samchain/econo-pairs-v1 huggingface dataset:
But this carries risks to central bank credibility if circumstances change and no longer warrant sticking to the commitment. 2  BIS central bankers’ speeches  On the other hand, if guidance is conditional, it will have less impact and introduce volatility as markets permanently reassess the economic situation and assess the probability that the central bank will change its policy. Second, if central banks opt for conditional forward guidance, should it be “time contingent” – with time or dates references for future actions – or “state contingent” – dependent on the situation of the economy? Time contingent forward guidance runs the risk of being undermined by changes in the economic situation. “State contingent” forward guidance may appear better. Experience shows, however, that it is also more complex to manage especially when choosing the “triggers” or “thresholds” attached to commitments for the future. Partly as a result of the crisis, major structural changes are taking place in most advanced economies. Overall, the relationship between major macroeconomic variables are becoming unstable which makes it difficult to calibrate monetary policy on a limited number of parameters, such as, for instance, the unemployment rate. Nowhere are these changes more profound than in the euro area, where structural change is taking place at an accelerated pace as a result of the crisis and adjustment policies undertaken in Member States. We have taken stock of all these experiences and lessons in devising our approach to forward guidance in the euro area.

We have achieved a lot by creating the banking union and the SSM in less than two years – which is unprecedented in European history. Also, the process of balance sheet repair for banks is well underway in the euro area And we will make sure that the forthcoming asset quality review removes any doubt as to the sustainability of the euro banking sector. Furthermore, for the euro area, there is the exchange rate question. As you all know, from a monetary policy perspective, the exchange rate is not a policy variable, let alone a target. But  BIS central bankers’ speeches  1  it is obviously a very important input when considering overall monetary and financial conditions. The recent appreciation of the euro has had a strong disinflationary impact. We could discuss further the different causes of low inflation in the debate, but let me make some remarks on this crucial matter for us central bankers. First, low inflation is not deflation. As many analysts and observers are today alarmed about deflation in the euro area, it is useful to understand the difference. Deflation is a permanent and cumulative process of decrease in the overall price index, fuelled by negative expectations. Deflation is a pernicious spiral. Because consumers expect prices to decrease continuously, they tend to defer purchases, thereby further fuelling the deflation process. Deflation increases the real burden of debt and creates an incentive to defer investment.
Excluded observations account for approximately 0.5% of the entire sample. Notes: For all models, the dependent variable is “failure”. Standard errors are shown in brackets. 26  (*)  Significant at the 10% level  (**)  Significant at the 5% level  (***)  Significant at the 1% level  BIS central bankers’ speeches  Table 6: CAMEL-based determinants of bank failure for FDIC-insured banks(a) Variable Risk-based capital ratio Asset quality Efficiency ratio Return on assets Liquid asset ratio McFadden R2 Likelihood Ratio (Chi-square)  Coefficient –0.04*** (0.01) 0.05 (0.03) 0.001 (0.001) –0.16** (0.07) –0.07*** (0.01) 0.075 261.12***  (a) Sample excludes outlier banks with very large risk-based capital and leverage ratios. Excluded observations account for approximately 0.5% of the entire sample. Notes: For all models, the dependent variable is “failure”. Standard errors are shown in brackets. BIS central bankers’ speeches  (*)  Significant at the 10% level  (**)  Significant at the 5% level  (***)  Significant at the 1% level  27  Chart 1: Number of employees in UK regulatory (a) bodies and the finance industry, 1979–2012  Chart 2: Number of employees in US Federal regulatory bodies and number of commercial (a) banks, 1935–2010  Source: Bank of England, Securities and Investment Board, Financial Services Authority annual reports, Capie (2010), Office for National Statistics and Bank calculations.

