samchain/econo-pairs-v1 huggingface dataset:
BIS Review 128/2010  3  Custodian of the Two Holy Mosques The endorsement of the Ninth Development plan coincided with the announcement by the Central Department of Statistics and Information of preliminary results of the population census. The population of the Kingdom amounted to 27.1 million, of whom about 18.7 million are Saudis, and 8.4 million are residents. The number of houses stood at 4.6 million. These results support your Royal instructions to exert every effort to achieve the objectives of the Ninth Development Plan in a timely manner, especially with regard to enhancing citizens’ welfare, providing housing, employment, education, health care services, and modern facilities needed, and working hard to fight poverty, paying special attention to balanced development in all regions of the Kingdom. At the regional level, the four member states of the GCC Monetary Union (Bahrain, Saudi Arabia, Qatar and Kuwait) have ratified, at the beginning of this year, the convention of the Monetary Union. By your Royal encouragement and support and that of your brothers the leaders of the Council’s states, the Monetary Council began its work as the nucleus of the central bank to be established upon the completion of the main facilities and infrastructure of the Monetary Union. The central banks and monetary agencies, members of the Monetary Council, are doing their utmost to conduct the Council’s work in accordance with the guidance of the leaders of the Council’s States. In spite of these bright achievements, there are still many challenges posed to our development march.

“Special report on central banks and the world economy: only human”, The Economist, October 20th-26th 2007. 4  BIS Review 15/2008
As a matter of fact, whenever accelerated growth in credit and money aggregates occurs simultaneously with soaring asset prices and loose lending standards, increased inflation becomes very likely over the three years that follow (Roffia and Zaghini, 2007). 8 In this context, one can argue that an increase in lending with inflation prospects can be fought with a tightening of monetary policy. However, if the boom was triggered by lack of regulation or supervision, monetary policy tightening by itself could probably be ineffective – or even counterproductive – if the financial system is weakened because of excessive risk taking. Thus, financial regulation plays a major role in granting financial integrity. At the beginning, regulation focused on the strength of individual institutions. However, the tensions we are seeing now exemplify, once again, how individual fragility may quickly evolve into systemic problems. The interrelationships among financial institutions and the proper operation of the markets where liquidity is traded are essential ingredients of a market economy, but these characteristics are also the channels of financial contagion, as recently seen. So it is crucial to have a systemic vision, not only from the perspective of how the different institutions relate to each other, but also how the different types of financial and operating risks are intertwined, creating potential vulnerabilities. The Financial Stability Reports that many central banks put together periodically – including us – seek to evaluate the resiliency of the system as a whole to large disruptions, by carrying out stress tests.

Taken together, these two sets of actions steadily raising the target range for the federal funds rate and steadily bringing down our securities holdings—should help bring demand closer to supply. In fact, even though we haven’t done either of these things yet, financial conditions have already responded based on the expectation of Fed action. For example, medium- and longerterm Treasury yields and fixed-rate mortgage rates have risen close to their December 2019 levels. Of course, our actions will be driven by the data and a determination to achieve our maximum employment and price stability goals. With these three factors working together to restore balance between supply and demand, I am confident we will achieve a sustained, strong economy and inflation at our 2 percent longer-run goal. For this year, I look forward to continued growth and receding inflation, both for the nation and North Jersey. Specifically, my forecast for the U.S. economy is for real GDP to grow a bit below 3 percent this year, for the unemployment rate to end the year around 3-1/2 percent, and 3/4  BIS central bankers' speeches  for PCE price inflationto drop back to around 3 percent, before falling further next year as supply issues continue to recede. Conclusion Since the onset of the pandemic two years ago, this has an extraordinary time for the economy and monetary policy.
For a general discussion of possible tools to manage the risks linked to the housing market and household debt, see T. Andersson, C.A. Claussen, B. Lagerwall and P. Torstensson (2011), “Tools and institutions for influencing house prices and household debt”, in The Riksbank’s inquiry into the risks in the Swedish housing market, Sveriges Riksbank. 7  See also R. Juks and O. Melander (2012), “Countercyclical capital buffers as a macroprudential instrument”, Riksbank study, December, Sveriges Riksbank. 8  See the article “Higher risk weights for Swedish mortgages promote financial stability”, in Financial Stability Report 2012:2, Sveriges Riksbank. 4  BIS central bankers’ speeches  value ratio of 85 per cent when purchasing a house. One alternative is to limit borrowing in relation to income, what is known as an LTI (loan-to-income) requirement. A further means of limiting household debt is the amortisation requirement for mortgages. A mathematical example is used in our most recent Financial Stability Report to show that amortisation requirements can have substantial effects on household debt.9 …but there is no framework for macroprudential policy in Sweden, and one needs to be implemented as soon as possible There are thus a number of tools that can be used instead of the repo rate to reduce the risks related to household debt, and which in many cases would probably be more effective.

