samchain/econo-pairs-v1 huggingface dataset:
10 A basic idea appears to be that underlying structural trends such as globalisation and digitisation comprise such strong adverse winds with regard to bringing up inflation that it is not worth trying. Instead of aiming to bring up inflation to 2 per cent, which will be difficult and risks causing other problems, one should therefore lower the inflation target, the argument goes. Digitisation and globalisation can affect inflation… It appears reasonable to assume that digitisation – defined as the digital technological developments and its spread to various areas of usage in the economy – will on the whole have a dampening effect on inflation, as it is usually measured. 11 Perhaps the most obvious and direct channel is price developments on certain products in the CPI’s basket of goods, which is affected by the production costs of these products showing a falling trend due to technological advances making advanced electronic components increasingly cheap. This applies, for instance, to mobile phones and computers. This is a development that has been going on for a long time and it may well continue for some time to come. 12  8  Stein (2013). 9  See, for instance, Mitelman (2013) and Schück (2015). 10  For instance, there appears to be a debate in New Zealand on whether the Reserve Bank of New Zealand’s attempts to attain the inflation target of 2 per cent risk overheating the economy, see the New Zealand Herald (2015).

7  In terms of communication, however, there may be some differences that are significant in practice. BIS central bankers’ speeches  3  on the risks one wishes to counteract. A monetary policy that leans against the wind therefore gives little “benefit”, while the “cost” in the form of poorer price stability and macroeconomic stability is high. On the other side of the debate it has been pointed out that it is not necessarily a disadvantage that monetary policy is blunt, in the sense that it has a broad impact on the economy, as it then “gets in all of the cracks” and is difficult to circumvent. 8 What the benefits and costs of using monetary policy to counteract financial imbalances will be is also an empirical question. Here, as well, the problem is that the practical experiences of a monetary policy that leans against the wind are still limited. Should the level of the inflation target be changed? Another question being discussed is whether the level of the central banks’ inflation targets should be changed. The debate since the financial crisis has primarily concerned whether the target should be raised, but most recently there have also been arguments for lowering the target. Should central banks lower their inflation targets? It appears to be mainly in the debate in Sweden that arguments in favour of lowering the target have been put forward recently. 9 But they have also arisen in other countries to some extent.
Energy prices have dropped sharply over the past month and the prices for many other commodities also have softened. And with the unemployment rate still high and capacity utilization low, resource slack is likely putting downward pressure on prices. In addition, market measures of longer-run inflation expectations are at the low end of the range they have been running since last November. 2  BIS central bankers’ speeches  Putting these factors together, my outlook is for overall inflation over the medium term to fall back towards core and remain below the 2% level I see as consistent with the price stability leg of the Fed’s dual mandate. Monetary policy and the dual mandate In my view, central banks should focus on medium-term inflation. Over shorter periods, measured inflation rates are affected by all sorts of short-term influences, such as fluctuations in food and energy prices that are beyond the control of monetary policy. Furthermore, there are significant lags before policy actions influence inflation. So reacting too strongly to short-run influences simply adds noise to the policy-making process. So, by this appropriate standard I think inflation likely will be below our goal of 2%. And of course, unemployment is much above its natural rate. Thus, at the moment, there is little conflict between our two goals. Both suggest at least some additional monetary policy accommodation would be helpful.

