samchain/econo-pairs-v1 huggingface dataset:
The main risks currently being considered by the Central Bank are: (1) an eventual propagation of food and energy price shocks to inflation dynamics, in the context of a closing output gap and transitory high inflation rates. This propagation could be materialized via rising wages, due to wage CPI indexation and a reduced unemployment rate; or via rising medium and long-run inflation expectations that significantly could diverge from the inflation target; (2) larger adjustments in global financial markets, with more severe consequences for world growth and commodity prices; (3) signs of more rapid moderation of internal GDP growth dynamism, beyond expected. In particular taking into account these risks, the Central Bank continues conducting the course of monetary policy according to its constitutional mandate to safeguard price stability. Yves Mersch: Recent financial market developments Speech by Mr Yves Mersch, Governor of the Central Bank of Luxembourg, at the 50th anniversary of ACI Luxembourg, Luxembourg, 12 October 2007. 4  BIS Review 120/2007  *  *  *  Since my first invitation to an ACI event as a speaker a few months after assuming my first mandate 9 years ago, the markets have undergone many turbulent sequences, although I could not detect a correlation between market upheavals and my regular appearance at ACI events. Let me therefore thank the Luxembourg chapter for inviting me again today. I feel honoured.

Broadly speaking, we believe that this goal was attained. The current circumstances are different. Once again, we are facing a crisis which could adversely affect economic activity and agents' income. However, this time, some loss of income is inevitable, insofar as it is caused by the rise in the prices of goods that we do not produce. Attempting to avoid the adjustment that is needed will only trigger a more persistent and protracted inflationary process, with very negative consequences for competitiveness and economic stability. A different monetary policy response is therefore needed. I will now address the role of each area of economic policy in the current setting, beginning with monetary policy. ECB monetary policy The ECB is responsible for maintaining price stability in the euro area. That is how it can best help ensure sustainable economic growth over the medium term. To explain the ECB's response to this inflationary episode, it is useful to remember that it defines price stability as a symmetric inflation target of 2% over the medium term. The aim is therefore not to stabilise current, observed inflation, but to stabilise inflation over a two to three-year horizon. This is justified because our actions affect inflation in a very gradual way, achieving their maximum impact after about two years, and is particularly appropriate in the face of certain kinds of shocks – such as adverse supplyside shocks, which push inflation and activity in opposite directions in the short term.
Furthermore, given the nature of the crisis, the restrictive measures and the movement limitation, part of the population faced a forced reduction of the consumption, primarily the consumption of different services, which is characteristic for persons with higher income and with greater capacity and propensity to save. Third, given that all future economic flows are determined by the extremely uncertain epidemiological curve, in such an environment, the precaution motive has a great role in the depositors' behavior. The European Commission surveys for both our country and for the countries of the Western Balkans also show that the respondents' perceptions in 2020 and in 2021 are in favor of the view that due to the economic situation in this period, savings are more favorable decision, compared to recent years. At the same time, the surveys of our Statistical Office show a decrease in the utilization of savings as a source of income during 2020. What has been happening to the savings in the banking system in our country from the beginning of the pandemic onwards? The deposit potential is increasing with a relatively solid intensity of over 8% on an annual basis, whereby the dynamics of increase is very similar to that of the period 2018 - 2019. Such dynamics does not resemble a bit the developments during the global financial crisis, when in a short time the deposit growth slowed down, which from around 20%, reduced to around 7% on an annual level.