Additionally, in December 2011, the Eurosystem announced further enhanced credit support in the form of two repo operations with maturity of up to three years. There are indications that especially these three-year longer-term refinancing operations (LTRO) have proven effective in preventing an abrupt deleveraging. They significantly helped in restoring confidence in financial markets by providing insurance on the ability for banks to rely on ECB liquidity. This has taken pressure off banks to fire-sell assets or to shrink their loan book. In fact, there is some evidence that banks who bid for liquidity at the three-year operations used this liquidity to address the roll-over risk implied by the issuance of debt securities or other funding instruments that will mature over the next few years. At the same time, there is some first evidence that the provision of long-term liquidity has helped in supporting credit provisions, especially in countries more affected by the sovereign debt crisis, therefore helping to address impairments in the transmission of monetary policy. The ECB has recently announced the details of Outright Monetary Transactions (OMT) in secondary markets for sovereign bonds in the euro area in order to address severe distortions in government bond markets which in particular originate in unfounded fears on the part of investors of the reversibility of the euro. OMT also aims to safeguard the monetary policy transmission mechanism in all countries of the euro area, thereby preserving the singleness of the ECB’s monetary policy.
I said, “Tim, that’s a great job. I really like you, I’d love to work with you, but what do I do the 39 other hours of the week besides advise you?” And then a couple of weeks or months later, I can’t remember exactly how long it was, he called up again and said, “Well, how would you like to come to the New York Fed and run the Markets Group?” Markets Group at the time had about 230 employees. They executed monetary policy for the 14 / 15  BIS central bankers' speeches  Federal Reserve Bank of New York. I wasn’t sure I was going to have any time to talk to Tim Geithner in that role. And so I said yes immediately. Dr. Olajide Oladipo: You have a question? Are you a student? Audience Member: Yes, I am. Dr. Olajide Oladipo: Thank you. Audience Member: I am a student. Thank you so much for taking the time and speaking to us. My question was, being from a younger generation, I’m definitely interested in investing, but what would be your biggest piece of advice. Especially for us, the younger generation, with a limited budget, what would you – how should we go about it? President Dudley: Well, I don’t think I’ve ever been asked for investing advice before now. It’s probably not appropriate for the Federal Reserve to give out investing advice. I think the first thing is you want to get knowledgeable.

This mechanism amplified the immediate effect of public spending on aggregate demand. Monetary policy – in charge of credit conditions – was entrusted with the task of alleviating, through a careful policy of accommodation, the impact that government borrowing  BIS central bankers’ speeches  3  would have exerted on the cost of private debt. The central bank was financing the Treasury by creating money. Under these conditions, an increase in public spending could “add demand”– where this would be lacking for the goal of full employment – without taking away resources from other uses. Since then, the theory of economic policy has followed two paths that have led it to invert the ranking of relative potential of tools and to enhance the definition and measurement of the objective. As for the instruments, a different theory of the formation of expectations – no longer extrapolative – has highlighted the strong impact of monetary policy and has weakened the expected effects of fiscal policy. In the models that we use today, agents, when formulating their expectations, are attentive to the sustainability conditions of the choices in the long term. Economic policies deemed unsustainable in the long run are ineffective. For example, an active deficit-financed fiscal policy is limited by fears about the government’s ability to refinance the debt from which that policy originates. These fears may lead to behaviours that weaken the private sector – or, at worst, completely neutralise – the impact of public spending as a means of controlling demand.
This means that the curve normally has a negative slope. An outward shift in the curve can be interpreted as deterioration in matching in the labour market, as the number of vacancies for each given level of unemployment is higher. Movements along the curve may depend on economic changes. When there is an improvement in the level of economic activity, the number of vacancies and recruitment rise, but at the same time the difficulties and time required to fill the vacancies increase. The large rise in the unemployment rate in Sweden at the beginning of the 1990s was followed by a reduction in the number of vacancies, which can be interpreted as a movement along the curve. During the mid-1990s, unemployment appeared to have stabilised at a high level, but in recent years unemployment has been held back, while the vacancy ratio has risen. The Beveridge Curve appears to lie further out than before, which could indicate that the matching process has deteriorated and that the labour market has become less flexible. One reason for a possible outward shift could be that the persons who became unemployed during the crisis years of the 1990s have had difficulty in returning to the labour market.

