samchain/econo-pairs-v1 huggingface dataset:
Partly because I know some banks are acting against a base case of contraction. And partly because some of the funding could be used to refinance existing loans at cheaper rates. But also in the first instance, we have set it up so that the funding can be drawn down in advance or as it is needed, not with a delay. That is just one of the features designed with the macroeconomic benefits in mind. At every stage we asked ourselves how the design choice would best support lending growth. I believe we have made the right choices. BIS central bankers’ speeches  11  I would like to conclude by noting that one lesson from the crisis is just how important it is to have a properly functioning financial sector, expert in allocating savings to consumption and investment. Financial markets are not there to line the pockets of the participants. They exist because there are social and economic benefits from the services they provide. I believe most of the industry understands and accepts this. We need to focus on policies which encourage those benefits. For policy to be effective, it also needs to be joined up. The FLS, jointly launched by Bank and HM Treasury, and with supporting actions from the MPC, the FPC and the FSA shows that the new arrangements among these authorities can ensure that policies work together to get the economy back on track to meet the objectives of low and stable inflation, sustained growth and financial stability.

We as a central bank also vested enormous efforts making many adjustments in data collection, production and communication process that helped us smoothing the pandemics effect on the production and dissemination of statistics. The pandemic in the initial phase tested the resilience of the statistical system, i.e., the ability to continue with timely supply of statistical data. But it also created demand pressures for new data that was not produced by the official statistics. Data on the epidemiological curve became highly needed as they are leading indicator on how the economy will evolve and how economic and social policies should be calibrated. At the same time, there has been growing demand for real-time high-frequency data on the economy, as many of the historical systematic linkages that policy decisions were based on were broken. For instance, we have been intensively using google mobility data during the lockdowns to assess the behaviour of consumers. We have also leveraged on the private sector data for payment card transactions, as an indicator to assess the personal consumption dynamics and its structure. Although highly useful, the abundance of data also poses a challenge for statisticians, as accentuated by the health crisis. As we go further down the road, the need for quick and granular data, for example on the changes of the economic behaviour of the agents, the longer term scarring to the economy, or the impact of the policy actions on economy will be a "must".
The inflation target is an anchor for inflation expectations in the foreign exchange market, for the social partners in connection with wage settlements and for those setting prices for goods and services. In recent years, average inflation has been fairly close to, but somewhat lower than, the target of 2.5 per cent. Consumer price inflation peaked in October 2008 and has since receded. In the year to August 2009, CPI inflation was 1.9 per cent. Inflation measured by the CPI varies somewhat from month to month, primarily reflecting wide fluctuations in energy prices. CPIXE inflation shows developments in the consumer price index adjusted for tax changes and excluding temporary changes in energy prices. This indicator provides a more accurate picture of underlying inflation. By this measure, underlying inflation peaked at 3 per cent last autumn, but has since slowed somewhat and was 2.3 per cent in August. Underlying inflation is now below the inflation target. Inflation is slowing as a result of the decline in output and wage growth last year and the beginning of this year and is expected to fall to below 2 per cent in early 2010. Inflation ahead will depend on how quickly capacity utilisation picks up and by developments in the krone exchange rate. Activity in the Norwegian economy has held up better than expected just a few months ago. Higher capacity utilisation and low productivity growth may result in stronger-than-expected upward pressure on costs and point towards somewhat higher inflation in the medium term.