Major attractions include the Victoria Falls (one of the seven natural wonders of the world) and the Kariba Lake (one of the largest man-made lake). Specific areas of investment in this sector include: •  Game ranching;  •  Provision of accommodation (i.e. high quality five and four star hotels, Lodges and Camp sites near the popular tourist areas);  •  Transport service – Investment potential exists in air charters in form of helicopters and/or small planes to service game areas;  •  Adventure holiday packages;  •  Organised tours;  •  Out door sports facilities (golf courses and stadia); and  •  Zambia’s cultural heritage. 3.6  Construction and real estate  The construction sector is yet another area of investment as the economy expands. A lot has been done in the recent past in construction with housing schemes coming up in various parts of the country. However, there is still a large deficit in terms of housing in Zambia. This deficit in housing provides an opportunity for further investment in the construction of more houses. 4.0  Conclusion  Looking ahead, the achievement and maintenance of a low and stable inflation rate, remains key to enhancement of investment, business planning, confidence in the economy, maintaining external competitiveness and stabilising people’s incomes. In the medium-term, Government continues to pursue market and structural reforms in partnership with the private sector with the view of consolidating the gains so far attained for sustained economic growth and development.
The fall in the last quarter of 2010 would reflect the base effects caused by the indirect tax hikes and the sharp increases in food prices that occurred during the last quarter of 2009. Similarly, the impact of the tax hikes, which added around 1.9 percentage points to headline inflation in the first quarter of 2010, would largely disappear during January and February of 2011. Accordingly, inflation would fall to 8.4 percent at end-2010, and display a significant drop during the first quarter of 2011, converging to levels consistent with the targets (Table 3). Afterwards, with the transmission of the lagged impact of the envisaged monetary tightening, inflation is expected to further decline and stabilize at around 5 percent over the medium term. The projection that inflation would remain at elevated levels – albeit temporarily – over the forthcoming period, highlights the importance of expectations management. As of April, medium-term inflation expectations are significantly above the revised inflation forecasts (Table 3). In this respect, it is critical that economic agents, with an awareness of temporary factors, focus on medium-term inflation trends, and therefore, take the inflation targets as a benchmark for their pricing plans and contracts. At this point, I would like to emphasize once more that any new data or information regarding the inflation outlook may lead to a change in the monetary policy stance. Therefore, I would like to particularly highlight that assumptions regarding future policy rates underlying the inflation forecast should not be perceived as a commitment on behalf of the CBT. 4.

However, owing to the effects of tax hikes, increases in food and energy prices, and base effects, the inflation rate is hovering significantly above the target, which is having an adverse impact on inflation expectations, and leading to risks regarding pricing behavior. Therefore, the revised forecasts are based on the assumption of gradually withdrawing the excessive amount of liquidity provided to the market, and increasing policy rates at a measured pace starting in the last quarter of 2010. However, based on the prediction that resource utilization will likely remain at low levels for sometime, the baseline  scenario envisages that the increases in interest rates would be limited with policy rates remaining at single-digit levels throughout the forecast horizon. As shown in the slide, inflation will follow a volatile path throughout 2010 owing to the base effects driven by the temporary tax cuts and unprocessed food price fluctuations that occurred during 2009 (Figure 34). The temporary tax cuts implemented in March 2009, which were withdrawn partly in June and fully in October, would cause headline inflation to increase during March and April, and to decrease during June, July and October of 2010. Accordingly, inflation is expected to increase slightly during the second quarter and then fluctuate at around 10 percent in the third quarter (Figure 34). Inflation is expected to drop significantly in the last quarter of 2010 and the first quarter of 2011 (Figure 34).
Kredittilsynet’s analyses showed that Norwegian banks are not directly exposed to the subprime market and that they have limited exposure to hedge funds. Norwegian banks have some indirect exposure through their regular connections with foreign banks and credit institutions that are more exposed to subprime mortgages and hedge funds than their Norwegian counterparts. However, general liquidity problems in international money markets might also affect Norwegian banks and lead to higher funding costs. To some extent, this has in fact happened. Norwegian money market rates have risen relative to the risk-free interest rate, but less than in the major economies. It is uncertain how sensitive risk premia will be in the event of higher demand for funding. The price of obtaining dollar liquidity seems to have increased, and this also affects Norwegian banks. Since the end of June, the yield curve in the Norwegian money market has become steeper at the short end. Two- and three-month rates have risen more than the other money market rates in this period. We do not know how long the turbulence will last or what the consequences will be for the real economy. So far, the turbulence has not resulted in substantial reassessments of the international outlook for economic growth. The OECD has revised down its growth estimates for 2007 somewhat, particularly for the US and some European countries, and the IMF has indicated that it will do the same.

