samchain/econo-pairs-v1 huggingface dataset:
In China, for example, the share of its exports to the US in terms of the growth of its overall economy has fallen by half (Figure 6). In any case, we must consider that certain automatic stabilizers are at play. For example, the reduction in external demand induces a depreciation of the currency of the economy facing higher tariffs, making its products relatively more competitive. Conversely, in the economy imposing the tariffs, an appreciation of the currency should be observed. Except if this appreciation compensates the increase in tariffs, the higher prices of imported goods would temporarily push inflation up. In the case of the US, this greater pressure of imported costs would be added to the scarce gaps that the economy already presents, which could lead to greater current-account imbalances, higher inflation and additional pressures to speed up the pace of monetary normalization. Special attention deserves the effects on financial markets and asset prices, especially in circumstances where the Fed continues to progress in normalizing its monetary policy. The uncertainty associated with the trade conflict contributes to reducing risk appetite, making capital flow out of emerging economies. So far, this adjustment has been selective and major effects have materialized in only a few vulnerable economies. For an economy with good fundamentals, such as Chile, one possible risk comes from a synchronized adjustment of emerging economies’ asset prices, as it happened in the late 1990s or during the Global Financial Crisis.

These include, among others, the delivery of new statistical products, improved management of the cash cycle, modernization of the technological platform that supports the investment cycle of the International Reserves and the Sovereign Funds, and the incorporation of computer security measures based on high international standards. Particularly noteworthy is the progress we have made in implementing Basel III regulations, mainly in terms of liquidity standards for the banking system and support for the discussion of the new General Banking Act. The latter will pose additional demands, particularly concerning the implementation of regulatory measures and macroprudential policies, such as the countercyclical capital reserve and the charge to systemic banks, for which the CBC has been preparing in recent months, reviewing international experiences and their applicability to Chile. 11  We intend to continue informing the Senate and the general public about the progress of our Strategic Plan and the operational agenda in the coming years. This is an expression of a broader will to increase the transparency of the operation and performance of the CBC, as an essential ground for the confidence in our institution that we wish to maintain and reinforce. Let me stress here that the CBC’s commitment with transparency involves not only compliance with the obligations mandated us by the Constitution and laws but has expanded further by way of agreements adopted by the Board throughout the years.
Our assessment is that growth in 1997 will amount to approximately 2 per cent, followed by 3 per cent in 1998. BIS Review 68/1997  -4-  Inflation in line with the target The path of inflation largely depends on growth in relation to the economy’s long-term potential output - in other words on how the gap between actual and potential output changes - as well as on the inflation expectations of different economic agents. The Riksbank considers that 5 per cent growth in the coming years is compatible with low inflation, mainly because in general the economy has plenty of unutilised capacity. In other words the output gap, which is affected by, for example, the labour market situation, is not expected to close in the coming years. Structural changes and increased competition in several fields suggest that the Swedish economy’s inflation propensity has fallen. Deregulation has been carried out in transport and communications, for instance, and to some extent in the food sector. EU membership has had positive effects for competition in Sweden, partly via increased competition from imports. The new competition laws have also helped to strengthen competition. Changes of this type, as everyone knows, are positive in that they pave the way for lower consumer prices. Another consequence that is less evident and therefore worth underscoring is that, in so far as the changes affect the outlook for inflation, they can provide room for a somewhat less tight monetary stance.

