samchain/econo-pairs-v1 huggingface dataset:
But this does not mean that the international economy has been inoculated against new, unexpected shocks. Remember that noone predicted the extent and course of the Asian crisis. Neither were the risks that led to last autumn’s international financial turbulence highlighted in advance. Our knowledge of phenomena of this kind is limited. It may be asked whether it will ever be possible to predict such matters accurately. The models with leading indicators that are being tested at present  1  BIS Review 106/1999  tend to be too blunt. They are liable to sound the alarm about things that never occur and miss those that do happen. The picture is bright at present but we know that some countries are in a vulnerable position that can suddenly deteriorate. Stock market prices are notably high, not least in the United States. The existing imbalances in the US economy may have effects in the future. But as the course of such events is genuinely difficult to foresee, central banks have little option but to deal with a new situation if and when it arises. Repo rate too low in a longer perspective After the series of reductions, the repo rate is currently 2.90%. Over a complete business cycle, such a level would probably be too low, even in an economy where inflation expectations have settled down around the targeted rate of 2%. So the present monetary stance can be said to be relatively expansionary.

One reason for greater circumspection today in monetary policy is that the trade-off between growth and inflation may have changed. During the 1990s the paths of inflation and real economic activity in many countries, Sweden included, have not followed the pattern that their earlier relationship suggests. This has started a discussion, in the United States and elsewhere, of whether macroeconomic structures have changed so that higher growth is now feasible without inflationary tendencies. It is BIS Review 106/1999  2  sometimes argued, for example, that one of the forces behind today’s improved economic performance in the United States is the rapid advances in computer technology and telecommunications; this has led to more efficient processes for production and distribution and thereby paved the way for higher productivity growth. Productivity in the United States does appear to have been rising more strongly. Some observers consider that the potential annual growth rate may have moved up from 2% to up to 3%, perhaps even more. In Sweden, too, there are many indications that the growth of labour productivity in the 1990s has been higher than in the 1980s. The upward shift may perhaps amount to half of a percentage point. It is this that has prompted the common, but not entirely certain, estimate that the Swedish economy can now sustain an annual growth rate between 2 and 2.5%. But Swedish statistics do not yet confirm that productivity and thereby potential growth have increased fairly appreciably, as has been the case in the United States.
To add something else would be to double-count the effect. Macro models and the determination of demand As an undergraduate one of the books I had to read was a collection of essays about monetary economics by one of my lecturers, Frank Hahn. It begins with this rather provocative sentence: “The most serious challenge that the existence of money poses to the theorist is this: the best developed model of the economy cannot find room for it”. As a newcomer to the subject I found this a bit concerning (not to say alarming). If economics can’t even say why money exists how can it hope to explain what it does? Reading on, one’s concern subsided a bit. Hahn was, by training and inclination, a general equilibrium theorist. For him, as he explained in the very next sentence, “the best developed  Page 8  model of the economy” was the highly stylised description developed by the great economic theorists Ken Arrow and Gerard Debreu. For all its sophistication, the Arrow-Debreu model is one in which, by assumption, trade is entirely costless. In this perfect economy there’s a market and a price for the exchange of any two goods or services – including those for future delivery – without the need for a medium of exchange or any sort of costly financial architecture. So it’s not a huge surprise that, having ruled out at the start the conditions that might require it, this model should “have no place” for money.

In the case of the SNB, foreign currency investments have increased substantially as a result of foreign exchange interventions. This has exposed the SNB to a substantial exchange rate risk, which is a consequence of monetary policy considerations. Consequently, it is one that the SNB must take. We reduce the risks through suitable diversification of our foreign currency investments. However, the primacy of monetary policy means that our scope for diversification is limited.4 Additional risks in connection with zero interest rate policies can result from the fact that it has become very difficult for investors to achieve a satisfactory return on bonds. There is a danger that investors seeking an attractive yield will become imprudent and take excessive risks. The longer a low interest rate phase, the greater the danger of unintended consequences in the form of speculative price developments and misallocations. We have been observing a substantial increase in real estate prices in Switzerland for some years now, with strong growth in mortgage loans. The SNB has repeatedly expressed its concern over these developments. Prolonged low-interest phases also present the insurance industry and pension funds with considerable challenges. It goes without saying that central banks continually evaluate and reassess the effects and risks of monetary policy in the light of the most recent data. This applies in normal times and even more so in exceptional situations such as we have experienced over the past few years.
Jean Claude Trichet: Welcome Malta! Speech by Mr Jean Claude Trichet, President of the European Central Bank, at the event for launching the joint communication campaign for the euro changeover at the Central Bank of Malta, Valletta, 30 September 2007. *  *  *  Ladies and Gentlemen, It is a great honour and pleasure for me to be here at this festive moment. This is to mark the launching of the joint communication campaign for the euro changeover in close co-operation with the Central Bank of Malta and with our friend, Michael Bonello, just 92 days before Malta adopts the euro on 1 January 2008. This will signify a great milestone in Malta’s history, especially since Malta only joined the European Union (EU) almost four years ago, on 1 May 2004. Let me first offer my warm congratulations to all of those who have helped bring Malta to this point. In 2002 for the countries that were in the euro area at the time, as well as for Slovenia this year, it was a memorable moment and a positive step. So I can well imagine how the Maltese feel at the moment. You can be proud of Malta’s successful convergence process. In fact, we are very pleased about the fruitful cooperation between the European Central Bank (ECB) and the Central Bank of Malta in the preparations for the changeover, be it at the technical level or through the participation of Governor Bonello as observer in the Governing Council since last July.