Meanwhile, room for further policy accommodation was diminishing, and any possible side effects of keeping the interest rate low for a protracted period, needed to be taken into account. 10. I would like to end my remarks by thanking you all again for your contributions to the Thai economy and let me assure you that the Bank of Thailand will continue our works to ensure a stable and resilient financial and economic environment, conducive to economic growth of the country. Thank you very much. 2  BIS central bankers’ speeches
There are, however, some institutional responses that will take place if the Bank is not able to return the exchange rate back to its initial range, as defined by the mandate, without contributing to inflation or a deflationary recession. I will come back to this issue later in my speech. 1  BIS Review 101/2000  The base drift problem If the inflation rate in Norway deviates from the inflation rate in the euro countries, the nominal exchange rate will need to adjust over time. However, some of you may object that stabilising the Norwegian inflation rate at the level aimed at by the euro countries may not be sufficient to stabilise the nominal exchange rate. The reason is that inflation in both Norway and the euro countries will be subject to stochastic shocks. This means that even if the expected inflation rates in Norway and the euro countries were the same, the actual inflation rates would deviate. Technically speaking, the relative price levels will be subject to base drift, and so will the nominal exchange rate. Professor Larry Ball has discussed this in a paper on Norwegian monetary policy. Keeping the relative price level constant would require that we target the price level and not the inflation rate. However, in the 1920s Norway experienced that a policy aimed at achieving a specific level for the purchasing power of money led to substantial macroeconomic instability.

Aiming at a price level target may in some situations require a monetary policy that leads to a deflationary recession, which may be hard to turn due to the zero limit on nominal interest rates. In other situations it may require inflating the economy. A monetary policy leading to inflation or a deflationary recession will undermine confidence in the krone, thereby generating exchange rate instability. We also note that the present exchange rate range has more or less prevailed for more than 10 years, indicating that base drift may not represent a substantial problem in practical policymaking. How does Norges Bank operate? Forecasts of inflation and general macroeconomic development play a large role in the conduct of Norwegian monetary policy. Projections are presented in the Bank’s quarterly Inflation Reports. If the inflation forecast does not approach the level aimed at by the euro countries in 2 to 3 years for a given interest rate path, Norges Bank will consider adjusting the interest rate. In this narrow sense, one could say that the conduct of monetary policy in Norway has some similarities with “inflation forecast targeting”, in Lars Svensson’s terminology. In addition to economic forecasts, we aim to develop tools that can supplement the use of our large macroeconometric model. At the moment we are working on the construction of simple calibrated models that will be presented at this workshop. The calibrated models can be employed, for instance, to test the performance of simple indicator rules. How does the Norwegian system differ from inflation targeting?
Mugur Isărescu: The macroeconomic perspective in Romania Welcome speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the Romanian-Czech Business Forum, Bucharest, 20 May 2014. *  *  *  Your Excellency, President Zeman, you are most welcome here, at the National Bank of Romania, a place that holds within its walls countless pieces of history, tails of how Romania has grown into a modern state. We are privileged to greet here, today. Distinguished guests, Ladies and gentlemen, Allow me to extend a very warm welcome and thank you all for gracing us with your presence at the Romanian-Czech Business Forum. It is a great pleasure for the National Bank of Romania, and an honor for me and for the members of the board, to host what will be a substantial discussion about the challenges currently facing Europe, in particular the development of economic relations between the Czech Republic and Romania. Here, at the National Bank of Romania, we take pride in having always been a forum for debating, in an open and profound manner, the themes and trends defining our age. A few weeks ago we celebrated the 134-th anniversary of the Romanian National Bank, a central bank ranking 16-th in the world. During the break, after the working sessions, you are kindly invited to visit/walk the outstanding halls of the Old Palace of our national bank.

