samchain/econo-pairs-v1 huggingface dataset:
When we make forecasts for variables such as output and inflation, we must at the same time have formed an opinion of the future interest rate path. Interest rate developments, in turn, must be considered in the context of other forecasts. The choice of interest rate path in forecasting is important because monetary policy influences developments in the economy primarily through expectations. I will come back to this later on in my speech. First I will focus on the role of the interest rate in Norges Bank’s projections. I will then move on to describe the analytical tools used by the Bank to arrive at a projection for future interest rates. Finally, I will discuss the uncertainty inherent in the projections. Choice of interest rate assumptions in forecasting Norges Bank seeks to achieve an interest rate path that provides a reasonable balance between the objective of bringing inflation up to target and the objective of stabilising developments in output and employment. This means we have to judge how these variables will develop in the period ahead and how they are affected by the interest rate. Hence, in order to make forecasts for inflation and output, we must also judge how interest rates will develop in the future. The interest rate can be approached in various ways in forecasting.

The first is the negative interest rate, which is currently –0.75%. This is charged on sight deposits held at the SNB by banks and other financial market participants. The second is our willingness to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Our monetary policy is thus expansionary and aimed at easing pressure on the Swiss franc, thereby ensuring price stability in the medium term. Many feared a recession on the back of the discontinuation of the minimum exchange rate and the rapid appreciation of the Swiss franc. Yet our economy grew by 0.9% last year. This may not be a strong growth rate, but it is still a good sign. On the one hand, it reflects the flexibility and adaptability of Swiss companies and employees. On the other, the economy was also supported by our expansionary monetary policy. This contributed to the weakening of the Swiss franc over the course of the past year. It remains significantly overvalued, however. The slight increase in economic output in Switzerland is a positive development, particularly in view of the continued tentative recovery of the global economy. This hesitant recovery was accompanied by a collapse in commodity prices in 2015, in which both weak demand and increased oil production played a role. The drop in oil prices and the appreciation of the franc following the discontinuation of the minimum exchange rate pushed inflation in Switzerland into negative territory. Both factors produce a one-off downward adjustment in prices.
There is a deep hunger internationally for Chinese consumers, Chinese exports, Chinese assets and of course, the Chinese currency. While the USD was at one time supported by its gold backing, the RMB today is backed by China’s huge foreign exchange reserves. Confidence in the currency is further enhanced by expectations of conditions in China remaining supportive of a strong currency. The main precondition on which China does not do well is in the stage of development and readiness of its financial system and policy frameworks. These challenges are not insurmountable but they are big enough to make Chinese policymakers adopt a gradual and sequenced approach to RMB internationalisation. They are big enough that premature liberalisation could create significant risks to macroeconomic and financial stability. The challenge for Chinese policymakers is to develop the domestic financial system to a level where integration with the global financial system would not lead to significant vulnerabilities. Therefore, the state of the financial system will be a key determinant of the extent to which policymakers are willing to liberalise and open their system, and consequently, will also be a key determinant of the extent and pace of RMB  2  BIS central bankers’ speeches  internationalisation. The global status of the RMB is closely linked to the global status of the Chinese financial system. Ambitious reforms could expedite RMB internationalisation. On the issue of being a global exporter of capital, China is certainly that.