I am pleased to see that the recent euro barometer showed a steady progression in the satisfaction of the Maltese with the adoption of the euro (from 40% in September 2005 to 64% in June 2007). Let me hand over the euro star to Governor Bonello to symbolically flag that the Central Bank of Malta will join the Eurosystem on 1 January 2008. We look forward to welcoming you wholeheartedly into the euro area. Thank you very much for your attention. BIS Review 110/2007  1
Therefore, key departments to the functioning of a modern central bank, such as monetary policy, economic research, banking supervision and regulation, had to be built from scratch. As we have come a sufficiently long way to remember this with a smile on the face, I would like to share with you two amusing stories I deem illustrative for the hardships of the beginning. One dates back to the autumn of 1990. Having been recently appointed at the helm of the National Bank of Romania, I held a press conference during which I stated that the banking system would operate on two tiers or two floors, with the central bank on the first floor and commercial banks on the second. The head of the institution’s commercial banking operations – the same person who would later manage Banca Comercială Română after its separation from the National Bank of Romania – took these words literally and immediately complained that he had just moved to the first floor of the building and warned me that he had no intention of moving again! 1/5  BIS central bankers' speeches  At around the same time, in the early days of my term in office as Governor, someone “encouraged” me with the words: “Welcome and good luck running an empty bank!”. Unfortunately, the trials and tribulations of the first post-communist year had practically depleted the country’s foreign exchange reserves in nine months’ time.

I confess that I then felt the need to go to the vault and feel with my own hands the gold bars – Romania’s last tangible reserve in those days (in December 1990, gold reserves stood at 68.7 tonnes, amounting to approximately USD 850 million) – for a boost of confidence that the rather complex economic situation might be successfully tackled. It is hard to believe that this really happened, especially now, when Romania’s international reserves amount to approximately 38 billion euros. I will now move on to less amusing memories of those times. The avatars of economic transition rendered difficult the mission of Romania’s central bank. Monetary policy, a fundamental task of the National Bank of Romania, was facing numerous difficulties and constraints, as the process of lowering inflation was often undermined by the need to pursue conflicting macroeconomic objectives or avert a full-blown banking system crisis. This was because Romania’s path towards a functional market economy was anything but smooth. Quite on the contrary, the process often shifted between step-ups and slowdowns, that is when it did not stall altogether. A major feature of the domestic economy’s reform was the priority given, at the onset of the process, to ensuring the country’s social and political stability. In this context, the preferred choice was a gradual strategy, with reforms spread over many years, so as not to spark major social tensions.
Turning now to labour markets, also here progress has been rather uneven across areas. A number of countries have lowered marginal tax rates in order to make their tax systems more employment friendly. Some progress has generally also been made with the introduction of more flexibility in working contracts and practices. In many other areas, however, important reforms have not yet got off the ground. For instance, few changes have been made regarding employment protection policies in euro area countries, which remain among the strictest in the industrial countries. Also, reforms aiming to simplify and limit unemployment benefit systems and thereby enhance employment growth have only slowly progressed in almost all euro area countries. The emergence of skill shortages and tight labour markets in several euro area countries shows that structural problems still remain and need to be solved. The euro area could use its potential much better, as is illustrated by its relatively low labour force participation. Whereas, in the euro area, the labour force participation rate was 67% in 1999, it amounted to 77% in the US. BIS Review 61/2001  3  All in all, we see that some traditional hurdles to market flexibility and competition are slowly being removed, but as regards the current state of affairs in the euro area there is certainly still plenty of scope and urgent need for improvement. Structural reforms are of paramount importance not only for raising the growth potential of the economy but, most importantly, for increasing employment prospects in the euro area.