In the case of payments, that key risk is money laundering and terrorist financing (ML/TF), and the balance that we have to strike is to allow new e-wallet businesses to start quickly, but also ensure that ML/TF risks are managed before they get too large. In this context, while KYC continues to be a key requirement, we allowed smaller wallets holding funds of no more than $ to carry out simplified KYC requirements. This framework is similar to those used in other markets like Hong Kong, India, Australia and the UK. Finally, as a market, how do we ensure that e-payments function smoothly with each other and the financial system? Many of us think of smooth functioning as having liquidity 13.  providers in capital markets through volatile periods. That is because capital markets are welloiled systems that interoperate between banks and trading venues, and even among banks. Not so with e-payments. E-payments have grown quickly because they have been able to develop their own systems quickly – but this has resulted in some fragmentation. Although the vast array of 14.  payment solutions offers more choices to consumers and merchants, too much choice is not always a good thing: a. Consumers may end up holding three or four different e-wallets in order to get the best deals from each: one for transport, one for shopping, and another to split bills with friends.
The national payment system is the backbone of a country’s monetary and financial system and it plays a critical role in a country’s economic development. It is through the payment system that money is transferred between savers and lenders, buyers and sellers or from one point to another. Developing a national payment system is an ongoing process. By reforming and developing the national payment system, it is possible to reduce the overall transaction costs and expand opportunities for commercial and financial transactions in an economy. In recent years, there has been a rapid acceleration in fundamental reforms to national payment systems worldwide, although the pace of implementation of reforms in different countries has been uneven. Planned outcomes have not always been achieved in terms of expected use, benefits or costs of payment system reform projects and many planned reforms have been unexpectedly slow to complete. In its modernization programme which commenced in 2001, the Central Bank refocused on its core objectives, i.e. the economic and price stability and the financial system stability. The financial system stability objective encompasses a wide range of subjects of which, the establishment of a safe and sound payment system was seen crucial for the development of the financial sector, which is also complementary to the maintenance of price stability. In this context, the Central Bank examined the adequacy and the efficiency of the payment system to satisfy the needs of an evolving economy and decided to undertake comprehensive payment reforms.

To underpin the payment reforms undertaken by the Central Bank and enhance integrity and safety of such systems, a comprehensive legislation to govern payment, clearing and settlement systems in general and to provide the Central Bank with oversight and regulatory powers over various payment systems and money transfer service providers has been enacted through the Payment and Settlement Systems Act of 2005. The Act empowered the Central Bank to be the authority responsible for the national payment system, which requires oversight and continuous surveillance of all payment systems to ensure its efficiency and effectiveness. The systemically important payment systems will be reviewed periodically to ensure that the design and operation meet with international standards and best practice. Some of you may be aware that a couple of months ago, the Central Bank established a National Payments Council which is the highest decision making body with regard to payment systems. This committee represented by all stakeholders provides a forum for constant dialogue on payment issues to take place within the industry. The National Payments Council is responsible for developing the payment and settlements infrastructure in collaboration with all the relevant authorities and stakeholders. Currently, it is in the process of finalizing a road map for the development of the national payment system in the next five years, which will be in line with the vision of the financial sector.
Looking ahead, they are likely to stay above 2% for some months to come, before falling below 2% in the course of 2012. Inflation rates are expected to remain in line with price stability over the policy-relevant horizon. This pattern reflects the expectation that, in an environment of weaker euro area and global growth, price, cost and wage pressures in the euro area should also moderate. The Governing Council continues to view the risks to the medium-term outlook for price developments as broadly balanced, taking also into account today’s decision. On the upside, the main risks relate to the possibility of increases in indirect taxes and administered prices, owing to the need for fiscal consolidation in the coming years. In the current environment, however, inflationary pressure should abate. The main downside risks relate to the impact of weaker than expected growth in the euro area and globally. In fact, if sustained, sluggish economic growth has the potential to reduce medium-term inflationary pressure in the euro area. Turning to the monetary analysis, the annual growth rate of M3 increased to 3.1% in September 2011, up from 2.7% in August. The annual growth rate of loans to the private sector, adjusted for loan sales and securitisation, was 2.7% in September, unchanged from August. As in August, inflows into M3 also reflect the heightened tensions in some financial markets. In particular, inflows into money market fund shares/units, as well as into repurchase agreements conducted through central counterparties, appear to have significantly affected monetary developments in September.

