samchain/econo-pairs-v1 huggingface dataset:
One concrete proposal that is put forward is that monetary policy should support a target for an employment rate of 80 per cent.8 The level of central banks’ inflation targets has begun to be discussed internationally as a result of the recent crisis.9 One argument is that if the targets were set slightly higher, it would make it easier to stimulate economies in deep recession, as it would reduce the risk of the policy rate reaching the zero lower bound. This is a relevant argument. Moreover, it is probably not the case that an inflation rate of, say, 3 per cent would be more problematic to live with than an average inflation of 2 per cent. It is only at considerably higher figures that inflation is harmful. Difficult to change an established inflation target However, it is one thing to set an inflation target for the first time, and a quite different thing to raise an existing target. If we go back twenty years in time, to when the policy of inflation targeting was introduced, the target could in principle have been set at 3 instead of 2 per cent. It is possible that it would have been a little more difficult to make the target credible, partly because it should have been higher than actual inflation at the time – which was fairly exactly 2 per cent, and partly because the few central banks that had begun targeting inflation at that time had chosen targets on or close to 2 per cent.

We have now lived with inflation targeting for almost twenty years. I am convinced that most people today would say that it has worked well on the whole – that it has fulfilled its purpose, and perhaps even exceeded expectations. But when one has got used to a particular system over a long period of time, it is fairly natural to start looking for faults and begin to question whether it might not be possible to make some modifications and improvements. And I do have the impression that inflation targeting in Sweden has recently been criticised somewhat harder and somewhat more often than usual. 1  For an interesting account of the situation at the Riksbank at this time, see Andersson, Krister (2003), “Utformningen av inflationsmålet och den penningpolitiska analysramen” (the shaping of the inflation target and the framework for monetary policy analysis), in Lars Jonung (ed), På jakt efter ett nytt ankare (looking for a new anchor), SNS Förlag. BIS central bankers’ speeches  1  Today I intend to discuss and respond to three types of criticism that have been put forward. The first is the claim that the Riksbank has an inbuilt tendency to set the interest rate too high and has thus caused unemployment to be unnecessarily high. The second criticism suggests that the target for monetary policy should be revised, by raising the inflation target and giving the Riksbank a numerical target not just for inflation, but also for employment or unemployment.
Frank Elderson: Full disclosure - coming to grips with an inconvenient truth Keynote speech by Mr Frank Elderson, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the ECB, at the 14th European Bank Institute Policy Webinar on the ECB’s supervisory approach on climate-related and environmental risks, Frankfurt am Main, 14 March 2022. * * * Some years ago, Andrea Enria, the Chair of the Supervisory Board, gave a speech, precisely at an EBI conference, calling for greater transparency in prudential supervision. When describing the role of transparency and information disclosure, he echoed the words of Supreme Court Justice Louis Brandeis: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman”. This couldn’t be truer for climate-related disclosures, too. As I have said before when discussing the supervision and prominence of climate-related and environmental, or C&E, risks, we can only tackle a problem once we get a good grip on its shape and size. Some information may be uncomfortable to face up to – but bringing it to light is the first step in making progress. When it comes to climate change, the information on what Al Gore famously dubbed an inconvenient truth is indeed getting bleaker by the day. The most recent IPCC report confirms the dramatic consequences of not taking immediate action: additional global warming of up to 1.5 degrees Celsius in the near term would increase climate hazards, and present numerous risks to ecosystems and human society.