Second, do the new circumstances change the investment behavior of the population and what consequences may it have on the financial stability? Third, what are the processes that accelerated and surfaced due to the pandemic, and which are also an opportunity for productive use of savings and financial support of sustainable projects by the financial sector? Unlike other crisis episodes, the pandemic has actually increased savings and this process is a global phenomenon. In the developed countries, the estimated excess savings in 2020 was nearly 7% of GDP, showing that savings were higher in the pandemic, than in normal circumstances. In the region of the Western Balkans, the rates of domestic savings measured as the difference between the generated income and the total private sector and government consumption registered a slight decrease of around 3 percentage points of GDP, but in conditions of a strong fiscal consumption for support of the economies. This means that private sector savings, despite the great recession, it is very likely that they remained relatively stable or grew. There are three reasons that contribute to this phenomenon. First, despite the recession, disposable income did not decrease, partially due to the fiscal impulse for support of wages and  1/3  BIS - Central bankers' speeches  jobs.
The exception is the primary industries, which play a far more important role in these two counties than in the rest of the country. The share employed in the public sector is also somewhat higher than in Norway as a whole. Developments in North and South Trøndelag counties are largely consistent with the overall picture for Norway. Suppliers to the petroleum industry and business sector services report particularly strong growth. The interviews reflect optimism with respect to the next half year with confidence in continued growth. The service sector and suppliers to the petroleum industry are also expecting the strongest growth ahead. With the exception of retail trade, all industries appear to be increasing investment. Construction of day-care centres is pushing up investment in the local government sector. Investment is still high in the service sector, but high investment over the past year is pushing down growth ahead. In general, profitability developments are favourable. The retail industry reports unchanged profitability, while the building and construction industry has reported an improvement in profitability. Profitability growth in the export and service industries appears to be solid. Employment is rising in the region and unemployment is at its lowest level for five years. For manufacturing and retail, the rate of employment seems to be constant, while the construction and service sectors are showing a clear rise. There are clear indications of growth in employment in the local government sector. Skills shortages are increasingly being perceived as a constraint on production growth.

However, I am less sanguine when it comes to the credibility component, which boils down to trust. Trust has to be earned over a long period of time, and can be lost overnight. 2/4  BIS central bankers' speeches  For Hong Kong to excel, it is not enough for our financial institutions and practitioners to be technically competent only. They must also uphold high ethical standards in order to gain the trust and respect of customers. 10. In the past few years, a number of misdeeds by some financial institutions and practitioners have come to light. For example, the rigging of LIBOR had led to international reform of interest rate benchmarks, a process which is still ongoing. There were also cases of front running and other irregularities in FX and gold trading that had led to investigation into some banks and senior bankers. All these point to the weakness of the tradition of “self-discipline” amongst financial practitioners. It is now considered that more comprehensive and possibly more prescriptive guidelines on ethical standards and conduct are needed to strengthen the system. The latest FX Global Code is the outcome of one of such reforms. The Code was developed over the past two years by 16 central banks, including the HKMA, together with private-sector institutions from both the buy and sell sides. It is a comprehensive set of global principles on good practice in the FX market, and it is intended to promote a robust, fair, liquid, open, and transparent market.
William C Dudley: Market and funding liquidity – an overview Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Federal Reserve Bank of Atlanta 2016 Financial Markets Conference, Fernandina Beach, Florida, 1 May 2016. *  *  *  Accompanying charts can be found on the Federal Reserve Bank of New York’s website. It is a pleasure to have the opportunity to participate in the Federal Reserve Bank of Atlanta’s 21st Annual Financial Markets Conference. This year’s topic, focusing on the connection between liquidity and financial stability, is an excellent one. As the first speaker, I thought it would be useful to lay out what I see as some of the key issues. I may raise more questions than provide answers, but, hopefully, my remarks will help to stimulate our discussion and debate over the next two days. As I see it, in the context of our financial system there are two distinct types of liquidity. The first is what is typically referred to as market liquidity. I would define market liquidity as the cost – both in expense and time – of buying or selling an asset for cash.

For this reason, we have adopted a broader-based approach, taking into account all relevant data. We have thus based our monetary policy on two “pillars”. In view of the monetary origins of inflation in the medium term, we have assigned a key role to the monetary aggregate M3, which constitutes the first “pillar” of our monetary policy strategy. This pillar is based on a reference value which we set at 4.5% for the annual growth rate of the broad monetary aggregate M3. This monetary indicator is regarded as being the most compatible with medium-term price stability. Last December, we confirmed this 4.5% growth rate for M3. The concept of a reference value does not imply a commitment on the part of the Eurosystem to automatically correct deviations in monetary growth in the short term. The reference value of M3 is consistent with lasting price stability. Naturally, we also follow the counterparts of M3 closely, that is to say the sources of money creation, and especially lending to the economy and capital flows with the rest of the world. However, trends in monetary aggregates are not in themselves sufficient for assessing the risks to price stability. This is why we need an exhaustive description of the prevailing economic and financial situation. The second pillar of the monetary policy strategy is based on a broad range of variables acting as leading indicators of the outlook for euro area price developments.
In the immediate future this includes: (1) implementing, fully and rapidly, the measures agreed upon at the 21 July meeting of the Heads of State or Government of the euro area; (2) adopting sustainable fiscal policies and growth-enhancing structural measures so as to achieve or maintain credibility of sovereign signatures in global markets; and (3) enhancing the coordination and consistency of communication. Authorities must act in unison with a total commitment to safeguard financial stability. Supervisors should coordinate efforts to strengthen bank capital, including having recourse to backstop facilities, taking benefit from the possibility of the European Financial Stability Facility to lend to governments in order to recapitalise banks, including in non-programme countries. I thank you for your attention. 4

