samchain/econo-pairs-v1 huggingface dataset:
The international community response to the crisis in the Middle East and the risks of potential Brexit are additional factors that add to the geopolitical risks. Global growth prospects remain cloudy again, with IMF now (WEO, January 2016) expecting more gradual pick up in global growth from the estimated 3.1% in 2015 to 3.4% in 2016 and 3.6% in 2017 (as compared to 3.6% for 2016 and 3.8% for 2017 in October 2015, WEO). Risks continue to weigh on the downside and are particularly prominent for the emerging and developing economies given their higher vulnerability to sudden switches in global confidence, reversals in capital flows and financial markets volatility. The challenging world translates into challenging environment for monetary policy making. Continuous vigilance on multiple fronts, while successfully juggling between difficult trade-offs in decision making is what has become the new art of central banking nowadays. The main challenge for monetary authorities, not only today, but for years back, is how to deliver the most appropriate policy mix that will support demand and activity, while safeguarding against macro-financial risks. Recent crisis has brought financial stability to the fore acknowledging the importance of central banks in financial stability, a task which they have historically performed, though to a varying degrees. According to a BIS study (2009) central banks’ arrangements for financial stability as they stood before the crisis have differed widely across countries, both for normal and crisis times.

If the increase in oil prices is sustained, the expected decline in annual HICP inflation rates to below 2% later in the spring could be less pronounced – and inflation rates during 2002 could turn out to be somewhat higher – than we expected in late 2001. Beyond the shorter term, in the light of current expectations of a gradual economic recovery in the euro area, upward pressure on prices from aggregate demand should remain contained. However, this outlook for inflation is fundamentally dependent on continued wage moderation. In this respect, there is some cause for concern with regard to ongoing wage negotiations. The economic downturn in the euro area in 2001 also presented challenges for fiscal policy. Since some countries came close to the 3% limit for the deficit to GDP ratio, the experience of 2001 clearly  2  BIS Review 26/2002  demonstrated the need for all countries to undertake consolidation efforts in good time to ensure a fiscal position close to balance or in surplus before the start of a downturn. In order to prevent problems like those experienced last year from recurring in the future, it is vital that the commitments made to achieving balanced budgets by 2003-04 be firmly followed up in the Member States concerned. Finally, I would like to highlight the need for structural reforms aimed at improving the functioning of product and financial markets. If implemented vigorously, these reforms can increase euro area growth potential and employment on a sustainable basis.
This point was already raised almost ten years ago by Miller et al. (2001), who argued that eliminating  3  4  See, for example, Acharya and Naqvi (2010). BIS central bankers’ speeches  downside risk of asset prices feeds the bubble, so more bubbles were not only the result of irrational exuberance but was also “exaggerated by the faith in the stabilizing powers of Mr. Greenspan.” Regarding the second question, on the instruments for financial stability, this is what has been termed macroprudential tools, as opposed to the microprudential regulation, which targets the health of specific financial institutions. One of the first tools used for financial stability was the dynamic provisions to housing loans implemented in Spain in 2000. It is still too early to have a full evaluation of this instrument, since it did not avoid a housing bubble, many small institutions dedicated to housing finance, the “cajas”, went bust during the crisis, but the overall Spanish financial system fared well through it all. On the time dimension, the idea of macroprudential tools is to avoid the buildup of financial vulnerabilities in the upturn of the business cycle, and to have a cushion for the downturn. Financial systems tend to be procyclical, and hence some break system should be implemented to avoid excessive risk-taking. This has been underlying the new rules in Basel III, especially in the definition of the countercyclical buffer of new capital requirements.

