term market funding and funding  BIS Review 8/2010  1  in foreign currency have grown in Norwegian banks. Banks have increasingly transformed short-term deposits from international money markets into long-term domestic lending. This is the main reason for the strain on liquidity experienced by Norwegian banks when foreign funding came to a halt in 2008. For Norwegian banks, the financial crisis has primarily been a liquidity crisis and not a solvency crisis. The authorities all over the world are currently reviewing the regulation of banks’ liquidity. The Basel Committee on Banking Supervision presented recommendations on quantitative liquidity requirements in December 2009. The UK, Switzerland and New Zealand have introduced, or are in the process of introducing, stricter rules. Norwegian banks must also expect the regulation of liquidity to be more stringent in the future. It will be more difficult to base housing finance on short-term funding. Issuing covered bonds may be an alternative.
Norges Bank’s main functions The current Norges Bank Act establishes that Norges Bank is Norway’s central bank and describes the Bank’s functions and its role as executive and advisory body for monetary, credit and foreign exchange policy. The functions described are in line with the customary functions of a central bank and follow from the Bank’s key role in financial markets. But there is little in the current Act to indicate which long-term objectives the Bank should pursue. The Commission wants to change this. The Commission proposes the introduction of an objects clause that clearly defines the Bank’s purpose. Norges Bank supports this proposal. At the same time, the Bank would emphasise that the interpretation of the objects clause must reflect the central bank’s different degree of influence over the various objectives. The central bank’s toolbox is limited, and for some objectives, the instruments available to other institutions may be more important for the result. Chart: Section 1-2 Norges Bank’s purpose – the Commission’s proposal The proposed objects clause contains two paragraphs. The first paragraph reads: “the purpose of Norges Bank is to maintain monetary stability and promote the stability of the financial system and an efficient and secure payment system”, while the second paragraph reads: “the Bank shall otherwise contribute to high and stable output and employment”. A well-functioning monetary system is a fundamental prerequisite for the efficient functioning of an economy. Norges Bank plays a key role in this context.

These countries have sought a return on their financial capital abroad by investing, for instance, in US treasuries. The increased demand for US treasury bonds has for a long time been pushing down long-term interest rates in the United States. In addition, the US central bank conducted expansionary monetary policy in connection with the recession at the beginning of the 2000s and in the years immediately following. The low interest rates have stimulated consumption and investment in the United States. They contributed in particular to house prices rising more quickly than household incomes. The rising stock market and house prices contributed to a reduction in household saving, which largely explains the rising current account deficit until the housing market bubble burst. However, the problems of a previously overheated housing market are not limited to the United States, they can also be found in a number of other countries. New forms of borrowing, including subprime loans, contributed to overheating in the US housing market During the years 2004 and 2005 new loan forms became increasingly common in the housing market in the United States, not least subprime loans. Subprime loans are loans aimed at households with low incomes. Often the lenders used very low interest rates during the first two years of the loan as an enticement. However, after this period the interest rates rose substantially. It is likely that the credit assessment of the households was not too comprehensive.
The Riksbank has also contributed to the stability by being involved in establishing a credible regime with a low inflation rate. We have also endeavoured to make our monetary policy open and provide clear signals, with the aim of reducing unnecessary fluctuations on the market. At the same time, it is important to remember that the increasingly improved central government finances are essentially a very good development from a national economy point of view. Not even this market, which has made a good living from central government financial problems, should be concerned over this. The falling volumes of treasury papers entail new opportunities for other borrowers. "Crowding out" will now be replaced by "crowding in". This should open the way for increased corporate financing with bonds, an area where we have a good tradition. Furthermore, an increase in construction should create a greater financing need. It should also be possible to expand the part of the fixed income market that is aimed at households. The fact that the share market does not merely rain blessings has been made quite clear from developments over the past year. A clear and practical system for bonds aimed at households could be one good alternative to both shareholding and interest funds. 2  BIS Review 37/2001  It is scarcely surprising that the Swedish market is markedly different from, for instance, the Treasury market in the USA or the Bund market in Europe. The number of players is much smaller, while the depth of the market is less.

There are three ways we can achieve this: The first is by enhancing offshore RMB liquidity. As mentioned earlier, the HKMA’s currency swap agreement with the People’s Bank of China was enhanced in July. Apart from the overall increase in the size and removal of the need for renewal of the swap agreement, on the back of this, the HKMA enhanced its RMB Liquidity Facility, and the important changes include: Expansion of both intraday and overnight repos from RMB10 billion to RMB20 billion each, providing an additional RMB20 billion in liquidity to the market; Extension of the overnight repo operating hours from 6 pm to 5 am the next day (when the RMB RTGS system closes), making operation more flexible and streamlined, especially for those in other time zones; and Reduction of repo rates of the overnight repo, with the spread over CNH HIBOR lowered from 50 to 25 basis points. We will constantly monitor the need for further enhancements to keep RMB liquidity in Hong Kong at the optimal level. The second approach is to facilitate the development of more diverse offshore RMB products. The expansion and enhancement of the Connect schemes to promote the cross-boundary use of the RMB and facilitate further portfolio flows into and out of the Mainland is crucial. Southbound Trading under Bond Connect and Wealth Management Connect have created new opportunities for investors and increased the usage of the RMB in capital markets and wealth management. We will consider enhancements to Southbound Bond Connect to enrich Hong Kong’s bond market.