•  The central banks of the euro area are able to offer support to economies in the short term, but there is a price to this, and such support can only be for a limited time. Central banks are not omnipotent and the responsibility for making reforms and explaining the need for reforms must fall squarely on the shoulders of governments and parliaments. Monetary policy in the euro area had an eventful 2014. Inflation in the euro area was falling last year and the expectations for inflation among market participants were on the downside, which led the central banks of the euro area to maintain their accommodative stance on monetary policy. The accommodative monetary policy has three main elements: •  The Governing Council of the European Central Bank took the decision to cut the interest rates at which commercial banks can borrow from the euro-area central banks to their lowest levels ever under monetary union. •  Targeted long-term loans were offered to the commercial banks in the euro area. It is important that low interest rates be passed on to the real economy and that good business projects be able to get funding from banks on reasonable terms. •  Purchases of assets held by the private sector started and large-scale purchases of sovereign bonds were started in March this year. •  It is no secret that I am no supporter of the plan to purchase government bonds.
Andrew G Haldane: Haircuts Remarks by Mr Andrew G Haldane, Executive Director, Financial Stability, of the Bank of England and member of the Financial Policy Committee, summarising a forthcoming paper in the Journal of Monetary Economics “Complexity, Concentration and Contagion”, 1 August 2011. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Marnoch Aston, Benjamin Nelson, Sujit Kapadia, Vasileios Madouros, Priya Kothari and Andrew Mason for comments and contributions. During the summer months, I have my hair cut slightly shorter than during the winter months. This helps keep my head a little cooler in the summer heat and my ears a little warmer in the winter cold. Anyone who has seen them will know this is a smart strategy for my ears, to say nothing of my head. This strategy is explicitly counter-cyclical. When the temperature goes up, my hair-length comes down and vice-versa. I am not alone. National statistics show that expenditure on haircuts increases as temperatures rise. The financial system also makes choices about haircuts. The haircuts in question are the amount of collateral a borrower places with the lender over and above the face value of borrowing. But collateral haircuts tend to behave rather differently to personal haircuts. They fall when the financial temperature is increasing and rise when the chill sets in. This strategy is explicitly pro-cyclical.

It is a great strength of the MPC that regional visits are a key part of the activities of all members of the Committee. And in the four and a half years I have spent as a member of the Committee, I estimate that I have visited around 140 individual businesses and talked to around 100 business groups – across England, Scotland, Wales and Northern Ireland.1 There are two reasons why I am particularly pleased to speak at today’s lunch. First of all, the East of England is my home region as I live in Essex and have done so for over a quarter of a century now. Second, I am always delighted to speak on a CBI platform as the seven and a half years that I spent as a CBI economist in the late 1980s and the early 1990s was a very important and formative period in my career. I have a great respect for the work of the CBI which remains the pre-eminent business organisation in the UK. That period I spent working in the CBI’s Economics Department about twenty years ago was also a period of major economic turbulence in the UK. I joined the CBI in September 1986, just as the “Lawson Boom” was getting underway. And I was the CBI’s Director of Economic Affairs from 1989 until the end of 1993 as boom turned to bust and the UK economy went through the last major recession before the global financial crisis of 2008/9.
Another supply factor that has contributed to low inflation is, as already mentioned, low increases in imported goods prices. Since early 2003, consumer prices for imported goods and services, excluding oil products, have fallen (diagram 8). The fact that the krona appreciated continuously from 2002 and up to the end of 2004 naturally played a role in the low import prices. However, the Riksbank’s forecasts for import prices included an assessment that the exchange rate would strengthen. Nevertheless, import prices excluding oil products have been surprisingly low. What can then explain the high productivity growth and the weak developments in import prices? This is, of course, difficult to know. One hypothesis often used to explain high productivity growth is that the extensive investment in information technology made earlier has begun to show results. Another explanation that I touched on earlier, and which has a bearing on both the rapid productivity growth and the depressed import prices, is the increase in competition. Stiffer competition from China and other low-cost countries has, for instance, contributed to increased pressure for rationalisation in many sectors. This, combined with outsourcing of work to low-wage countries, may have created opportunities to improve productivity at a faster rate than before. In addition, an increasing percentage of Swedish imports are coming from countries with low price levels. This shift in imports from countries with relatively high prices to countries where prices are much lower has probably contributed to keeping down prices of imports to Sweden more than the Riksbank had previously estimated.