Jean-Pierre Danthine: Situation at Swiss banks from a financial stability perspective Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 19 June 2014. *  *  *  As my colleague Thomas Jordan has explained, economic and financial conditions continue to be challenging. Against this background, I would like to examine the situation at Swiss banks from a financial stability perspective, looking first at the big banks and then moving on to a discussion of domestically focused banks. Big banks: strengthening resilience Over the past year, the Swiss big banks have further improved their capital situation. In terms of loss-absorbing capital – defined as Common Equity Tier 1 capital plus high-trigger contingent capital instruments – their risk-weighted capital ratio either already exceeds or is close to the 13% requirement that will apply from 2019. They also meet or are very close to meeting the corresponding leverage ratio requirement of 3.1%. In terms of total capital, both big banks have also substantially improved their ratios. However, they have yet to meet the corresponding requirements applicable from 2019.1 The SNB welcomes the significant progress made by the big banks in improving their capital situation and their compliance with some of the requirements applicable from 2019. The SNB recommends that they continue to improve their resilience and, in particular, their leverage ratios. This is important for two reasons.
In this paper, I attempt to examine the interrelationships between environmental growth and sustainable economic growth from the African perspective. The paper is organised as follows; section 2 examines the current economic disposition of Africa, and attempts to determine its relationship with environmental developments. Prominence is given to the components that affect environmental sustainability, namely (i) pollution and (ii) degradation. The latter will prove to present a relatively high risk to environmental sustainability in Africa. Section 3 presents a further analysis on the effects of the environment on economic growth, and that of economic growth on the environment. Section 4 tackles issues of Africa in the world economy and its environmental prospects. Section 5 provides current solutions aimed at mitigating and/ or reducing the various negative externalities related to environmental pollution and degradation such as national, regional, and international environmental management policies. Recommendations that are considered necessary to foster environmental friendly economic development are also given as input for further improvements in environmental management in Africa. 2. Economic disposition of Africa  With an estimated total population of 835,479 thousand people representing 13% of the world’s estimated 6,395, 557 thousand people,1 and spanning the 53 countries of Africa, the continent faces numerous challenges predominantly on the economic, social, and political fronts. Despite these difficulties, Africa recorded a growth rate of 3.6% in 2003, an increase from 2.7% recorded in 2002. The increasing trend in economic growth is expected to continue into 2004 [African Development Bank (AfDB), 2003].

Challenges for Monetary Policy in the current IMFS Figure 1: The US dollar continues to be as important today as it was during the Bretton Woods era  Chart 1: Trade war is the top tail risk affecting global investors July 2019 June 2019 March 2019  Trade war Monetary policy impotence China slowdown Bond market bubble A credit event Iran Populist policies US politics Market structure Equity market bubble European elections Brexit 0  10  20 30 40 Percentage of respondents  50  60  Sources: Bank of America Merrill Lynch Global Fund Manager Survey. 17  All speeches are available online at www.bankofengland.co.uk/news/speeches  17  Chart 2: Global economic policy uncertainty has reached record highs Index 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25 2019  US implements first China-specific tariffs Paris attacks  Iraq invasion 9/11 Madrid bombings  USS Cole bombings  1997  1999  London bombings  2001  2003  Ukraine / ISIS  Transatlantic aircraft plot  2005  2007  2009  2011  2013  2015  2017  Source: Baker, S, Bloom, N and Davis, S (2015), ‘Measuring economic policy uncertainty’, NBER Working Paper No. 21633. II.
Zamani Abdul Ghani: Riding out of the global financial crisis – banking reforms and revival Closing remarks by Mr Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at the 13th Malaysian Banking Summit 2009 "Riding Out of the Global Financial Crisis – Banking Reforms & Revival", Kuala Lumpur, 12 May 2009. *  *  *  On behalf of Bank Negara Malaysia , I would like to thank ASLI for the opportunity to make the closing address for the 13 th Malaysian Banking Summit. Indeed the theme chosen is highly appropriate and timely as we are currently facing a period that is most challenging. The current global economic slowdown, as many are aware, has been compared to the Great Depression of the late 1920s. It began with the stock market crash in October 1929, otherwise known as “Black Tuesday”. As to whether the current global slowdown reach such proportions, it remains anyone's guess. But as events unfold and with lessons of hindsight gaining clarity, we have seen how institutions failed to fully understand or underestimated the complexity of products, and were unable to adequately measure tail risks as well, the procyclical impact of fair value accounting. While these may have merits in sharing the blame, others like the high levels of risk concentration and gearing together with the failure to manage maturity mismatches, are also equally apparent, if not fundamental, in contributing to the financial crisis. Comforting, however, is that none of our Malaysian institutions undertook complex derivative transactions.

