samchain/econo-pairs-v1 huggingface dataset:
For example, should a country facing severe liquidity pressures decide to suspend payments temporarily, then the IMF should be willing to support that decision while remedial policy measures are put in place. This support could take the form of bridging finance – so-called IMF lending-into-arrears. The pre-conditions of lending-into-arrears could be designed to ensure that payments suspensions are handled in an orderly fashion – for example, that they are time-limited and equitable, and the debtor is negotiating in good faith. This would reduce uncertainty on the part of both debtors and creditors as to how the end game would be played out, thereby reducing borrowing costs. These sets of procedures represent evolution in, rather than revolution of, the international financial architecture. They are about ensuring the official sector's own actions are clear, consistent and accountable, so that they contribute effectively to the resolution of financial crises. These procedures are fully consistent with the principles of private sector involvement outlined in the IMFC communiqué last September and more recently by the G7 Finance Ministers last month. The framework set out here is an attempt to begin to add some operational colour to those overarching principles. To sum up, both borrowing countries and private sector creditors must expect that, except in exceptional cases of systemic concern, the limits on official finance means that they and they alone will be responsible for dealing with a resolution of problems concerning debt repayment. Standstills and debt restructuring will be only one of many options open to negotiation between debtors and creditors.

But even on foreign currency borrowing, a country may find that the spread of the interest rate at which it can borrow over the interest rate charged to "safe" countries, such as the United States, can reach extremely high levels. And where that interest rate is markedly higher than the growth rate of the economy, the debt burden rapidly becomes unsustainable unless the interest rate can be brought down quickly. Before the Russian default and devaluation of 1998, the average spread on emerging market sovereign debt was around 500 basis points, in itself a sizeable addition to the burden of borrowing in international capital markets. That spread then rose sharply to levels of between 1000 and 1500 basis points. At these levels debt burdens were clearly unsustainable. Since then, macroeconomic reform in many of the affected countries, with the help and support of the IMF, has reduced average spreads to a range of between 600 and 800 basis points, although there has been a further rise recently following the difficulties in Turkey and Argentina. Emerging market spreads are currently around 900 basis points over interest rates on US Treasury bonds. It is not easy to reconcile spreads at this level with the fact that sovereign debt defaults on bonds are running at historically low levels. In part, the low level of defaults may reflect the increase in the number of exceptionally large loans made by the IMF in recent years. So what does account for the high level of emerging market spreads?
Light inflation targeting in Romania  Drawing the line after more than a decade of inflation targeting, I would say that we have managed to deliver steady disinflation and anchor expectations, even though the frequent occurrence of exogenous shocks led to high volatility in inflation and the occasional missing of annual targets. All central banks are familiar with supply-side shocks related to a surge or fall in commodity prices, but in Romania we have also had to deal with large (and not necessarily predictable) adjustments in administered prices and frequent changes in indirect taxation. Some of the latter were inherent to EU membership (i.e. alignment of some excise  BIS central bankers’ speeches  1  duties), but others were related to an erratic tax legislation. In such an environment, two features of the inflation targeting framework as implemented in Romania appear as particularly relevant: •  First, the focus on the medium-term achievement of the inflation objective, rather than hitting the target all the time. This approach allows for sustainable price stability without incurring the cost of excessive volatility in output and employment. •  Second, the ex-ante definition of a set of escape clauses that limit the central bank’s responsibility in attaining the annual target:  3. 1. Marked increases/decreases in commodity prices  2. Natural disasters and other similar exceptional events that induce cost-push or demand-pull inflationary effects  3.