This is despite the oil price having almost doubled over the past two years and substantial price rises on other commodities. Most indications are that international economic activity will continue to develop well over the coming years. We are assuming that economic activity in the euro area will improve more and more and that growth in the United States and Asia will slow down somewhat. The Swedish economy has also shown good growth in recent years. The upswing in world trade has contributed to strong growth in Swedish exports. Over the past year, domestic demand has also developed favourably, partly due to stimulation from expansionary monetary policy. The labour market situation has at long last begun to improve. Our assessment is that growth in the Swedish economy will remain high over the coming years. Household consumption is expected to accelerate and employment to increase. We also envisage inflation rising as capacity utilisation increases (diagram 2). Over the past six months we have witnessed the beginning of a rise in the rate of price increase, albeit from a low level. This does not appear to be due to large price rises within a few product groups; it appears to be a broader upturn. The Inflation Report we are publishing today indicates that inflation will be close to the target level a couple of years from now. This assumes gradual increases in the repo rate. I would like to emphasise that there are factors which complicate this picture. Inflation was unexpectedly low in January.
In a longer perspective, openness can also be vital to create a political pressure for change in individual countries. In the same way, openness with regard to current imbalances lends support to change in different countries and for considerations in the financial markets. I myself would very much like to see more transparent application and assignment procedures for posts at all levels within the IMF. The best candidate should get the job regardless of the applicant’s country of origin. 2. For the IMF to have enough weight, it is necessary that the key issues for the world economy really are discussed at the IMF’s table and not at others. Those who wishes to strengthen the IMF – and are serious about it – could therefore not create new forums outside the IMF with a view to discussing matters that fall within the IMF’s mandate. If this is done, the organisation will, in practice, be undermined. 3. One way of reducing the need for creating new fora, and, at the same time, in a pragmatic way approach issues of representation, would be to work more actively in the Executive Board with various (small) committees/subcommittees (similar to those in many national parliaments and in the Executive Board at the World Bank).

In 2016, the Executive Board’s capacity was strengthened by the appointment of a second deputy governor and an increase in the number of board members. At the end of 2016, the cumulative value of transfers to the GPFG was approximately equal to the cumulative return on the fund, reflecting the fund’s solid performance over time. Last year, the return on the GPFG was 6.9 percent.1 Over the period since inception, the return has averaged 5.7 percent. Adjusting for inflation and management costs, this gives an average real return of 3.8 percent. Developments in international financial markets and the growth outlook for the global economy suggest that the expected real return ahead will be somewhat lower than has been the case in recent years. The GPFG closely tracks the benchmark index; it is invested across a broad range of countries and markets. This strategy has so far generated a solid return within the defined risk limits. Restrictions imposed on the fund’s scope for investment, or instructions that disregard the tradeoff between return and risk, will limit the fund’s potential to achieve solid performance over time. In the execution of our management assignment, it is important that Norges Bank’s role is that of financial investor. It is crucial to the GPFG’s reputation in investee countries that the fund is not perceived as a political instrument. Norges Bank aims to be at the forefront of global efforts in the area of responsible investment.