“An Historical Analysis of Monetary Policy Rules,” in John B. Taylor (ed.) Monetary Policy Rules, University of Chicago Press. BIS central bankers’ speeches  3  modern treatments is due to John Taylor in an article published in Econometrica in 1979.3 This framework continues to be a mainstay of optimal policy analysis, as evidenced by a large literature that includes work by Michael Woodford in recent years.4 Taylor expresses the central bank’s dual-mandate objective as monetary policymakers attempting to minimize the weighted sum of squared deviations of inflation and the level of output from their goal values. That is, a central bank attempts to minimize a simple quadratic loss function like the following: L = (π – π*)2 + λ * (y – y*)2 Here π and y are inflation and the (natural) logarithm of output, and π* and y* are the policy goals for these variables. In most formulations, y* is the log of the level of potential output – the level of output at which resource slack has a neutral influence on the level of inflation. Thus, (given the properties of logarithms) y – y* is the usual output gap, the percentage difference between actual and potential output. And π – π* is the gap between the actual and desired rates of inflation. Ideally, we’d like both of these gaps to be zero, but this usually won’t be the case.
Mohamed S Fofana: Benefits of microfinance in Sierra Leone Speech by Mr Mohamed S Fofana, Deputy Governor of the Bank of Sierra Leone, at the Official Opening Ceremony of the ProCredit Bank (SL) Limited, Freetown, 1 February 2008. *  *  *  Madam Chairperson Ministers of Government Members of the Diplomatic Corps Members of the Board of Directors, Senior Management and Staff of the ProCredit Bank (SL) Limited Heads of Banks and other Financial Institutions Colleagues from the Fourth Estate Distinguished Ladies & Gentlemen: I am happy to be here this afternoon to address this distinguished audience on the official opening ceremony of the ProCredit Bank (SL) Limited. The Bank of Sierra Leone issued a licence to ProCredit Bank (SL) Limited to conduct banking business in Sierra Leone on 1st August, 2007, and the bank opened its doors on 3 August 2007. Its activities, since that time, have been largely focused on microfinance promotion; taking deposits from and giving credits to small businesses. This is an important mile-stone in Sierra Leone’s poverty reduction drive, which is consistent with Government’s desire to make the microfinance sub sector of the financial industry viable and responsive to the needs of the vast majority of Sierra Leoneans. Madam Chair, Distinguished Guests, the benefits of microfinance are numerous and well documented, especially as they relate to a country’s effort in reducing poverty. I cannot go through all such benefits this afternoon. I will however attempt to highlight a few.

The new information leads us to estimate that global growth will fall short of expectations, because of both downward corrections to projected activity in the developed world and a major adjustment in Latin America, which is headed to a contraction in 2016. At the same time, the external financial conditions relevant for Chile are estimated to be tighter, while the terms of trade will be lower (figure 2 and table 1). BIS central bankers’ speeches  1  The downscaling in output projections for 2016 is consistent with the lower base at the end of 2015, and with spot indicators suggesting that consumption and investment have remained weak this year to date. On the consumption side, in the last two years the real wage bill has been outgrowing private consumption, leading us to expect a somewhat stronger recovery of the latter during this year. This has not happened, however, which together with the sharper deterioration of the labor market in recent months, plus consumers’ expectations remaining pessimistic and low levels of imports of consumer goods in the first months of the year, mean that this component of growth has to be revised downward. However, by 2017 some recovery of this variable is expected, thanks to a gradual improvement in its fundamentals, particularly, moderate growth in the wage bill and a slight improvement in consumer expectations. Investment, on the other hand, has seen a significant adjustment in recent years, due primarily to the end of the mining investment cycle (figure 3).
Moreover, to the extent that the support offered by asset purchases represents the offer of the central bank’s balance sheet as an alternative venue for intermediation when private markets have seized up, it is natural that the asset purchases could be accompanied by asset sales, either in parallel or at least in close proximity. It is by both buying and selling (or alternatively lending and borrowing) that the central bank intermediate financial transactions between private market participants. This is the essence of the central bank acting as a central counterparty or market maker of last resort. Bank of England  Page 11  Relationship with financial stability There is also a natural complementarity between providing central bank support to maintain market functioning and contributing to the maintenance of financial stability. Indeed, the two go hand‐in‐hand. The direction of support will depend upon the specific incidence of market failure causing market dysfunction, the structure of the financial system, and the broader flexibility of the economy. This is the essence of why such interventions will be ‘targeted’ on specific market segments. These factors will vary both over time and from one jurisdiction to another. The form of support offered by central banks will thus also vary. Yet central banks must also recognize the limitations of their policy. In the face of crisis, they may need to be innovative in their approach. But central banks should be very wary of assuming responsibility for goals that they do not have the instruments to pursue.