The crisis also left some lessons for the profession and the way we use our highly stylized models in policy-making. The narrow view is to think they are a precise description of how the world works, when in truth it is much more complicated. However, the other extreme view – and a very bad one for policy-making – is disregarding all that we have learned from academic work. We need to be humble about the extent of our knowledge, but we also have to be rigorous and serious about policies. 6  BIS central bankers’ speeches  References Acharya V. and H. Naqvi (2010), “The Seeds of a Crisis: A Theory on Ban Liquidity and RiskTaking over the Business Cycle,” mimeo, NYU. Bernanke, B. (2011), “The Effects of the Great Recession on Central Bank Doctrine and Practice,” speech at the Federal Reserve of Boston 56th Economic Conference. Bernanke, B. and M. Woodford (1997), “Inflation Forecast and Monetary Policy,” Journal of Money, Credit, and Banking, Vol. 29, No. 4, part 2, pp. 653–684. Davies, H. and D. Green (2010), Banking on the Future. The Fall and Rise of Central Banking, Princeton University Press. De Gregorio, J. (2007), “Defining Inflation Targets, the Policy Horizon and the OutputInflation Tradeoff,” Working Paper N° 415, Central Bank of Chile. De Gregorio, J. (2008), “La Gran Moderación y el Riesgo Inflacionario: Una Mirada desde las Economías Emergentes,” Estudios Públicos, N° 110, pp. 5–20, otoño. Galí, J. and L. Gambetti (2009), “On the Sources of the Great Moderation,” American Economic Journal: Macroeconomics, Vol.
The modus operandi in this case was said to be the “cloning” of credit cards skimmed at petrol sheds in various parts of England by the Liberation Tigers of Tamil Eelam (LTTE) to fund its terrorist activities in Sri Lanka. It has been reported that about 200 independently owned petrol stations are said to be currently investigated where LTTE terrorists operating under the guise of petrol shed staff have been involved. The investigations have also apparently revealed that the Credit Cards cloned in Britain have been used to obtain funds in Thailand, and some other far off parts of the world. In that context, what is important to note here is that such criminal activities could very well be happening in our own countries too, and we may be inadvertently funding terrorism ourselves. It is therefore clear that we have all got to be vigilant to ensure that these as well as other fund raising and laundering modalities are not adopted in our respective countries and to institute immediate and effective safeguards to combat them. My dear friends, this massive fraud in England also demonstrates very strongly that Terrorists and Terrorism are not a threat only to the country where the actual terror is unleashed but, indeed, to every other peoples, countries and economies as well.

Jean-Pierre Roth: The euro – a stabilising factor in the international currency system Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Fondation Jean Monnet pour l'Europe, Lausanne, 21 September 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The euro is undoubtedly a success story. It has contributed to stabilising the international currency system. In Europe, the former monetary disorder has been replaced by a new monetary order. The European payment system has become more transparent and price stability is guaranteed. Switzerland, too, is benefiting from European currency stability. The Swiss franc is taking advantage of a monetary environment that is considerably calmer than previously. The euro and the franc are coexisting very successfully. Nevertheless, it would be wrong to claim that all the effects of European currency integration have already worked their way through to the real economy. In spurring on competition and promoting transparency, the euro is having an integrating effect. However, there are still considerable obstacles standing in the way of this integration process. BIS Review 103/2007  1
it practically doubled in two years. Over the same period 2001-2007, 570,000 new houses per year on average were built, house prices increased twofold in real terms, and by 2.5 times in nominal terms. As the Report notes, this process adjusted to a dynamic consistent with what may be considered to be a speculative real estate bubble, meaning that the attendant prices stood far above what the fundamentals in the respective markets – and naturally the housing market – would have warranted. 4/14  The increase in credit and its concentration in the real estate sector came about at a time at which the Spanish economy was undergoing deep-seated changes, on two fronts in particular: the adoption of the euro and rapid demographic growth, which made it difficult to assess the scale of the imbalances. The adoption of the euro as from 1999 entailed the disappearance of the adjustment mechanism for the exchange rate against the rest of the euro area countries and the adoption of the common monetary policy, which maintained an expansionary stance during those years, with an appreciable reduction in the interest rates prevailing for the Spanish economy. The monetary policy stance was appropriate for the area as a whole, but was no doubt overly expansionary for Spain. The build-up of imbalances also occurred in other euro area countries, in a setting in which different institutions, analysts and economic policymakers confided excessively in the stabilising effect of the euro.