It must also be expected that there will be strong focus on liquidity risk by financial institutions and supervisory authorities, and not least in the work on international regulations in the period ahead. Thank you for your attention. BIS Review 100/2007  7  8  BIS Review 100/2007  BIS Review 100/2007  9  10  BIS Review 100/2007  BIS Review 100/2007  11  12  BIS Review 100/2007  BIS Review 100/2007  13  14  BIS Review 100/2007  BIS Review 100/2007  15  16  BIS Review 100/2007  BIS Review 100/2007  17
An important implication of the duration channel is that it is not purchase flows that matter, but rather the stock of assets that the central bank is expected to hold on its balance sheet. [26] For instance, if the central bank announces a longer reinvestment horizon, it means that more duration risk is expected to be withdrawn from the market over a longer interval. The duration withdrawal leads to declining expected excess returns in the future. But those future excess returns are part of the current term premium embedded in a long-term bond. It follows that a longer reinvestment period in the future helps keep bond yields at low levels now. Similar to analysis that accompanied the asset purchases of the Federal Reserve, ECB economists have quantified the effect of our asset purchases on the yield curve. [27] Based on a term structure model that incorporates the duration extraction channel that I just explained, Chart 8 shows estimates of how much the APP has compressed the yield curve in the euro area at different points in time. Chart 8 APP impact on the euro area sovereign term structure (basis points)  Sources: ECB, based on Eser et al. (2019).

As of 2016, it is the yield of a 20-year zero coupon bond. For Germany, the series is the rate on a government bond or similar government debt instrument with 5-15 year maturity,  derived from a variety of historical sources by Jordà et al. (2019). As of 1972, it is the ten-year German Bund rate. For the US, the series is the rate on government bonds with around ten-year maturity, provided by Jordà et al. (2019). As of 1960, it is the ten-year government bond rate. The euro area OIS rate is for ten-year maturity. Latest observation: 11 November 2019. Chart 2 Yield curve slope and recessions in the euro area (percentage points)  Sources: CEPR, OECD, ECRI, Bundesbank, Thomson Reuters and ECB calculations. Notes: The slope of the yield curve shown is the spread between ten-year and one-year OIS yields since 1999. Before 1999, the spread is based on German bond data. German data back to 1972 are computed by the Bundesbank using the method of Svensson. German data prior to 1972 are extrapolated backwards based on historical series of short and longterm yields provided by the OECD. Long-term OECD yields refer to yields on outstanding listed federal securities with residual maturities of over nine to ten years traded on the secondary market. Short-term OECD yields are usually either the three-month interbank offered rates applicable to loans between banks, or the rates associated with Treasury bills, certificates of deposit or comparable instruments of three-month maturity in each case.
A remarkable growth in trade However, in one area the figures show clearly how great the changeover has been: trade. Many who have not had the opportunity to study the former planned economies in central and eastern Europe believe that they, for historical reasons, are fairly closed and that their trade is relatively Russiaoriented. In actual fact, the candidate countries are among Europe's most open economies, with a larger percentage of trade in their GDP, and a larger percentage of this trade with EU countries, than many EU countries have themselves. The EU's trade with the 10 candidate countries is increasing more rapidly than that with any other geographical area in the world. During the period 1995-2000, i.e. in just five years, this trade has doubled. The percentage of intermediate goods (components) for western companies is growing, as is the percentage of goods with a high technology content. There are numerous examples of how eastern European companies are specialising to adapt to sophisticated co-operation with western European companies. Hungary is now competing with Ireland to attract the assembly of computers and cars, Estonia is a large sub-contractor to both Swedish clothing firms and to Ericsson, Nokia and their suppliers. st  Eastern Europe may be Europe's major opportunity at the beginning of the 21 century, after having trailed behind the USA in terms of growth at the end of the 1990s.