After focusing on the developments in inflation and our policies regarding interest rates and exchange rates, now I would like to talk about the growth of the Turkish economy. As you all know, the Turkish economy has been displaying a high growth performance for the last four years. Since 2001, cumulative real growth has been 35.1 percent, whereas the average annual growth has been 7.8 percent. The point that stands out in the growth figures is that growth is led by the private sector and that the investment-originated base is growing. In the 2001-2005 period, investment expenditures of the private sector increased by 105 percent, while those of the public sector increased by 15.5 percent. On the consumption side, expenditures of the private sector increased by 30.3 percent in the same period, whereas those of the public sector increased by 5.9 percent. These developments indicate that the ongoing strong investment trend enhanced the growth potential and that the dynamics and actors of growth changed parallel to Turkey’s structural change process. Growing with public resources is no longer the case. In this respect, it is clear today that the public sector assumes and should assume, a strong supervisory and regulatory role in the framework of good governance principles. This is emphasized evidently in the Ninth Development Plan Strategy, which comprises the period between 2007 and 2013.
For example, we hear often that the Hong Kong financial markets provide a perfect hedge, or more modestly, a proxy hedge, for risks in the Mainland of China or the region. There is an element of truth in this. After all, this is one of the roles of an international financial centre. But it does mean that, in Asia, the dynamics of financial contagion can be quite complex. For example, financial crises do not necessarily erupt and manifest themselves at source - somebody sneezes and others get pneumonia. So, it is only prudent that Asian monetary co-operation should be on the agenda of discussions on Asian finance, and I have been urging for greater co-operation for some time. I am therefore glad that there has been increasing attention given to the subject in recent years. But, in terms of actual co-operative initiatives, progress has been slow and the scope rather narrow. To be fair, there is consensus on the need for diversification of financial intermediation channels, for enhancing efficiency and financial stability, and this consensus has been manifested in co-operative efforts to develop the bond markets in Asia. There are three clusters of initiatives:  2  "What is driving Asian exports? ", HKMA, August 2003.

Niklaus Blattner: Switzerland’s real estate market Introductory remarks by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 15 December 2005. *  *  *  Competition in the Swiss real estate market has undoubtedly become stiffer in recent times. This is basically a good thing. Moreover, different market players and other observers have been pointing out for some time now that banks have not only become more competitive, but also less cautious. Mortgage lending is part of the banks’ core business. The Swiss National Bank (SNB) therefore decided to analyse the current situation and development in the Swiss real estate market in more detail. The SNB is mandated to contribute to the stability of the financial system. The question asked was the following: Are there any signs that the fiercer competition in the real estate market is associated with excessive risks which may ultimately threaten the stability of the banking system? The National Bank’s analysis is based on both statistical data regarding banking activity and on the results of a survey conducted among a number of banks specifically for this purpose. The random sampling covers banks with a total market share of over 70%. The main result of our survey shows that stronger competition in the real estate market has so far not had a destabilising effect on the banking sector in Switzerland.
The forces behind all this are complex and not well understood, and this complicates any judgment of how enduring they will prove to be. The main candidates in terms of fundamental explanations involve change in economic conditions and in the structure of financial markets. There has been a marked improvement in global economic performance, with strong growth, relatively low inflation, and less volatility in both growth and inflation. This seems to have reduced concern about future fundamental risk, in terms of the potential damage of future shocks and in the ability of governments and central banks to both avoid the policy errors of the past and to competently manage some daunting longer-term policy challenges. The global trend toward independent central banks with clearer mandates for price stability has contributed to this confidence, as has the improvement in national balance sheets in emerging markets, with stronger fiscal positions, higher reserves, and less exposure to foreign-currency denominated debt. Changes in financial markets, including those that are the subject of your conference, have improved the efficiency of financial intermediation and improved our confidence in the ability of markets to absorb stress. In financial systems around the world, the capital positions of banks have improved and capital markets are becoming deeper and playing a larger role in financial intermediation. Financial innovation has improved the capacity to measure and manage risk. Risk is spread more broadly across countries and institutions. Technological change and the relaxation of controls have made it possible for capital to move more freely across national borders.