BIS Review 14/2001  7  The government’s asset position and wealth management  Government assets and liabilities Estimates in billions of NOK Assets  Liabilities  Petroleum Fund National Insurance Fund  390  Direct ownership  300  Bonds and Treasury bills  170  50  Minor holdings  100  State banks  165  The table shows in simplified form the central government’s financial assets and liabilities, with estimates for the balance at the end of 2000. The government’s most important assets are the Government Petroleum Fund, assets in the National Insurance Fund, and the state’s direct ownership interests in enterprises. The estimate for the government’s direct ownership in the table includes Statoil, Norsk Hydro, Telenor, Statkraft and DnB. In addition, the state has many smaller stakes and direct loans through the state banks. The government has loan debt. In the table, the figures for the National Insurance Fund are consolidated as the Fund’s claims on the central government and the central government’s debt to the Fund are offset. The table shows that the central government’s loans through the state banks are approximately the same as the central government’s loan debt. The central government raises loans in the bond market and lends through the state banks. The interest rate on the loans and the pricing of risk are market-related. If we exclude this credit intermediation, the management of government wealth is primarily linked to state ownership interests in the Norwegian business sector, the National Insurance Fund and the Government Petroleum Fund.
Given that the target of imminent euro adoption is gone, and the large euro zone nations do not provide real leadership on fiscal soundness, there is less incentive for some of the new member states to stick to the consolidation of their public finances from today’s deficits above 5 per cent of GDP. The consolidation plans are already too dependent on a continued upturn. Whether in the old or new member states, there is an additional problem, as we are entering a period of intensifying structural changes. Old industrial patterns in Europe are being changed when confronted with both the boost to productivity from IT, as partly realised since the late 1990s in the US, and globalisation and enlargement, all of which supports this process. These trends will eventually help productivity and growth in Europe to start to catch up with the US again. But in the short term the structural changes will lead to higher frictional unemployment as old industries are more rapidly replaced by new ones. In addition, the recent downturn never led to a dramatic increase in unemployment or decrease in employment in the euro area; hence, the upturn is probably also less likely to lead to rapid job creation. Both factors create new incentives for fiscal policy to focus more on short-term job creation schemes and less on long-term fiscal soundness. So from this perspective, too, the hope that the recovery alone will “fix” the European deficit problem might be too optimistic.

Jaime Caruana: 60 years after Bretton Woods - a central banker’s view Opening remarks by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Conference “Dollars, Debt and Deficits - 60 years after Bretton Woods”, Bank of Spain, Madrid, 10 June 2004. *  *  *  Mr Managing Director of the IMF, Mr Second Vice-President of the Government and Minister of Economy and Finance, ladies and gentlemen: It is a pleasure for me to welcome you all to the Banco de España and to the inauguration of this conference, which is jointly organised by the International Monetary Fund and the Banco de España in commemoration of the 60th Anniversary of the Bretton Woods Agreements. For our country, which previously hosted the annual meetings of the Fund and the World Bank on the occasion of the 50th anniversary of these agreements, in autumn 1994, it is a source of satisfaction that this meeting should be held ten years later in Spain. I am also particularly pleased to welcome our distinguished audience - both from Spain and abroad - of representatives from official institutions, from academia and the private sector, who are going to participate in the busy sessions scheduled over the next two days. The Banco de España and the International Monetary Fund are tied by long-standing and deep-rooted links.
These very solid foundations will help Hong Kong cope with the challenge of a possible rise in non-performing financial assets and losses in the financial markets. They also supply the conditions for moving beyond crisis towards opportunity, and for exploring what seems set to become one of the strongest and more interesting of growth engines in markets in this region and beyond: Islamic finance. Like most other asset classes, the growth of Islamic finance decelerated last year as a result of the global credit crunch and unfavourable economic conditions. New sukuk issuance retreated to $ billion last year, down from a high of $ billion in 2007. 1 And without a doubt, there will continue to be great challenges in the coming year. Market participants are reportedly expecting a slowdown in annual growth in global Islamic banking assets to 10-15% in 2009, compared with a growth of 20-30% last year. 2 Even so, a growth rate of 10-15% is robust by any standard, and especially so when set against the strong shrinkage in other areas of finance. There remains a healthy stock of sukuk issuance in the pipeline for this year, thus providing a good market to tap: one report conservatively estimates planned or announced sukuk for 2009 as being in excess of $ billion. 3 As a new asset class, Islamic finance practices banking and investments in compliance with the principles of Islamic Shariah law, which prohibits excessive leverage, risk-taking and uncertainty, and promotes ethical practices.