Likewise, exports from EMEs to EMEs increased from $ trillion to $ trillion during the same period. The increase in the volume of trade among EMEs has, to some extent, reduced the adverse effects of the weak course of external demand from advanced economies. Thereby, production and employment levels in EMEs have achieved a rapid pace of recovery after the 2008 global crisis. In line with the increased importance of these economies, we also witness significant changes in decision-making mechanisms worldwide. A wide range of important decisions on issues ranging from food and energy security to strengthening the global financial system are made at the Group of Twenty (G20). In line with the recent increase in their role in the G-20, the voice and representation of EMEs among international institutions such as the IMF, the World Bank, the Basel Committee and the Financial Stability Board is increasing as well. Distinguished Guests, EMEs withstood the global turmoil better than expected. A certain degree of decoupling has been observed between emerging and advanced economies in this regard. Underlying this resilience were several distinct factors, including sound fiscal fundamentals, a relatively low degree of leverage in the private sector, a lower reliance on wholesale funding as part of a more traditional banking business model and minimal exposure to toxic financial products. Improvements in the financial sector regulation and supervision frameworks have also added to this resilience. Although EMEs proved resilient during the global financial crisis, they have experienced new challenges in the aftermath of the crisis.
Norman T L Chan: HKMA and the protection of bank customers Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the KPMG Luncheon Talk, Hong Kong, 11 July 2013. *  *  *  Ayesha (Macpherson Lau), distinguished guests, ladies and gentlemen, First of all, let me thank Ayesha and KPMG for inviting me to this Luncheon Talk. When I took up the post of the Chief Executive of the HKMA in 2009, we were faced with the aftermath of the Lehman Brothers saga. As most of you would remember, there was immense public pressure on enhancing the protection of consumers and investors. My colleagues in the HKMA and I have regarded this as one of our priority areas and we have put our hearts and souls into strengthening our regime on banking conduct supervision in the past few years. In 2010, I set up two new departments, namely the Banking Conduct Department and the Enforcement Department, within the HKMA. These are important milestones in the development of the HKMA, and we have indeed turned a new page in protecting bank customers, be they consumers or investors. I would like to take the opportunity of today’s luncheon talk to share my thoughts on this. Why should we provide protection to bank customers? First, let me pose a question “Why should we provide protection to bank customers?” The answer is quite simple.

So the message is: consumers of financial services have to be responsible for the decisions they make and the consequences of such decisions. Think twice before you sign on the dotted line. Conclusion To conclude, the key takeaways are: •  banks must treat customers fairly by looking after their interests and not treating them just as target of sales; and  •  bank customers must learn to become “smart” as well as “responsible” consumers of financial services. Then how do we go about in achieving these two objectives? For banks, the HKMA will ensure that there is a set of robust but fair rules governing banking conduct. We will enforce these rules vigorously through on-site examinations and off-site surveillance. We will investigate and, if appropriate, take enforcement action against breaches when they are reported by customers or detected by the HKMA. But we appreciate no external forces can be as effective as internal controls and culture in guarding against breaches. We therefore consider it important for the boards and senior management of banks to share and cherish the same value as we do in terms of treating customers fairly.
But in a democratic society, each institution must be held accountable for the consequences of its policy decisions. The central bank is no exception. I am deeply convinced that its independence might be in danger if the general public perceived monetary policy as not in line with the central bank’s mandate. To guarantee their independence in the long run, central banks must therefore invest a lot of energy in communicating and explaining their decisions. Although this might appear constraining, it is in their own interest if the general public has a proper understanding of the monetary action. I also believe that transparency is not only necessary for the accountability of a central bank’s action, but that it also has its own merits: transparency reduces any uncertainty surrounding monetary policy and the future course of interest rates; it makes private planning easier and enhances overall efficiency. Transparency reinforces both the central bank’s independence and the market’s support for monetary policy. Is there any chance to survive outside monetary policy blocks? I would like to conclude these remarks by addressing the more fundamental question of the feasibility, or even desirability, of pursuing an independent monetary policy in the vicinity of a large monetary zone. Is it realistic to assume that the SNB, for example, can follow a monetary policy that differs from the one set by the ECB? Wouldn’t it be preferable to have a fixed exchange rate between the Swiss franc and the euro?

It is only very recently that the explicit mandate of promoting price stability has been introduced in the Swiss National Bank Act. But central bank independence requires more than just an appropriate legal framework. What are the necessary elements? I see three of them. First of all, to avoid any ambiguity as to what the ultimate goal of policy really is, price stability must be clearly defined. In other words, at some point, a nominal anchor has to be set. This can be an inflation target approved by the government, or a definition of price stability adopted by the central bank. A clear definition of the central bank’s goal underpins expectations and allows an objective assessment of the implemented policy. It also protects the central bank from counterproductive bargaining concerning the appropriate direction of its policy. Secondly, monetary policy must be forward-looking. Because monetary actions affect prices only after long lags, the central bank’s policy must be pre-emptive. This implies that in certain circumstances, policy decisions taken in order to guarantee price stability in the long run may be difficult to communicate, or even unpopular. It is thus of key importance that the goal and the strategy of the monetary authorities are well understood by the market and the public. This leads me to two of the most important aspects of modern central banking: accountability and transparency. For sure, central banks have to be independent in order to fulfil their job of maintaining price stability in the long run.