From an economic point of view, the relevant question is whether the political and institutional framework which governs the euro area is designed in such a way as to ensure bright long-term prospects for the euro area in terms of employment, real growth and, more generally, living standards of its citizens? In this respect, while I see an urgent need for further structural reforms in the euro area, let me emphasise at the outset that I am rather optimistic as concerns the long-term growth and employment prospects of the euro area. Not least as the euro, together with healthy competition among differing policy designs of national authorities, will act as a catalyst for further reform and integration. In my presentation today, I will first briefly address the political and institutional structure underlying the euro area. Secondly, I will discuss some features of the ECB, the institution responsible for an area in which full integration has been achieved, namely monetary policy. Thirdly, I will discuss some of the challenges which need to be addressed to fully grasp the opportunities offered by the single currency, thereby further improving the economic prospects of the euro area. Finally, I shall argue that the unique institutional choice for the euro area brings many advantages and opportunities and thus, if properly handled and carefully further developed, is a very solid fundament for a substantially more dynamic long-term development of the euro area than most observers currently appear to expect.
The projection that total demand for domestic goods will remain relatively limited due to the negative contribution of the foreign demand, despite the stable increase in domestic final demand throughout 2006, underlies these findings (Graph 25). 18  BIS Review 67/2006  Graph 26. Inflation and Output Gap Forecasts (Constant Interest Rate) 10 9 8 7 6 5 4 3  Forecast Range*  2 1  ± 2 Uncertainty Band  Output Gap  0 -1 -2 7:03  7:02  7:01  6:04  6:03  6:02  6:01  5:04  -3  * The probability of inflation staying within the forecast range is 70 percent. ♦ The path ‘consistent with the target’ which is announced in 5 December 2005 ‘’General Framework of Inflation Targeting Regime and Monetary and Exchange Rate Policy’ and constitutes the base for the principle of “accountability”. • 2006 end-year point target. ♦ The path consistent with the 2007 end-year target, under contemporary data set. In Graph 26, the forecasts that have been produced under a main scenario are presented - in which the current stance, the short-term outlook and the assumptions relating to the fundamental variables the framework of which are given above -are faithfully preserved; however, the policy interest rates are maintained as unchanged for one year starting from today. In contrast to the previous scenario, the path of policy interest rates has not been determined by a medium-term approach, but has been handled as an exogenous assumption.

Public Debt Stock Indicators (Billion YTL) Public Debt Stock Indicators  The Analysis of the Change in the Central Government’s Overall Debt Stock 60  400  120 334.4 100  350  40  300 Percent  80 60  20  250  68.2  200  55.8  0  150  40  100 20  50 0 2006/03  2005  2004  2003  2002  2001  0  Central Government Total Debt Stock (Right axis) Central Government Total Debt Stock/GNP Total Public Net Debt Stock/GNP  -20  2003  2004  2005  P arity Effect**  6.2  3.0  -4.8  2006/03* 0.7  Exchange Rate Effect***  -18.8  -4.6  -0.8  0.0  Fo reign Debt Net Increase  4.0  4.1  -0.6  0.7  Do mestic Debt Net Increase  48.8  31.2  21.1  1.4  * It shows the change compared to 2005. ** It shows the external debt changes resulting from movements in USD/Euro and USD/SDR parities. *** It indicates the changes resulting from movements of New Turkish Lira against USD. Note: It represents the growth in the net increase in debt stock excluded from exchange rate and parity effects. The parity effect is calculated merely for the external debt. Each component of the change in debt stock is calculated as billion YTL. The sum of components corresponds to the nominal change in the overall debt stock expressed in terms of YTL. Source: Treasury, CBRT.
Nevertheless, developments in the krone are of considerable importance to interest-rate setting because exchange rate developments have an impact on inflation and output. When there are prospects of moderate economic activity, low wage growth and low inflation, Norges Bank will reduce the interest rate. This will normally result in a depreciation of the krone. Prices for imported goods and services will increase. A weaker krone strengthens the competitiveness of Norwegian enterprises and indirectly leads to higher output, employment and inflation. Themes in foreign exchange markets shift. In periods, investor focus on stock returns feeds through to exchange rate movements. During periods of political and economic unrest, investors may choose individual currencies as a safe haven - often the Swiss franc. In the autumn of 2002, the Norwegian krone was probably also perceived as a safe haven. Wide fluctuations between major currencies have a tendency to result in a weaker krone. In the past 12-18 months, developments in the interest rate differential between Norway and other countries appear to have had a particularly marked impact on our currency. Norwegian interest rates have been pushed down to the level prevailing abroad. Chart 10.