These are indeed universal principles in all markets – or at least they should be: one of the lessons of the present financial crisis is that too little attention has been paid to them. This is not to suggest that Islamic finance is without  1  Source: Bloomberg. 2  Source: "Islamic inroads" by AsiaRisk, February 2009. 3  Source: "Sukuk market declined sharply in 2008, but long-term prospects remain strong" by Standard and Poor's, Islamic Finance News, 6 February 2009. 2  BIS Review 19/2009  risk – indeed many of the risks inherent in Islamic finance are similar to those of conventional finance, and, in fact, Islamic financial institutions may be subject to other unique risks from the liquidity and operational perspectives. But Islamic finance introduces an alternative form of financing, and one that offers many opportunities particularly when financial market conditions start to improve. From the perspective of Hong Kong, we are optimistic that the coming together here of Islamic finance with development opportunities in neighbouring Asian markets and China will provide an exciting growth stimulus for financial market participants. A key part of the Government’s strategy for developing Hong Kong as an international financial centre is a focus on Islamic finance. In support of this initiative, the HKMA, in collaboration with the Treasury Markets Association (TMA), has devoted considerable time and resources into establishing an appropriate infrastructure framework and developing an education and awareness programme both locally and worldwide.
And at the Bank of England, we had recently created a directorate dedicated to ensuring financial market infrastructure, including payment systems, meet the necessary standards of robustness and resilience. Overall the pace of technical, structural and regulatory change in payments was poised to pick up. And I have not been disappointed with the level of ambition and innovation we have seen in the past three years. Collectively, we have been on a journey; inching and in some cases taking great strides towards a payments landscape that is competitive, resilient and ready for the future. But, while considerable progress has been made, the journey to best in class payments is far from complete. Whilst important milestones have been reached, many more lie ahead. For example, one catalyst for change in UK retail payments was the creation of the Payments Strategy Forum (PSF) in March of 2015. And, with the formal consolidation of the Bacs and Faster Payments systems into the New Payment System Operator (NPSO) just last month, we can say that a key recommendation of the PSF has been delivered. But the NPSO now needs to turn its attention to developing and implementing the remaining critical recommendations which I will come on to discuss. We now need, collectively, to refocus our energies for the next leg of this journey towards best in class payments.

One of our colleagues did not meet these high standards recently. Our newly appointed Deputy Governor for Markets and Banking, Charlotte Hogg had previously not disclosed a relevant family relationship, as was required under our staff Code of Conduct. For those who have questioned whether we “get it”, we do. We know this honest mistake was also a serious mistake – one that was compounded by the fact that Charlotte Hogg had overseen the development of our new Code. We were clear upfront that there must be consequences for both her and the Bank. Our minimum response would obviously be what we would expect to see in the firms that we supervise. Let’s be absolutely clear about this baseline. In analogous situations in the private sector, we expect:   Evidence that the firm is taking the matter seriously;    Proportionate consequences for the individual, including some form of disciplinary warning and possibly some impact on remuneration; and    A wider review of lessons learned if there was any evidence that there was a systemic problem. 9  See page 16, Financial Reporting Council (FRC), “Corporate Culture and the Role of Boards: Report of observations”, July 2016. See Footnote 7 for details. With appropriate modifications to reflect the fact that it has a very different range of functions to a commercial bank and is accountable to a different range of stakeholders, including Parliament.
5 Ivashina and Scharfstein (2010) document a sharp contraction in new loans to large borrowers during the peak of the financial crisis with a 47% quarter-on-quarter fall from Q3-Q4 2008. 6 Brooke et al (2015). 7 Haldane (2013) for instance argues that “We need to build defences to protect against the collateral damage from financial flood. We need to be popping, not mopping”. 8 Consistent with that, the FPC is not authorised to take actions that would “have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”, Financial Services Act (2012), Section 9C; see http://www.legislation.gov.uk/ukpga/2012/21/pdfs/ukpga_20120021_en.pdf. 9 The Bank of England published a staff paper in 2015 that sets out a framework for measuring the macroeconomic costs and benefits of higher bank capital requirements. See Brooke et al (2015). 10 Brooke et al (2015) estimate that a1percentage point increase in risk-weighted capital ratios will result in a 10 basis point increase in lending rates. This estimate includes a partial offset due to the Modigliani Miller (1958) theorem, under which the capital structure has no impact on funding costs as more equity makes debt safer and equity less volatile, lowering the required rate of return for both. The conditions for the full offset in the theorem are unlikely to hold in practice for banks.