This reflects the growing relevance of Islamic banking and is testimony to its acceptance as the embodiment of ethical banking and finance. Other threats to the financial system Financial institutions also face increasing challenges from other non-financial risks associated with the extensive use of technology and the potential outbreak of epidemics. Therefore it is vital then that the state of preparedness of BCP/BCM contingency measures is constantly ready to address any possibilities and not be blind sided by financial risks alone. Closing It is neither by accident nor coincidence that the Malaysian financial system is currently at a position of considerable strength, depth and resilience. Rather it is through the combined efforts of both industry players and the regulator as well as the support of all our  2  BIS Review 58/2009  stakeholders. I believe that this spirit of cooperation and mutual respect is entrenched and will serve us once again as we look forward to safely ride out the impact of the current global financial crisis. BIS Review 58/2009  3
Norges Bank has therefore devoted considerable resources to developing a suite of models for analysing this interaction. Somewhat simplified, the interplay can be illustrated by developments during the previous banking crisis in the early 1990s in Norway. Households had accumulated excessive debt at that time. They had to tighten spending in order to reduce debt. They increased their financial saving markedly and reduced spending on consumption and housing investment correspondingly. This resulted in a sharp fall in earnings among companies that provided goods and services to households. Banks sustained substantial losses on their loans to these companies. Bankruptcies and lower activity resulted in lower household income and further spillovers to the economy. Such interaction effects are important in explaining that financial crises tend to follow in the wake of imbalances in the property market. It is difficult to determine with certainty when asset prices exceed levels that are not sustainable over time. Nevertheless, a long period of debt-financed increases in house prices seems to be a potent signal of a build-up of risk in the financial system, a signal that should be taken seriously. If we can restrain the build-up of such imbalances, we also reduce the risk of financial instability. The question can be raised as to whether the interest rate should be used to a further extent in preventing the build-up of systemic risk. Higher interest rates can curb the rise in both debt  BIS central bankers’ speeches  3  and house prices during an economic upturn.

Our current approach to ensure firms are able to continue to operate core functions in a major operational disruption involves ensuring that firms have primary and secondary sites at a safe distance from each other and the capacity to switch operations between the two without any extended interruption in activity. But with cyber such common systems environments between primary and secondary sites and mirroring of data between the two could, in the event of a successful attack, result in a complete loss of systems, disrupting a firm’s capacity to operate and leaving the timeframe and route to recovery uncertain. Unlike most other forms of operational disruption, we know too with cyber that this is not a game against nature. There are groups out there that are motivated to attack the sector. For most, the motivation is economic; that accounts for the rise in fraud. But there are actors out there, sometimes state-sponsored, who may be motivated to bring systems down and cause harm to the sector. Their capabilities vary, but it is in the nature of cyber that attack types are constantly evolving and readily scalable. And the threat is international. Attacks can originate anywhere around the globe. This all implies a different disposition for cyber defence. We should not expect to build an impermeable perimeter that, through technology design, will withstand attack. Rather we should expect the cyber threat to be ever-present, ever-evolving and networks to be penetrated. The capability to identify where this has occurred and to respond is key.
3 Sometimes it can be much higher than 2 percent. Presumably, this was the case during the late 1990s as rapid technological change lifted productivity growth. Sometimes it can be well below 2 percent. For example, when credit availability dried up during the financial crisis in late 2008, this drove down the equilibrium real rate far below 2 percent. More recently, the slow growth rate of the economy and the low rate of inflation are evidence that the equilibrium real short-term rate today is well below the 2 percent rate assumed in the Taylor Rule. If 2 percent really was consistent with a neutral monetary policy, then the very low real rates of recent years – buttressed by our large-scale asset purchases – should have been extraordinarily accommodative. As a result, we should have grown much faster than the 2½ percent pace evident over the past couple of years and seen an inflation rate much higher than what we experienced. This conclusion is supported by a number of more formal models. For example, the Laubach-Williams model currently estimates that the equilibrium real short-term rate is around zero percent. 4 Third, the Taylor Rule – and more broadly, any prescriptive rule for the systematic quantitative adjustment of the policy rate to changes in intermediate policy inputs such as real GDP or inflation – is incomplete because it does not fully account for factors that are crucial to how monetary policy impulses are transmitted to the real economy.