This level of growth is expected to exceed the growth potential output, giving rise to a positive output gap, particularly in 2015. Other things being equal, this will contribute to higher inflation. GDP growth in 2014–2016 will be driven by domestic demand, both private consumption and investment, and the contribution from net trade will be negative for the entire period. As a consequence, the sizeable current account surplus we have seen in 2013 and 2014 will shrink rapidly next year and give way to a small deficit by 2016. This is cause for concern in and of itself, and we hope that this forecast will not materialise, as Iceland needs to maintain a current account surplus in the next several years as it focuses on putting its external debt onto a more solid footing and building up FX-reserves that are not financed with foreign loans. Economic policy and economic incentives would then have to centre on improving the outlook for the current account balance. According to the forecast, which extends until end-2017, inflation will be at target for the entire forecast horizon, apart for the last quarter of 2015 and the first quarter of 2016. It will average 2.6% for the three-year period from 2014 through 2017, which is well in line with the 2½% inflation target. But the current equilibrium is fragile, the future is highly uncertain, and there are important known risks ranging from the global economy to the liberalisation of Iceland’s capital controls. We will doubtless discuss some of these at this meeting.
We also stated that, in view of the economic situation and outlook, the current interest rate level appeared broadly appropriate for the next several months. In other words, significant new developments would be required for the MPC to raise interest rates – or lower them – at upcoming rate-setting meetings. I notice that the bond market seems to have realised the implications of this, as yields at the longer end of the market have not risen since the last interest rate announcement. But looking further ahead, it should be clear to everyone that if GDP growth forecasts materialise in coming  BIS central bankers’ speeches  3  years and the slack in the economy disappears, the monetary slack manifested in a negative real policy rate of over 1% must be removed over time. So where do we stand with respect to the monetary policy stance? Is monetary policy lax or tight? Chart 3 shows the Central Bank’s real interest rate measured by the effective policy rate and twelve-month inflation. The chart shows that, in spite of two recent rate hikes, the real interest rate will be lower in Q4/2011 (assuming unchanged interest rates in December) than at any time since the financial crisis struck, with the exception of Q1/2009, when inflation soared up above 18% and a dramatic disinflation episode was in the offing. Chart 3  Chart 4  But what about the Taylor rule, shown in Chart 4? There is a significant deviation at the moment – one that perhaps requires some explanation.

With the sustained budget surplus and accumulated surplus on the Exchange Fund and Land Fund assets, the actual amount of foreign reserves in Hong Kong amounted to $ billion at the end of September, the third largest in the world. This is more than seven times Hong Kong dollar cash in circulation or over three times $ M1. 30. The currency board system has an automatic adjustment mechanism to maintain exchange rate stability. When there are outflows of funds from the Hong Kong dollar, the Hong Kong Monetary Authority (HKMA) will sell US dollars to banks for Hong Kong dollar. On settlement day, the HKMA will debit the clearing accounts of the banks for the necessary amounts of Hong Kong dollars in return for the US dollar that will be credited to the New York accounts of the same banks. Since banks may have sold more Hong Kong dollars than they have in their clearing accounts with the HKMA, they can only obtain Hong Kong dollars by borrowing from other banks, by bidding up the interbank rates, or selling back the US dollars to the HKMA, that is, by reversing their short position. In fact, the banks do not hold excess Hong Kong dollars because they are generally long in foreign currency. The latest data at the end of July shows that the Hong Kong banking system is short roughly $ billion or $ billion. 31.
Some countries have opted for various forms of capital control, although their effectiveness needs to be evaluated based on the objective of imposing them at the first place. Some studies find that capital controls have some compositional effect and could alter the maturity of new investments. So far as reducing the volume of flows, the empirical evidence is inconclusive. Unless the authorities have full control over capital accounts, partial restrictions are unlikely to offset the impact of flows, prevent appreciation of local currency and provide more space for independent monetary policy. In principle, flow of capital from advance economies to emerging ones and appreciation of the currencies of the latter over time is a mutually beneficial secular trend, as long as it is supported by strong fundamentals, better growth prospects, and high productivity differentials. Rather than fighting against this trend through over restrictive capital controls or excessive reserve accumulation, there is strong legitimacy in using macro-prudential policies to mitigate the adverse effects of volatility in capital flows, especially those with speculative nature, over financial stability. Several emerging economies have started implementing such measures to limit the credit growth and asset price bubbles. These measures include raising reserve requirement ratios, requiring higher income- and deposit-to-loan ratios, tightening capital adequacy requirements and liquidity ratios, introducing transaction taxes, fees etc.

Conclusion The recent crisis put front and center the rising economic power of emerging countries. It has also demonstrated the vulnerabilities within the global system, especially across financial markets. Financial stability becomes a major concern for policy makers, which has the potential to reshape the monetary policy framework of central banks. Significant steps have been undertaken, but significant progress is still needed to tackle global imbalances. That involves not only revisiting economic policies, but also economic and institutional infrastructure that shapes them. As the quest for a new global order continues both in theoretical and practical levels; the predictability, balance and sustainability of the new global order will depend on the cooperative and coordinated efforts to establish a well-represented infrastructure. Thank you for your attention. BIS central bankers’ speeches  5
After a prolonged period of growth, this segment had reached a size which, given the evolving demand for banking services, entailed a clear excess of capacity. From an individual standpoint, the prolongation of the crisis affected the capacity of institutions to generate profits for the following reasons: an increase in non-earning assets (doubtful loans and repossessed real estate assets), the narrowing of margins due to a fall in income associated with rising non-earning assets and to a higher cost of funds, the decrease in business volume, etc. Moreover, the high growth of previous years, due particularly to increased business with the real estate sector, had raised the dependence on wholesale debt markets, exposing savings banks to the liquidity risk associated with adverse developments in those markets. Compounding this is the intrinsic limitation of savings banks when it comes to raising core capital, a limitation which is important because the trend in both the markets and the prudential financial regulation currently under international revision is clearly towards stepping up requirements in this area. Given the need to downsize this sector and the conviction that the productive structure of many credit institutions had to be rationalised to hold efficiency at adequate levels in a sector characterised by growing competition, the time was ripe for the creation of the FROB, under whose auspices many savings banks have arranged their mergers or institutional protection systems (hereafter referred to by the Spanish acronym “SIP”).