While inflation has remained elevated and is likely to stay above 2% for some months to come, inflation rates are expected to decline further in the course of 2012 to below 2%. A cross-check with the information from our monetary analysis confirms that the underlying pace of monetary expansion continues to be moderate. After today’s decision, inflation should remain in line with price stability over the policy-relevant horizon. Owing to their unfavourable effects on financing conditions and confidence, the ongoing tensions in financial markets are likely to dampen the pace of economic growth in the euro area in the second half of this year and  2  BIS central bankers’ speeches  beyond. The economic outlook continues to be subject to particularly high uncertainty and intensified downside risks. Some of these risks have been materialising, which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012 very likely. In such an environment, price, cost and wage pressures in the euro area should also moderate; today’s decision takes this into account. Overall, it remains essential for monetary policy to maintain price stability over the medium term, thereby ensuring a firm anchoring of inflation expectations in the euro area in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to make its contribution towards supporting economic growth and job creation in the euro area.
BIS Review 28/2007  7  The experience of previous business cycles has shown that wage and price inflation may increase markedly in a late phase of the upturn. Higher interest rates will counter such a development. However, we must also prevent inflation from becoming entrenched well below 2.5 per cent. We will therefore be mindful of the effects of higher interest rates on the krone exchange rate when inflation is low. Positive supply-side conditions that have held down inflation so far suggest a gradual approach, so that we can assess the effects of interest rate increases and other new information on economic developments. At the meeting on 15 March, Norges Bank’s Executive Board presented the interest rate path shown in the chart. The Board decided that the key policy rate should lie in the interval 4-5 per cent in the period to the publication of the next Monetary Policy Report on 27 June, conditional on economic developments that are broadly in line with projections. Furthermore, the key policy rate is expected to move up to about 5 per cent around the end of 2007. Economic developments are uncertain. The uncertainty surrounding the interest rate ahead is illustrated by the shaded area in the chart, which is intended to capture the outcome with a 70 per cent probability. Long-term interest rates, income growth and house prices Favourable economic developments in Norway have had an impact on developments in our property markets. House prices have risen sharply over the past 14 years.

It is higher than in Sweden and the UK, but lower than in Denmark and the Netherlands. Norway is among the countries with the highest share of owner-occupied dwellings, at around 80 per cent. This high proportion partly accounts for the high mortgage debt of households. In recent years, new loan products have also been launched, facilitating mortgage equity withdrawal. Housing wealth has become more liquid. Borrowers have greater scope for choosing repayment profiles. We cannot identify the exact level of household debt that can be sustained over time, but the rapid build-up of debt makes households more vulnerable. BIS Review 28/2007  11  Housing investment for the household sector as a whole is now being fully debt-financed, which means an increase in net debt. It would appear that household saving has fallen markedly in Norway in the recent past. Saving was negative in the latter half of 2006, which is the first time saving has fallen since 1988. The pronounced fall in saving indicates that households are taking greater chances. At the same time, government revenues and savings are high. The long period of prosperity and government budget surpluses may have engendered a sense of security which is also affecting household saving and house purchases. Petroleum and the Government Pension Fund – Global  High oil and gas production and high prices, combined with high returns, have resulted in a rapid rise in the value of the Government Pension Fund in recent years.
In respect to the conditions prevailing in Malaysia, Malaysia's strong economic fundamentals, with low rate of inflation, strong external balance, low level of foreign debt, strong reserves levels and strengthened banking sector have provided strong support for the pegged exchange rate regime. Malaysia also has sufficient flexibility to undertake adjustments on all sectors of the economy to remain competitive. The diversified economic structure, the enhanced mobility of capital and labour has also provided Malaysia with increased resilience to weather external shocks. Malaysia also had the flexibility of policy to respond to the circumstances. In all cases, when an exchange rate regime has failed, it was not due to the regime itself, but due to the weaknesses in the economy and the financial system. Having undergone significant transformation and emerging with a much strengthened set of fundamentals, the Malaysian and regional economies are better able to absorb the volatility in the exchange rates. Countries are also more cognizant of the costs of currency depreciation, particularly on confidence. As an example, comparing the response of regional currencies during the two episodes of yen depreciation, one in the early part of 2001 and the other towards the end of 2001 and early 2002, it is clear that the response of regional exchange rates was significantly more muted during the most recent episode.