The today initiative is a significant event, to sustain the growth of financing for this vital part of the economy and it will help to soften the negative impacts of the world economy slowdown. I encourage the banking system and the other players of the market to undertake similar initiatives in order to not impede the financing of small projects, which owns the possibility to be transformed into profitable enterprises. At the same time to maintain a stable and long-term progress of the country, in line with its European aspirations, the banking system should go on the way toward the perfection of service versus the clients, the intensification of communication and public education. Bank of Albania believes that the sources of the stable growth for the mid-term and long-term period consist not only on the encouragement of the work productivity increase or of the investments in industry and construction, but also in other strategic sectors. For the Albanian economy as a developing economy, domestic investments and foreign direct investments in strategic sectors as tourism and infrastructure shall be a real foundation to the economic growth. The positive chain effects are expected to be reflected on the preservation of the steady growth rhythms. Hence, the overall macroeconomic stability will be seen as a precondition in promoting the further intensification of the domestic and foreign investments.
In September 2013, the MPC said that a minimum necessary condition for a rise in interest rates was that unemployment should fall below 7%. This was not a sufficient condition and the Committee was also at pains to emphasise that the actual path of rates would depend on the outlook for the economy at the time. Yet quite a few observers viewed the condition as a hard trigger and were confused when rates didn’t immediately and automatically rise in response (memorably, one MP subsequently likened the Committee to “an unreliable boyfriend, blowing hot and cold”). Similarly, in a speech in July 2015[5], the then-Governor Mark Carney said the “the decision as to when to [start raising interest rates] will likely come into sharper relief around the turn of the year”. This was no more than suggestive and was immediately qualified with a remark about the importance of economic developments in the interim: “I am conscious of several important considerations which mean the actual path [of interest rates] almost certainly will not be mechanical, linear or pre-determined.

So, it raises the “signal-to-noise” ratio, which reduces uncertainty faced by private agents and strengthens the pass-through from communication to market expectations. Second, transparency is a mechanism for democratic accountability, in a world of policy discretion and central bank independence. Transparency makes it easier to judge whether a central bank is committed to its announced policy, and acts as a check on possible temptations to base policy on short-run or political considerations. In short, communication demystifies and democratises monetary policy. The empirical literature finds that better information about central bank actions can lead markets to do the central bank’s work for it. Blinder et al. (2001) was an early study which found that the US bond market’s ability to forecast Fed actions improved from around 1996 onwards, a few years after the Fed started announcing policy changes and publishing minutes of its meetings. Relatively small changes in the Fed’s policy rate were amplified by complementary movements in the bond market, which helps to stabilise the 1/5  BIS central bankers' speeches  macroeconomy.
Paul Fisher: The economic outlook – some remarks on monetary policy Speech by Mr Paul Fisher, Executive Director for Markets of the Bank of England, to the Agency for Scotland, London, 23 May 2011. *  *  *  I would like to thank Ronnie Driver for his help in preparing this speech. For most of us, the current outlook for the UK economy is not a very attractive prospect. After experiencing a precipitous fall in demand during 2008/09, the latest estimates suggest that UK output in 2011 Q1 remained around 4% below its peak pre-crisis level. The Monetary Policy Committee’s (MPC) central projection published in its May Inflation Report, is for output to grow at around its historical trend rate (Chart 1), such that it would be mid-2012 before that previous peak level is regained (Chart 2). At the same time annual CPI inflation, far from being subdued by the recession, has picked up to 4½%. In the short-term it is likely to go higher still before, we expect, falling back towards the 2% target (Chart 3). All this poses a significant challenge for policy makers, not least because of the genuine hardships slow growth and high inflation cause for businesses and households up and down the country.

Peter Pang: Hong Kong’s retail bond issues Opening remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the signing ceremony for the retail bond issue under HKMC’s retail bond issuance programme, Hong Kong, 18 July 2005. *  *  *  Good afternoon ladies and gentlemen, On behalf of the Hong Kong Mortgage Corporation, I welcome you all to this signing ceremony for the retail bond to be offered to the public tomorrow. I am pleased to note that since the introduction of the current offering mechanism through placing banks in October 2001, HKMC retail bonds have been warmly welcomed by retail investors. So far, we have issued seven retail bonds for a total amount of $ billion. The success of the Mortgage Corporation’s debt issues has been attributed to its high credit ratings (which are the same as those of the Hong Kong SAR Government) and to the wide range of notes, which can meet the different investment needs of retail investors. The upcoming issue has both Hong Kong Dollar and US Dollar denominated notes. This is the first time that the HKMC issues US Dollar notes. Apart from diversifying its funding sources, the HKMC’s issuance of USD retail bonds also serves to provide an additional investment channel for retail investors in Hong Kong. The minimum subscription amount for our USD bonds is only $ setting a reasonable threshold to make our debt accessible to a large segment of retail investors.
A doubling of the GDP growth rate might not sound particularly exciting, but over time it has very major effects. An increase in the GDP growth rate from one to two per cent entails the standard of living doubling within 35 years instead of 70 years. For Sweden the stronger growth rate during the second half of the 19th century meant that we emerged from the developing country stage. A number of factors contributed to this development. Free trade was an important element. Our exports abroad were central to this process, which was of course facilitated by the development of the railway system. During the first decades after 1850, there were three main export products contributing to a very rapid export upturn; oats, iron and timber. The importance of exports of oats from the southern part of Sweden is something of a curiosity. Oats were the fuel of that time. All of the horses providing transport in industrial cities like London required oats and much of this came from Götaland. The construction of the railway, as well as investment in industry, housing construction and agriculture naturally required capital. This was mainly obtained from abroad. Sweden was a typical example of a country with an expansionary economy making use of saving in other parts of Europe. This borrowing from abroad was on a very large scale and, prior to the outbreak of the First World War, Sweden was probably the most indebted nation of the time.