Romania is a supporter of this initiative as adhering to the Banking Union will strengthen financial stability and further increase confidence in the national banking sector through the harmonisation of supervisory practices and deposit guarantee schemes and avoiding regulatory arbitrage. In the long run, Banking Union will foster sustainable lending and economic growth (by reducing the fragmentation of the European financial markets). In the particular case of Romania, it makes even more sense to support the project given the share of foreign capital in our banking system. Furthermore, it is always preferable to have a voice in the setup of a mechanism the existence of which will affect all EU Member States, especially since – irrespective of their current choice – all will eventually end up as members. Our central bank will obviously be a major player in successfully reaching these objectives – sustainable nominal convergence, preparedness for euro adoption and strengthening financial stability through participation in the Banking Union. By doing this, it should contribute to providing the stable business environment that is required from the perspective of micro level decisions. Czech companies are already present as investors in Romania, with names such as CEZ, Zentiva, Hamé, and hopefully following this Forum more companies will join them. This should work both ways, as investment opportunities identified during the Forum discussions may also prompt Romanian companies to invest in the Czech Republic. Having said all this, I wish you to turn this event to good account and start fruitful business ventures.
Saving is high both in oil-producing countries, China and other Asian countries. Long-term interest rates in Norway largely shadow external interest rates because like other countries Norway is keeping inflation in check. Norwegian households primarily finance house purchases by means of floating-rate loans. Long-term interest rates are still of considerable importance because  BIS Review 15/2007  9  they provide information about the future path of short-term interest rates that borrowers can expect over time. Unusually low short-term interest rates have probably also boosted the rate of increase in house prices in recent years, but this particular effect will be reversed when the interest rate is raised to a more normal level. Developments in short-term interest rates have influenced the path for house prices over the past 15 years, but periods of low interest rates are followed by periods of higher interest rates. Norges Bank’s policy rate is therefore of limited importance for house price inflation over a period of 15 to 20 years. The housing stock in Norway, which numbers a good 2.2 million dwellings, shows little change from one year to the next. As a result, higher demand for housing will primarily translate into higher prices in the short term. In the 1990s, housing starts in Norway were fairly low in relation to growth in the number of households. Moreover, population growth has been higher in recent years, largely reflecting a high level of immigration.

It naturally adapts to the different economic development stages the country and the state go through. I do believe there cannot be a developed and well-integrated economy without open, integrated, efficient, transparent and well-regulated markets. Therefore, it comes out clearly that the development of the interbank market is in all stakeholders’ interests: the banking system itself, the Bank of Albania and the economy on the whole. Being fully aware of this, the Bank of Albania has built a clear strategy in terms of: 1. Deepening and broadening the money market in Albania further;  2. Creating relevant market instruments;  3. Establishing a close and rational cooperation with the banking system and the financial market in general;  4. Ensuring a clear and constant communication with the market operators and the public at large;  5. Providing modern technological solution. As a result of these initiatives, our monetary policy is now entirely based on indirect instruments of monetary management, which operate in line with the open market logic. Our operational framework allows the banking system to manage the liquidity effectively, being a counterparty of the last resort to meet the system’s aggregate needs for liquidity or invest it. Via the required reserve, the Bank of Albania has provided you with enough room to cover your unexpected liquidity needs, at a remuneration rate close to the market interest rates that  BIS Review 97/2010  1  avoid the distortions the required reserve may yield to your banking business.
It is not so much that the top management of banks consciously swing for the fences, but rather that wholesale credit may be systematically too cheap for banks, and perhaps other intermediaries too, unless the usual market disciplines of failure can apply. The international community is, rightly, increasingly focused on this. And, in particular, it is good news that the G20 Finance Ministers and Governors have asked the Financial Stability Board to pursue it. To quote the theme of this conference, “TBTF” is probably the definitive Cross-Roads issue. Central bank liquidity insurance: discount window lending against wide collateral I shall begin with the central banker’s role as lender of last resort, the one area where there was quite a lot of thinking ahead of this current crisis. Even so, one of the things many central banks, including the Bank of England, confronted over the past two years or so was that, when conditions are bad enough, the central bank will inevitably lend to solvent and viable firms against a very wide range of collateral. Since we will end up doing so, it is wise to acknowledge that in advance. But, crucially, it is also wise to set the terms so as to avoid subsidising or encouraging imprudent liquidity management by firms in normal circumstances. That is one of the principles which underpin the Bank of England’s own new, permanent liquidity facilities introduced just over a year ago. The other principles are that: •  Our liquidity insurance should absolutely not cut across monetary policy.

It is thus no exaggeration to say that those present at a similar dinner six years ago felt quite optimistic about the prospects for the European economy, within Monetary Union, although the Union had only just taken its very first steps and euro banknotes and coins had not even begun to circulate. We now have the benefit of the experience built up in the intervening period. The euro has meant tangible benefits in terms of savings on transaction costs for citizens, eliminating exchange rate risks within the area, facilitating market integration and it has provided an environment of economic and monetary stability. The ECB has attained high credibility in a short period of time which is undoubtedly a result of the clarity of its objectives, the effectiveness of its strategy and the soundness of its decisions. Nevertheless, it is a fact that the European economy has not managed to repeat growth figures close to those seen in 2000. It has been prone to bouts of notable sluggishness, highlighting - in addition to the effect of an unusual series of adverse shocks - the structural shortcomings holding back activity and employment. We have therefore seen that, despite the favourable effects a monetary policy unequivocally geared to price stability has on economic prosperity, the full effectiveness of its contribution requires an ambitious reform agenda in other economic policy spheres.