Accordingly, strict compliance with the target must be ensured, both through special budgetary monitoring and surveillance procedures and through additional measures that should be applied if deviations from the target are detected. Naturally, to be in a position to react promptly and effectively, the measures most suited to the objectives set and which least interfere with a return to sustained growth must be designed in advance. Given the high decentralisation of public spending in Spain, the regional and local governments’ participation in this austerity drive and their commitment to attaining budgetary targets are vital. And I must say that the measures announced so far by most of these tiers of government do little to respond to the radical reduction in unproductive public spending that our economy needs. As I said earlier, the recently approved fiscal adjustment measures were urgent, since they were vital to curb a situation of extremely high instability that might have had disastrous  2  BIS Review 92/2010  consequences. But there are other measures which, without having the same degree of urgency, are nonetheless more important, since their goal is to ensure medium- and long-term budgetary stability. Clearly, I am referring to the measures to reform our pension system. At an earlier date, the government tabled some proposals in the updated Stability Programme and, on this basis, the Toledo Pact Commission will set about work in the coming weeks. I do not wish to go into details here on the possible avenues of reform.
One can summarise this by saying that we need to better understand, clarify and explain the effects of new monetary policy tools. We are far from alone when it comes to this challenge. The Bank of England recently had to relate to an investigation that emphasised that these elements needed to be developed with regard to QE programmes. 31 We are working continuously on developing our analyses and communication of monetary policy. As I mentioned earlier, I think that the proposal for a new Sveriges Riksbank Act is good in several aspects. This includes the extended scope for the political system to examine our activities. Information, scrutiny and evaluation are central conditions for our strong independence. The world has changed a lot since 1668, but the Riksbank’s monetary policy task has remained a common denominator over the years. If we are to supply a monetary policy with price stability as objective, we need to accept that the conditions change over time and that the tools need to be updated when these changes occur. Independence is a large measure of confidence to hold in trust. Continued freedom with responsibility will enable the Riksbank to contribute to good economic developments going forward. Thank you for listening! 30  See, for instance, Melander (2021) and Di Casola (2021). 31 See Bank of England (2021). 12 [20]  References Alesina, A. and L.H. Summers (1993), “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking.

Durmuş Yilmaz: Economic governance – the Turkish case Opening remarks by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the Conference on Current Issues in Economic Governance, Ankara, 3 April 2007. *  *  *  Ministers, academicians, bureaucrats, guests, It is an honour for me to address a distinguished audience on such an important issue. The conference will do much service by bringing forward the issue of “economic governance”, which we as the Central Bank have emphasized at numerous occasions. Let me thank Bilkent University for creating such a productive environment. Today, I would like to devote some time to highlighting the importance of principles of good governance in general and economic governance in particular. In the context of economic governance, I would also like to mention some issues on how to create good institutions. Then, I will proceed with the Turkish case and the Central Bank of Turkey. But first of all, I will start by outlining the basic definitions of the concepts I am going to use. Although the concept of governance is not new at all, in recent years it has started to be widely used in economics, especially in the development literature. While governance, or rather good governance, has been introduced as an effective tool to harness globalisation, it is not easy to define in one sentence because of its many interacting elements.
The National University of Singapore Corporate Governance and Financial Reporting Centre, as well as the Singapore Management University Sim Kee Boon Institute for Financial Economics both publish useful indices that assess the standards of corporate governance in Singapore. Professional associations such as ICPAS, IIA, SAICSA and SID have also been playing their roles in this area. Conclusion In closing, let me reiterate the point that good corporate governance pays – if not in immediate share prices, at least in the resilience of the firm in a crisis. Indeed, one key conclusion from the study by the Senior Supervisors Group3[3] is that financial firms that best rode out the recent crisis were ones with good corporate governance standards, demonstrating "a comprehensive approach to viewing firm-wide exposures and risk, sharing  3  William Rutledge et al. (March 2008), "Observations on Risk Management Practices during the Recent Market Turbulence", Senior Supervisors Group. 4  BIS Review 147/2009  quantitative and qualitative information more effectively across the firm and engaging in more effective dialogue across the management team." Better governance per se does not guarantee that there will never be a crisis, but it can minimise its probability and its impact if it does occur. Singapore has made good progress over the years in our corporate governance practices, but we must press on with continual improvements. As regulators, professional bodies, investors, academics and the media, we each have a role – let us work closely together in this journey.