Second, the Rule has the desirable feature that when economic shocks push the economy away from the central bank’s objectives, the Taylor Rule prescribes a policy response that can help push the economy back toward the central bank’s goals. Third, a number of studies have shown that Taylor Rules are robust in the sense that they generally perform quite well across a range of different assumptions about how the economy is structured and operates. Despite these attractive features, I don’t believe that any prescriptive rule, including the Taylor Rule, can take the place of a monetary policy framework that incorporates the FOMC’s collective assessment of the large number of factors that impact the economic outlook. 1  Jonathan McCarthy, Paolo Pesenti, Argia Sbordone and Joseph Tracy assisted in preparing these remarks. BIS central bankers’ speeches  1  As I see it, the Taylor Rule has several significant shortcomings that can be detrimental to the attainment of the Federal Reserve’s mandated objectives. These shortcomings are not just theoretical; they have been very relevant to monetary policy in recent years. First, the Taylor Rule is not forward-looking. Its policy prescription is based on the current size of the output gap and the deviation of current inflation from the Fed’s objective, not on how these variables are likely to evolve in the future.
And although the downward pressure on inflation from movements in energy prices and the exchange rate are proving persistent, they will not have a permanent effect on inflation. But, there is residual uncertainty about the relationship between the real economy and inflation – something economists refer to as “model uncertainty” – which in this instance augurs for caution in setting monetary policy. 4 The most likely outcome is that wage growth will soon resume its recovery, but there are alternative states of the world in which it takes longer for that to happen. So I judge it prudent to tread carefully, and refrain from voting for an increase in Bank Rate until I am convinced that wage growth will be sustained at a level consistent with inflation returning to target. 4  The effect of uncertainty in the setting of monetary policy is much discussed. Brainard (1967) shows that when policymakers are uncertain about the effects of their actions on the economy, it is appropriate to move more cautiously than if the impact of policy is certain – a strategy known as gradualism. Data uncertainty is another reason why policymakers may adopt a gradualist approach. One common finding is that when data are noisier, a less aggressive response is desirable (Rudebusch, 2001; Orphanides, 2003). In addition, more recently, Evans et al (2015) have argued for delaying lift-off in the face of uncertainty about the strength of the recovery, given a view that there are asymmetric costs associated with the zero lower bound.

9  For example, in his 2009 letter to the Chancellor requesting the MPC be able to use the Asset Purchase Facility for monetary policy purposes, the then Governor, Mervyn King said “At some future date, I would expect that the MPC would wish to exit from the strategy of buying assets and would wish to reduce the amount of assets held under the Asset Purchase Facility.”  10  See for example Alesina and Summers (1993), Klomp and De Haan (2009) and King (2013). BIS central bankers’ speeches  5  Conclusion Let me sum up. We are still learning how the post-crisis economy behaves, and some relationships in the data have proven slow to reassert themselves or may have changed. The recent plateau in wage growth despite the ongoing recovery is one example, and I will wait until I am convinced that wage growth will be sustained at a level consistent with inflation returning to target before voting for an increase in Bank Rate. In this sense, I will proceed with caution. But once I am convinced, absent further shocks, I can see Bank Rate rising more quickly than the path implied by the market curve at the time of the last Inflation Report. That is not to say I don’t understand the shape of the yield curve – market participants must consider all of the possible outcomes when making their decisions, and the yield curve could be weighed down by worries about the world.
However, the banks experienced repeated crises, and in 1913, the Federal Reserve was established to stabilise the private banking system. In the post-war years, the value of western currencies was pegged to gold under the Bretton Woods system: an ounce of gold was worth USD 35. All the other member countries – including Norge – agreed to peg their currencies at a fixed rate to the US dollar. The gold standard was abandoned by President Nixon during the Vietnam War, and the traditional fixed exchange rate system was terminated in 1971. The value of money is no longer linked to precious metals. Today, money is so-called fiat money. The term derives from the Latin “fiat”, meaning “let it become”. In his book Sapiens – A Brief History of Humankind, Yuval Noah Harari writes: “Trust is the raw material from which all types of money are minted”. And he goes on: “..., the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, […]. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.”3 Money has value because – and only because – everyone believes in its value. Money is minted from trust. But how is this possible? How can money retain stable value in a system exclusively based on belief and trust? First, money must be usable.

Even though users do not cover costs directly, the costs involved in using these schemes are high, making these solutions an expensive alternative for banks. Eventually, banks’ customers foot the bill one way or another. Cheaper alternatives are on their way. The new solutions could also result in faster payments. National payment card schemes, such as BankAxept in Norway, might provide an alternative to the international card schemes, including access to the new services. New regulations have been introduced to lower the costs related to international cards. A new EU regulation also provides for direct bank-to-bank payments, bypassing the card schemes entirely. Technological innovation has given us not only new methods of payment, but also new forms of money – so-called e-money. E-money is electronic money issued by non-bank entities, but in existing currencies. Paypal customers can make payments through their Paypal account. Facebook has recently applied for a Europe-wide e-money licence. If large providers offer an attractive, user-friendly solution, this method of payment could become widespread. A key issue related to e-money is the question of consumer trust. E-money is a claim on the issuing company. E-money is not backed by a deposit insurance scheme or any authority. Other companies are offering new forms of money – often in the form of a new currency – on closed platforms such as social networks and online games. Examples of such platform currencies are Amazon Coins, the virtual currency used in the online game World of Warcraft and Chinese Q Coins.