It is the potential growth rate that sets the limits. We at the Riksbank must take into account this rate and any changes in its development, even though monetary policy does not directly affect potential growth. Similarly, we must take into account changes in competitive conditions, as changes here can have both direct and indirect effects on the development of inflation. Possible measures to strengthen potential growth are an issue for other forms of economic policy, involving, for instance, the stimulation of competition to improve allocation of resources. The high growth rate over the past decade has been primarily generated by the fact that we have used available resources more efficiently. On the other hand, we have not supplied many more resources either in the form of hours worked or of capital/investment. From the mid-1980s up to 1993 the opposite applied. The limited increase in productivity that arose then was due to investment, i.e. capital intensity increased. Over the past ten years we have had an impressive annual increase in factor productivity, while capital intensity has increased at a slow rate. It is worrying that the increase in labour supply has been, and still is, so limited. In this aspect we differ from most of the other countries that have been aided by increased labour supply in raising their growth rate. An important explanation for the poorer development in Sweden is the amount of longterm sickness leave and early retirement.
All government measures and all actions taken by economic policymakers and agents should be aimed at restoring the confidence we have lost. And one of the pre-requisites for doing so and for dispelling all uncertainty is that Spain should bring its public finances back on to a path of stability in line with its European commitments. I believe there is a sizeable consensus that Spain needs to redress its fiscal imbalance and move towards a path of stability, in line with its European undertakings, and that this is a pre-requisite for restoring confidence and dispelling uncertainty. Consolidation measures have been tabled that are capable of bringing about this change of direction in budgetary dynamics. And, above all, the national budgetary framework has been substantially reinforced in order to allow the coordination, monitoring, surveillance and, where appropriate, correction of deviations by the different tiers of government, which we were previously lacking and which is vital to achieve the fiscal targets set. The authorities at all levels of government have taken a significant first step in ratifying these targets and agreeing on their contribution to the consolidation drive that must be undertaken in the coming months. Now it is of the essence to restore credibility with a rigorous budgetary outturn, transparent management and, when necessary, corrective measures that shore up the fiscal targets set. That will attest to the strength of the commitment to the budgetary stability enshrined in the new Organic Law.

Broadly speaking, workers who can build skills and remain nimble can do very well in today’s economy, while those who can’t are much more likely to fall into lower-paying jobs and get stuck there. 2  BIS central bankers’ speeches  A skilled workforce that is matched to the needs of employers is also necessary for the economy to grow and prosper. By pursuing its mandated goals of maximum employment and price stability, monetary policy can help labor markets recover by providing incentives for firms to invest and grow. However, monetary policy cannot by itself solve skill mismatches that may exist in the economy. These frictions must be addressed in other ways, such as by workforce development policies. That is, monetary policy can complement workforce development policies, but is not a substitute for these policies. That is why I believe workforce development is so important for the long-term health of the economy. We need to help workers build the skills necessary to adapt to change. This makes workforce development a top priority for everyone involved: workers, their employers, their communities and the public sector, as well as education and job training institutions. We all need to share in the responsibility of helping people increase and maintain their skills. Successful workforce development needs to include what I call the 3 P’s: Partnerships, Programs and Placement. Partnerships entail the cooperative endeavors between local employers and educational institutions to determine the best strategies to help workers develop the skills that employers need.