One such question could be: Why must the Riksbank spoil the party? The Swedish economy has finally begun a period of good growth, rising employment and decreased unemployment, while inflation is low. So why do central bank representatives have to talk about the need to raise the interest rate in such a situation? May it not lead to a renewed increase in unemployment? Another question is how strongly the Swedish economy can expand without risks for inflation. Can it be the case that even the Swedish economy is displaying new tendencies, as certain observers argue has happened in the United States, that is, that growth can be higher without inflation taking off? If so, why is the Riksbank talking of a need to raise interest rates? Let me begin with the first question. Why spoil the party? History teaches that when the growth of demand outpaces the economy’s long-term output trend, this leads in time to risks of capacity shortages and bottlenecks that result in turn in rising prices and wages. At the same time, as it takes one to two years for an adjustment of the instrumental rate to affect the economy, the central bank’s monetary policy decisions have to be based on assessments of the future. Faced with the risk of a situation of this type occurring, it is therefore better to try to slow BIS Review 92/1999  2  things down with a small interest rate increase at an early stage.
•  First, we intended to develop a framework that encompasses the "three pillars" necessary to support an effective system of regulatory capital: the appropriate measurement and minimum requirements, supervisory review, and market discipline. •  Second, we wanted to align the minimum requirements more closely with the actual underlying economic risks to which banks are exposed, which should help allocate capital resources effectively. •  A third goal was to encourage banks to refine their measurement and management of risk over time. By creating incentives in the New Accord for banks to re-evaluate and enhance their tools constantly, we expect that banks themselves will adopt a forward-looking perspective on risk. I’m pleased to say that, through the Committee’s efforts and the cooperation and support of other supervisors and the industry, it appears that the proposed framework will attain each goal. We can now count them among the milestones we've achieved. 1. Encompass the "three pillars" of capital adequacy  With regard to the first goal, the new framework will recognize the important roles that supervisors and markets can play in motivating the prudent management of risk and capital. Indeed, it is the Committee’s view that it would be insufficient for any country to simply adopt the new minimum capital requirements and ignore the remaining two pillars.

Nonetheless, we believe that this treatment helps to align regulatory capital more closely with the underlying risks. Procyclicality Another general concern expressed is that the New Accord’s increased sensitivity to risk will reinforce behavioral patterns in banking organizations that may increase the cost of credit precisely at times when its supply is falling, namely during downturns in the business cycle. While we are working to address this concern about procyclicality, it is not a reason to shy away from creating better risk management tools. Here, supervisors must articulate the need for banks to assess risks on the horizon. If banks fail to develop and manage to reasonable expectations about how their risk profiles may change over time, they may take on excess exposures today that they cannot administer responsibly tomorrow. At the same time, we should remember that the New Accord sets out the minimum amount of capital necessary to comply with banking regulations. All supervisors expect their banks to operate at levels above the regulatory minima, and nearly all banks manage to their economic capital needs, not to their regulatory capital requirements. So although deteriorating credit quality might drive up the minimum capital requirement, a bank should already be operating above that level, which should dampen the effects of a sudden downturn in business conditions and asset quality. Along those lines, the Committee recently agreed that banks adopting the "internal ratings based" approach to credit risk will be required under Pillar 2 to conduct meaningfully conservative credit risk stress testing.
Taking advantage of hindsight, I would like to stress two chief lessons learned from this twenty-year process of modernisation. The first is that regulator and banks have formed a “joint partnership”, prompting a fruitful “virtuous cycle” and matching goals and efforts in order to attain efficiency and soundness. Close communication and constant exchanges of views are the principles currently governing this relationship. The second lesson is that, at the end of the day, there has been no trade-off between profitability and soundness: the competitive capacity of Spanish banks has not been dented by supervisory policies. These policies have been oriented towards enhancing the solvency  BIS Review 56/2008  3  and internal governance of banks, and to increasing the confidence of the public and the markets in the banking sector. However, this transformation has not been painless. It has to be recalled that the Spanish financial system had to overcome a deep-seated crisis in the mid-seventies to early eighties. By the end of the 70s, our banking system was weak, closed, corporatist, old-fashioned and highly regulated. Such regulation affected many of their operating areas, curtailing competitiveness. Interest rates were set administratively and credit institutions were obliged to meet investment ratios to finance certain economic sectors with maximum interest rates. This environment made for weak structures with no incentive to compete and no professional teams or systems to accurately identify and manage risk. At that time a range of new banks were allowed to set up.