Ladies and Gentlemen, it is also our expectation that the bank will continue to support the SME sector in Zambia, as the SME sector is key to sustainable economic growth and development of the country. You will agree with me that SMEs have the potential to create many productive jobs and contribute significantly to our economy, if well supported. It is our expectation that Absa Group Limited, through Barclays Zambia, will continue with its efforts and strategies that promote financial system stability, support monetary policy, enhance financial inclusion and gender mainstreaming for sustainable development in line with the Bank of Zambia’s strategic objectives. Today, as we commission this site, it is my hope that the facility will be of highest standards and that the new premises will provide an environment for the provision of innovative financial solutions to the public as an endorsement of the Absa Group brand promise “Bringing Possibilities to Life.” Master of Ceremonies, distinguished guests, ladies and gentlemen, with these remarks, please join me in applauding the Board, management, and staff of Barclays Bank Zambia, and Absa Group Limited, for this initiative that will introduce convenience and world class banking services and facilities to its clientele. The timing of this project is also a good indication that the Absa Group is opportunity focused rather than challenges. We hope this will rub on to the other players in our economy as well. Thank you and God bless.
It reduces companies’ average costs and so protects their profitability during the period of weak demand. A by-product of this adjustment, however, is that the marginal cost of producing additional output is higher. Although the mothballed capacity can be reinstated, it is likely to be more costly to do so, especially in the short-run, than if the resources were simply standing idle. Assembly lines need to be serviced before being restarted; staff need to be brought back from sabbaticals. As a result, the downward pressure on costs and prices stemming from the latent spare capacity within companies, at least in the near term, is likely to be less. 6 Developments in margins Consider next the mark-up over and above costs that companies include in their selling price. In the past, margins in the UK have tended to fall back during periods of weak demand and vice versa. 7 One possible reason for this is if companies reduce their prices relative to their costs when demand is weak in order to gain market share which they hope to hold onto as demand increases, ie they hope to be able to exploit some degree of pricing power. If successful, the lower profits in the downturn are outweighed by the gains during the upswing. This pro-cyclicality of margins is another reason why inflation in the UK has tended to moderate during periods of weak demand. But margins appear to have fallen by less during the recent recession than expected given the marked contraction in demand.

My central view is that the peak impact of the past depreciation on inflation has probably passed – monthly goods price inflation has slowed in recent quarters and the total adjustment in relative prices is similar to previous exchange rate changes. But there is considerable uncertainty surrounding this judgment and it is quite possible that there may be further significant upward pressure on prices to come. The increase in prices associated with the combination of the rise in oil prices, the changes to VAT, and the past depreciation of sterling is more than sufficient to explain the strength of inflation relative to target. Moreover, the fact that some of these factors were not predictable in advance and that their implications for inflation – particularly so in the case of the exchange rate – appear to have been greater than initially anticipated, can also help to account for the upside surprises in inflation. But the exact contribution from these price-level shocks is uncertain and it is possible that the other factors identified by the pricing framework also contributed to the surprising strength of inflation. The impact of spare capacity on costs and prices Consider first the impact of spare capacity on costs and prices. There are good reasons to believe that a substantial margin of spare capacity opened up during the recession and remains today.
In the initial years under the fiscal rule, petroleum revenue spending rose approximately in pace with the GPFG’s capital. The fiscal rule, based on a real return of 4 percent, thereby provided an effective constraint on petroleum revenue spending over the fiscal budget. In recent years, high oil prices and solid returns have resulted in strong growth in the value of the GPFG. This has provided scope for substantial increases in petroleum revenue spending, although spending has been around 3 percent of the GPFG’s value in recent years. In a period of low unemployment and solid economic growth, it has been appropriate to set aside a greater share of the revenues. Recent years have been characterised by wide fluctuations in returns, with extreme variability during the financial crisis. Volatility on the world’s stock exchanges and in financial markets impacts the market value of the GPFG and thereby the anchor for fiscal policy. Although the depreciation of the krone has increased the GPFG’s current value in krone terms, this veils the fact that its international purchasing power is unaffected by changes in the krone’s value. Such volatility has become more difficult to manage as the GPFG has grown in size. Oil prices have fallen sharply over the past six months. Even if prices edge up again, we have been reminded of the uncertainty associated with future revenues. Lower oil prices imply slower growth in the GPFG than previously estimated.

Lorenzo Bini Smaghi: On the occasion of the inauguration of the Euro Exhibition in Rome Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the inauguration of the Euro Exhibition, Rome, 3 April 2009. *  *  *  Dear Fabrizio, Ladies and Gentlemen, It is a pleasure for me to be here in these wonderful premises of Banca d’Italia in Rome to celebrate with you the occasion of the 10th anniversary of Stage Three of the Economic and Monetary Union (EMU) and of the adoption of the euro. We are also here to inaugurate “The Euro Exhibition”, presenting the euro banknotes and coins through a range of innovative features, which we hope will be appreciated by the public in Rome. 1. First 10 years of the euro  On 1 January 1999 the Third Stage of EMU began with the irrevocable fixing of the exchange rates of the currencies of the 11 Member States initially forming the euro area. Monetary authority for the new currency was transferred to the Governing Council of the European Central Bank. The euro became the currency of over 300 million citizens of Europe. The number of countries participating in the EMU grew over the years. Today, euro banknotes and coins are legal tender in 16 of the 27 Member States of the European Union, and used by almost 330 million citizens in the euro area. Slovakia has recently become the 16th member of the euro area.