In common with other central banks, the Bank of England has a number of tools designed to provide backstop liquidity to banks under a range of scenarios. But in recent years, financial intermediation via non-bank financial institutions (NBFIs) – what we used to call ‘shadow banks’ – has increased, in part because of greater regulation of the core banking system following the global financial crisis. Of course, the main responsibility for managing the liquidity and other exposures of these institutions lies with the institutions themselves, within an appropriate regulatory and supervisory structure.19 But as we have learnt somewhat painfully over recent decades in a variety of jurisdictions, occasions can arise where the systemic nature of liquidity risks make it difficult, if not impossible, for individual institutions to attain the resilience and robustness they need. Central banks have therefore begun to discuss the need for additional backstops. In particular, they have considered whether the need for asset purchases to address dysfunction in the markets where NBFIs operate has risen relative to the need to provide liquidity to standard banking counterparts for central banks. Since asset purchases implemented in this context work in concert with changes in Bank Rate, they naturally take place when those interest rate changes are taking place.20 In other words, such asset purchases would naturally happen when Bank Rate is away from its effective lower bound, and retains the flexibility to move in both directions.
Central bank experts have adjusted the figures based on the assumption that actual demand accounts should see a growth similar to that of currency in circulation, as it was the case in previous years. Hence, it would appear that quasi-money rose over 80% December 2004 through August 2008 versus only 40% as indicated by statistical data. In other words, both household and corporate savings in domestic currency expanded at a pace much faster than that of time deposits. These statistics led the media to comment on a would-be stalemate in RON-denominated savings. The NBR specialists will make sure these developments are explained in further detail. This is how a fiscal policy slippage entails both a contraction in budget revenues and potential errors in assessing monetary developments. Given the heightened turbulences on the international financial markets in the last few weeks and the fact that the NBR is vigilantly monitoring these developments, I believe we should refer to their potential impact on the domestic financial system and on the Romanian economy as a whole. The Romanian banking sector is still affected mainly by increased external financing costs. The limited impact is due to domestic financial environment characteristics, as well as to the prudential monetary policy and financial stability strengthening measures adopted by the central bank over the years. Let me highlight the most important of these measures. First and foremost, credit institutions in Romania do not have exposures to subprime instruments, which lie at the root of the turmoil.

Svein Gjedrem: Monetary policy, securities markets and municipalities Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the anniversary seminar, Kommunalbanken, 30 August 2002. Please note that the text below may differ slightly from the actual presentation  *  *  *  In my address today I will touch on three themes. First, I will discuss monetary policy and its influence on municipalities’ financial position, followed by some remarks on the Norwegian bond market and Kommunalbanken AS. I will then conclude with some reflections on the challenges associated with the pension system and the interplay with securities markets. Municipalities’ financial position and monetary policy  Guidelines for economic policy  • Fiscal policy: - guideline for use of petroleum revenues: • use real return on Petroleum Fund • smooth fluctuations in the economy  • Monetary policy: - inflation target  SG Kommunalbanken, 30.august 2002  Norway’s economic policy is based on the guidelines for fiscal and monetary policy. The guideline for fiscal policy states that the use of petroleum revenues over the central government budget shall be equivalent to the expected real return on the Government Petroleum Fund. Most of the phasing in of petroleum revenues will take place over the next ten years. With a 4 per cent return on the Petroleum Fund, the use of petroleum revenues will rise to almost 5 per cent of mainland GDP in 2010.
7  The 3-month Euribor rate is very close to the 3-month GBP Libor rate (1.28%) but considerably higher than the 3-month USD Libor rate (0.66%) while the 6-month Euribor rate virtually the same with the six-month GBP Libor rate (1.49%). 8  For example, the short-term (i.e. below one year) bank lending rate was 3.52% in March 2009, some 2.5 percentage points below its peak value (6.03%) reached last October. This is still somewhat higher than the corresponding US bank lending rate at 2.04% in March 2009. 9  Of this overall figure of EUR 790 billion, USD 130 billion refer to the writedowns of euro area large and complex banking groups (LCGBs); while USD 49 billion relate to other euro area banks. 10  Of this total amount of USD 192 billion in capital raised, almost USD 155 billion refer to euro area LCBGs while over USD 37 billion have been raised by other euro area banks. 11  See International Monetary Fund (2009). BIS Review 65/2009  5  Independently of the total potential impact of the financial turbulence and the weak economic activity on euro area banks’ net income and capital position, it is evident that they will need to strengthen their balance sheets.