BIS central bankers’ speeches  5  Temporarily restricted autonomy when the inflation target is defended Although small countries with variable exchange rates normally have a certain degree of monetary policy autonomy, this does not, however, prevent specific situations arising in which their central banks become highly dependent on the actions of larger central banks. Recent developments in Sweden provide an example of this. A little less than a year ago, at the start of 2015, the Riksbank was in a difficult situation. Inflation had long been below the target of 2 per cent, while long-term inflation expectations were showing a falling trend and were below target. The Executive Board of the Riksbank considered it particularly essential to get inflation to rise towards 2 per cent, as there was a risk that continued low inflation would lead to inflation expectations continuing to fall and to confidence weakening in the inflation target as an anchor for the formation of prices and wages. 8 The monetary policy easing that had been introduced earlier therefore continued. The situation was complicated because the Riksbank needed to take into account the fact that monetary policy was very expansionary in many other countries. Large differences between monetary policy in Sweden and in other countries could lead to a rapid and strong appreciation of the exchange rate. This, in turn, could impede rising inflation and also have negative consequences for the real economy.
These trends, and the extraordinary efforts of UK businesses themselves to cope with the hostile international environment, are already resulting in a stronger net external trade performance. That in turn is contributing to the recovery, particularly in manufacturing output growth and to the more encouraging news in some recent surveys. To the extent that this improvement in external demand persists, it will help to ease the exceptional pressures on the most internationally-exposed sectors, and contribute to a better balance within the UK economy. But it needs, of course, to be accompanied by corresponding moderation of the growth of domestic demand - after the offsetting stimulus of a year ago - if we are to maintain overall stability. That essentially is why interest rates have had to rise since last autumn. Mr Chairman, most people, as I say, accept in principle that sustained monetary stability is good for the economy as a whole in the longer term - though it is accepted with varying degrees of enthusiasm by adversely affected sectors at any particular time. But there is, nevertheless plenty of room for debate about the operation of monetary policy in practice. Specifically at present the MPC is often accused of being overzealous - and it is suggested that we don’t in fact need to raise interest rates at this point in order to achieve the inflation target. That is a more technical question. Changes in interest rates take time to have their full effect, so our decisions have to be forward looking.

For us  BIS central bankers’ speeches  3  to achieve this goal, the BOT will adhere to our economic and financial stability mandates while reaching out to other public policy dimensions to promote a common vision of all policymakers to achieve a more competitive Thai economy. This common vision must however reflect the desired policy result based on real needs of the people. Through outreach and humility, we will also engage more with our stakeholders in pursuit of Thailand’s sustainable economic wellbeing so that Thailand can cross the transitional gateway and stand on the world stage with strength and stability. 4  BIS central bankers’ speeches
The adjustment problems, after undue optimism among households and firms in the late 1990s had given rise to the imbalances, will lead to the recovery being more sluggish than usual. Some even consider there could be a more drastic correction that breaks a global upswing in the coming years. Those who are more optimistic point instead to the U.S. economy’s productivity growth; if this remains high, there is less cause to be concerned about the imbalances because a higher potential growth rate permits higher incomes with which to service the debt burden. The Riksbank’s current analysis does not envisage a quick correction of the imbalances. Still, there are grounds for supposing that growth in the American economy in the coming years will not be as high as in the late 1990s. And if the imbalances were to be adjusted more quickly, the Riksbank would, of course, have to take that into account in the formation of monetary policy. Turning now to Europe, we see fewer signs of a recovery. The prospects for Germany, the largest economy in the euro area, are still uncertain. However, a look at the leading indicators does show that firms have become more positive. Imbalances like those in the United States have not accumulated in the euro area and this may benefit a recovery. Moreover, economic policy is also markedly expansionary in Europe, although the scope for fiscal measures is not as great as on the other side of the Atlantic.

As you know, the crisis has also led the Eurosytem to embark on a very limited programme of bond purchases, with a view to restoring the monetary policy transmission mechanism where it had been impaired. This programme has served us well. The monetary impact has been systematically and fully sterilized. Where do we stand? Overall, these changes have been favorably received by the markets. Nevertheless, the sense of crisis has not yet disappeared. Most recently, a joint IMF / EU EUR 78 billion programme has been approved for Portugal. In order to alleviate the persistent sense of crisis, existing programmes must be delivered on. In this respect, their conditionality is of the utmost importance. Countries under a joint programme have committed themselves to conducting structural reforms, whose benefits and positive impact cannot immediately be assessed. These programmes pave the way for stronger and more sustainable growth in the near future. To be absolutely clear, there is no doubt that countries under assistance have to deliver fully on their austerity programme. Solutions akin to debt restructuring are not an option. It would push these countries into a disastrous scenario, associated with a sustained loss of access to any kind of financing. Programmes can and do work. If you look at Eastern European countries that received conditional financial assistance from the EU and the IMF two or three years ago, you will conclude that these programmes proved to be highly useful and successful. Hence, the assessment has to be cautious, before being definitive.