Even in countries in which the governments and the central banks have clearly switched to a policy directed at achieving price stability, concern about a recurrence may persist. Such a concern is not without costs to the economy. Households and businesses will reckon that there is a risk of an increase in inflation. Consequently the interest rate level may be higher and economic development in general may be worse than what would have been possible if all the actors in the economy had had complete confidence in the anti-inflation policy. Question 3: Why should central banks be independent? This problem of building confidence in the anti-inflation policy may explain why in recent years many western countries have changed their legislation or in other ways have made their central banks more independent. There are basically two problems: the temptation to resort to stimulating the economy in the short term may be too strong and inflation expectations become built into the system and make the policy less effective. By giving the central bank an independent status, the political decision-makers can demonstrate that they are serious about their ambition to let monetary policy be conducted with a view to long-term goals. In such a way price stability can be combined with better economic development. BIS Review 14/1998  -5-  There have been a good many studies showing that an independent position for the central bank tends to have a favourable impact on inflation.
And this supply of services is a necessary condition for a healthy and  BIS central bankers’ speeches  1  successful economy, as demonstrated by the costs imposed by the financial crisis on the public and society at large. For insurance companies, the PRA will have the second objective of contributing to securing an appropriate degree of protection for those policyholders. Why do we need a second objective for insurance? For me, it rightly emphasises that in taking out some forms of insurance policies, the public can become locked into very long-term contracts, much longer often than is the case in banking with deposit contracts. Bearing this in mind, the public interest I think justifies a second objective for insurance, which is more directly targeted at the situation of individual policyholders. In contrast as bank deposits are redeemable on demand at par value, and as banks lend the deposits at longer maturities, so they are inherently fragile and vulnerable to contagion, so protecting the system protects depositors. There are a number of important points in this description of the PRA’s objectives. First, the emphasis on economic well-being as an ultimate goal aligns the supervision of banks and insurers more closely to the field of macroeconomic policy. This is in line with the definition of “financial stability” as the continuity of supply of critical financial services which are important to the functioning of the economy. Three services stand out here: the provision of payment services including access to funds; credit extension; and, risk transfer.

Zeti Akhtar Aziz: Innovative financing for transformation Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Langkawi International Dialogue 2011: Innovative Financing for Transformation, Putrajaya, 19 June 2011. *  *  *  The world is transforming. Our motivation for accelerating our own pace of transformation is to ensure that we will be able to effectively participate in this new economic and financial environment, and in the process, maximize our potential performance. Central to this is having a well functioning financial system and the right financial policies. The recent financial crisis in the developed world has shown that when things have gone wrong in the financial system, the consequences have been catastrophic. Instead of creating wealth – it destroys wealth, instead of generating employment – it results in job losses, instead of facilitating economic progress – it derails growth and development. It is my great honour and pleasure to speak at this 2011 Langkawi International Dialogue on Innovative Financing for Transformation. The overarching objectives of economic transformation is surely to generate sustainable and balanced growth, to improve living standards, to create employment opportunities and to achieve a more inclusive development. This decade has however seen how innovative financing in several of the developed economies have fuelled excessive levels of leverage that have resulted in deeply indebted private and public sectors, which in turn have become highly destabilizing to their financial systems and to their economies.
Page 5/6  Zurich, 23 March 2023 Thomas Jordan, Martin Schlegel and Andréa M. Maechler  News conference  Page 6/6

This is happening particularly in the advanced world, but even in the emerging world there has been a slowdown in potential growth. No one can say for sure if this is a permanent state of affairs. There is some debate among economists as to whether the productivity slowdown is a short term or long term phenomenon. But certainly the demographics will still be with us, societies will get older and labour force growth weaker, and economic growth is going to be significantly slower in the next 10 to 20 years than it has been in the past. Investment is unlikely to pick up very significantly in this context, and it does mean taken together with the savings trend, a lower long term real rate of interest in the global economy. 13. So putting the two together – trends in ageing and in economic growth, I think we have to live with the fact of low real interest rates for many years to come. 14. It will pose a challenge for retirement security, and especially for pension funds and insurance funds. As you know, it hits you on both your assets and your liabilities. It means a lower return on your assets. And it pushes up the value of liabilities because the discount rates has gone down. 15. It is not a temporary challenge but a long term challenge. As life expectancy goes up, liabilities will be pushed out further, and the gap in maturity between your liabilities and your assets is likely to grow.