Finally, Asia is diverse – across stages of economic development, and across a variety of climate related risks and transition challenges. If we can successfully help Asia transition to net zero, it will go a long way in getting the world to net zero. Third, Collaboration – effective transition finance needs close partnership among the public, private, and people sectors. This will be the focus of our conference – scaling blended finance to accelerate the net-zero transition. Blended finance synergises public and private capital to mobilise financing for projects that are marginally bankable. It is also about combining financing with capacity building, technology transfer, and institutional support, to reduce risk and enhance bankability. In short, it is about taking an ecosystem approach to solving a problem of the global commons. Blended finance is not new but catalysing and scaling it requires a fresh approach. The use of public funds and development guarantees to reduce risks and encourage participation by private capital has been around for many decades. But such programmes are too few and too small. Globally, annual flows of blended finance have averaged less than $ billion since 2015. We need a more systematic and coordinated approach to mainstream blended finance. First, we need to build a pipeline of shovel-ready transition projects. There is insufficient capacity and expertise to prepare projects that are attractive to the private  2/4  BIS - Central bankers' speeches  sector.
Inexpensive goods can still be produced, if capacity expands without generating price pressures. But the demand for oil, steel, minerals, etc., recorded strong increases, which pushed prices up. The supply has not responded to demand with the same vigor. 5  The empirical literature has been critical in this point, but a recent work by Auer and Fischer (2008) shows that the producer price index of the United States was two percentage points less due to cheap imports from developing economies. 4  BIS Review 124/2008  A case worth highlighting is foods. Some of them absorbed the demand increase due to economic growth with supply increases, but then a new source of demand appeared: bio fuels, which have further strained the prices of grains. Another factor that, according to some analysts, has been important in price hikes has been investor involvement, demanding commodities as another asset in their portfolios. But if investors were buying to resell with a margin, this would translate into an increase in inventories, which it has not. Accordingly, the purchases of futures by some agents go hand in hand with the sale of futures by others, and are normally the counterpart of hedging operations. On the other hand, while investors’ positions have risen substantially in the commodities markets, they still share but a small fraction of the market.

(1) Latin America: Brazil, Mexico, Chile, Colombia y Peru. (2) Asia EM: China, India, Indonesia, South Korea, Malaysia, Singapore, Taiwan and Thailand. (3) Europe EM: Czech Republic, Hungary, Poland, Russia andTurkey. (4) G3: US, Euro area and Japan. Source: CEIC Data. BIS Review 124/2008  13  Figure 11 Inflation forecast for 2008 (*) (percentage)  9 8 7 6 5 4 3 2 1 0  G3  Latin America  Emerging Asia Emerging Europe  (*) Geometric average of inflation forecast. For Latin America and Russia, end of the year inflation data. Source: Consensus Forecasts. Figure 12 Inflation forecast for 2009 (*) (percentage)  7 6 5 4 3 2 1 0  G3  Latin America  Emerging Asia  Emerging Europe  (*) Geometric average of inflation forecast. For Latin America and Russia, end of the year inflation data. Source: Consensus Forecasts. 14  BIS Review 124/2008  Figure 13 Monetary policy rates in the world (percentage) 8,75  4,50  8,50  4,25  8,25  4,00  8,00  3,75  7,75  3,50  7,50  3,25  7,25 Jun.07  Sep.07  Dec.07  Mar.08  3,00 Sep.08  Jun.08  Developing (1)  Developed (2)  (1) Average of reference rates for: Brazil, Colombia, Korea, Chile, China, Hungary, India, Israel, Mexico, Peru, Poland, Czech Republic, South Africa and Turkey. (2) Average of reference rates for: Canada, US, Japan, Norway, UK, Switzerland, Sweden, Euro area. Source: Central Bank of Chile and Bloomberg.