This workshop will help us learn from other practitioners' experiences who have already tackled some of the issues we are due to solve or are in the process of doing so. I wish you all a very productive rest of the day discussing about these issues. Thank you. 3/3  BIS - Central bankers' speeches
The mean squared gap for inflation is calculated as   [ (t   , t )   *] / (T  1) , where π(t+τ,t) denotes the forecast in quarter t of inflation in quarter t +  and T  2  0  *  denotes  the  inflation  target.  0 [ y(t   , t )  y *(t   , t )]2 / (T  1)  The  mean  squared  gap  for  output  is  calculated  as  T  , where y(t+τ,t) denotes the forecast in quarter t of output in quarter t + τ and y*(t+τ,t) denotes the forecast in quarter t of potential output in quarter t + τ, and T is the forecast horizon (normally 12 quarters). 4  BIS central bankers’ speeches  inflation target of 2.5 percent but resource utilization worse (better). The Qvigstad (2005) necessary (but not sufficient) condition for optimal policy is satisfied, namely that the inflation gap and the output gap should be of opposite signs. The bottom left panel, with the mean squared gap for inflation plotted along the horizontal axis and the mean squared gap for output plotted along the vertical axis, has been added by me. The closer the mean squared gap for inflation and output is to zero, the better inflation or the output gap is stabilized.

However, let us suppose that the appropriate and effective instruments for ensuring financial stability are not available, for instance because of serious problems with the regulatory and supervisory framework that cannot be remedied in the short run. In such a second-best situation, if there is a threat to financial stability, one may argue that, to the extent that policy rates do have an impact on financial stability, this impact should be taken into consideration when choosing the policy-rate path to best stabilise inflation and resource utilisation. Such considerations could result in a lower or higher policy-rate path than otherwise, in order to trade off less effective stabilisation of inflation and resource utilisation for more financial stability. 2 To the best of my knowledge, the evidence so far indicates that in normal times such a trade-off is very unfavourable, in the sense that the impact of policy rates on financial stability is quite small and the impact on inflation and resource utilisation is significantly greater. Then, in normal times an optimal trade-off would still result in policy rates directed towards stabilizing inflation and resource utilization with little impact on financial stability. In particular, it seems clear that monetary policy should not be used to target housing prices. A considerable amount of research has concluded that policy rates have a modest impact on housing prices but a substantial impact on output, implying high real costs for using the policy rate for this purpose (Assenmacher-Wesche and Gerlach 2010).
One important factor was that many low-productivity firms went bankrupt in connection with the sharp economic slowdown at the beginning of the 1990s, while other firms implemented cutbacks of lowskilled labour that had less qualified tasks. When the economy began to grow again there was plenty of unemployed labour, and it was possible to attain high growth without inflation gathering pace. Another cause was the IT boom towards the end of the 1990s, which also contributed to productivity growth. In the years ahead, we can also expect to have good productivity growth in Sweden. Increases in productivity growth can be a solution for large parts of the corporate sector, but this is less often the case for parts of the public sector. Quality care and education often require a strong presence of human labour. Nevertheless, there is probably much to be gained by organising and financing the public sector in new ways. The contribution made by trade union organisations in this regard could prove to be a decisive success factor. Here, the Nordic countries have an advantage over others through a high degree of organisation and an established cooperation between employers and employees. The education sector also faces considerable challenges. When the current generation of teachers in Sweden retire, a substantial increase in new teachers will be needed. According to the National Labour Market Board, the number of new recruitments required to replace retired teachers is forecast to come to around 100,000 up to and including 2015.

Thus in the period 19942006, the cumulative appreciation of the real effective exchange rate ranged from 8% in Slovenia to 105.9% in Lithuania. 8 Economic theory offers arguments that real exchange rate appreciation is not dangerous as long as it reflects changes in the equilibrium real exchange rate. However, policy makers in these countries, especially in the recent years, are not really comforted by these theoretical discussions which consider that real appreciation is only movement to equilibrium. What they are seeing in their countries are common signs of overheating of the economy and loss of competitiveness, which deepens the external imbalances. In the beginning of transition, current account deficits were understandable and not too much cause for concern, as these countries were importing technology and previously unavailable goods. However, the size of the deficits in the last several years exceeds the level that is usually deemed sustainable. Thus, the current account deficit in the new member states in the period 1996-2005 ranged from 5% to 7.7% of GDP, but in the last two years it has been reaching 10.1% and 11.3% of GDP. The average current account deficit in the SEEU countries in the same period is even higher, and it is estimated that in 2007 it will reach 16.3%. 9 Even though deficits are projected to fall in some of the countries, in general they remain a cause for concern in most of them. Besides the trade deficit which,  7  Source: IMF World Economic Outlook Database, April 2008. 8  Source: Eurostat.