This needs to be reinforced by substantive improvements in risk management practices, greater alignment between business strategy and risk, and greater appreciation by boards and senior management of insurers on risk issues given the growing complexity and increasing interconnectedness of financial markets and financial sector players. The insurance industry has progressed significantly over the years and is well-positioned to supporting both the recovery process and future growth potential of the economy. As emerging economies rebalance with greater emphasis on private consumption, the social safety net will need to be strengthened, with insurance and pensions now having a greater role. An ageing population will also become an issue in the future. Globally, the number of the aged population that is aged 65 and above is expected to grow dramatically by 2050. Such rapid growth will have major economic and social consequences in many countries. Many nations are finding it increasingly difficult to provide adequately for this segment of the population through state-provided social security. Planning for retirement has therefore become essential both for individuals as well as public policy to ensure sustainable financing to meet retirement and healthcare needs in the long term. An enhanced social safety net would foster greater security in addition to reducing the need for significant precautionary savings. This would in turn promote increased consumption spending. Prospects for higher insurance penetration rate in the region continue to remain positive.
However, I think the evidence shows that over the past 25 years most supply shocks have been transitory – and have had no long-lasting imprint on longer term inflation, or on inflation expectations. Nonetheless, recent historical trends do not always continue, so it is important to monitor inflation dynamics very closely to make sure that this pattern is continuing in the incoming data. In particular, I will look intently at whether there is any evidence that the expectations of underlying inflation have changed. To date, expectations seem quite stable and show no evidence of diverging from the recent past. I am committed to responding decisively, and as forcefully as necessary, to ensure that long-term inflation expectations remain stable and that food and energy price increases are not passing through to other prices.7 Given the important role of labor costs in a developed, services-focused economy such as the United States, it is important to closely monitor trends in labor markets. Currently, wages  6  The average annual expected price change they expect over the next 5 to 10 years. 7  See for example the comments on commodity price pressures and monetary policy by my colleague William Dudley, president of the New York Federal Reserve Bank and Vice Chair of the Federal Open Market Committee: “Inflation expectations are well-anchored today and we intend to keep it that way.

BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches  BIS central bankers’ speeches  15
[18]  Chart 3 Returns correlations of bitcoin vis-à-vis selected financial assets (yearly rolling correlation)  Sources: Bloomberg, S&P Global iBoxx, CryptoCompare and ECB calculations. Notes: The data are for the period from 1 January 2016 to 16 June 2023. Cryptos as a means of gambling and circumvention But the very instability of unbacked cryptos does make them appealing as a means of gambling. And their use as such has been facilitated by the establishment of a centralised market structure that supports the broader use of crypto-assets. [19] Crypto exchanges have become gateways into the crypto ecosystem, often providing user access to crypto markets in conjunction with other services like wallets, custody, staking[20] or lending. Off-chain grids or third-party platforms have offered users easy and cost-effective ways to engage in trading and  speculation, while stablecoins are being used to bridge the gap between fiat and crypto by promising a stable value relative to fiat currency. [21] Besides gambling, crypto assets are also being used for bypassing capital controls, sanctions and traditional financial regulation. A prime example is bitcoin, which is used to circumvent taxes and regulations, in particular to evade restrictions on international capital flows and foreign exchange transactions, including on remittances. [22] These practices may have destabilising macroeconomic implications in some jurisdictions, notably in developing and emerging markets.

Pressures increase from regulated entities, which complain about regulatory uncertainty, and from policy-makers, who are keen to foster economic recovery and growth after 8 years of low economic performances almost a lost decade! Keeping the momentum relates to three objectives: –  complete the regulatory agenda, in particular regarding what is named now as “market-based finance”, so as to effectively and comprehensively strengthen the financial system and remove regulatory uncertainty;  –  make sure that the regulatory spectrum expands well beyond the sole banking sector so as to avoid unfair level playing field, regulatory arbitrage and a paradoxical outcome that is favoring and encouraging those who are still “in the shadows.” On top of that, keeping pace with the creativity of all players is no small challenge. BIS central bankers’ speeches  1  –  devoting adequate resources and designing the proper organization of supervision which needs to be intrusive. 2  Preserving diversity  While the objective of expanding the scope of regulation beyond the banking sector may require applying similar – though not identical- regulation to similar asset classes or risks, irrespective of the legal status of the intermediary bearing them, it must also be acknowledged that business models, accounting frameworks, liability structures, time horizons of decisions may differ across sectors and entities. In that respect, it can be argued that that “one size does not necessarily fit all” and that one should preserve and ensure diversity.