samchain/econo-pairs-v1 huggingface dataset:
Similarly, keeping a floating exchange rate policy points in the same direction, as it provides the proper incentives for prudent management of external liquidity and borrowing. It also helps in the economy’s process of real adjustment when facing a deterioration in the external scenario. In terms of both the exchange rate and access to credit, it is of high importance not to distort the incentives of financial institutions and firms to prudently administer their risks in a complex environment. To sum up, I would like to point out once again that the Board of the Central Bank of Chile strongly believes that as a country, and particularly as a Bank, we are well prepared to confront periods of stress. We are certainly not immune to the events outside our borders, and risks are very high today. We have at our disposal the necessary tools to mitigate the effects of more adverse external conditions but, most importantly, we can and will use them whenever the situation calls for it. Solid proofs of this are the measures we have taken in the last weeks. Thank you.

Progress has been made in several areas, but the problems’ complexities and the political difficulties to deal with them are huge. This, coupled with the delicate position of consumers and firms, has translated in deteriorating economic expectations in the region, anticipating a recession during this year. The situation in the United States, while less severe than that in Europe, is also complex, especially because of the slow recovery and little room for fiscal and monetary policies to stimulate the economy. The emerging world, Chile included, will undergo a period of slower growth than in the past few years. Market consensus forecasts, last week’s IMF projections, and also those in our December 2011’s Monetary Policy Report point in the same direction (table 1). Most recently, the information coming from the U.S. shows a somewhat better performance than was forecast some weeks back, but does not modify medium-term problems and risks affecting its economy. In fact, last week the Federal Reserve extended from mid-2013 to end-2014 the period during which it would hold the fed funds rate at the minimum level where it is today, which reflects the magnitude of the problem. Meanwhile, information from China reveals its economy is growing strongly. It also shows a relief of inflationary pressures in that country, providing more space for policy-making. The prices of commodities, especially copper, have recovered significantly in the past few weeks. Actually, today’s price of this metal is substantially higher than we had forecast for the year.
14 The evidence for this is discussed in more detail in Section 2 of the Discussion Paper. 13  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  Chart 6: Shadow carbon price in scenarios shown in Chart 2  Source: IIASA [NGFS Climate Scenarios Database, using marker models]  The question is not whether the shadow carbon price has to rise – the question is when. To the extent that markets are assuming an unrealistically low or distant pickup – and it seems increasingly clear that they are – financial assets today may be mispriced. An ‘adjusted market neutrality’ principle that took this mispricing into account could suggest a very different asset allocation in investment portfolios, including the CBPS. Until recently, the Bank of England lacked the mandate to make such adjustments. In March, however, the Chancellor updated the MPC’s ‘remit letter’ to confirm that the economic strategy of the Government – which the MPC is required to support as a ‘secondary objective’ – includes supporting the transition to a net zero emissions economy.15  Portfolio decarbonisation is not enough: look forward, work together to drive change  Now comes the tricky bit: translating these conceptual insights into practice. At first sight it might seem the answer is simple: just sell all our high-emission bonds, and use the proceeds to buy low-emission ones. The carbon footprint of the CBPS would fall sharply.

Andrew Bailey: Meeting the challenges of a changing world – the view from the Prudential Regulation Authority Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the Association of British Insurers Biennial Conference, London, 9 July 2013. *  *  *  Thank you for inviting me to speak today. It is just over three months since the new system of financial regulation in the UK came into being. There are over 700 insurers in this country now subject to prudential supervision by the PRA and conduct supervision by the FCA (in addition, insurance brokers are entirely supervised by the FCA). Today, I want to talk about how the PRA is going about the prudential supervision of insurers. There are good reasons to argue that the insurance industry has been relatively little affected by the financial crisis in terms of instability in the industry, but of course that does not extend to arguing that the industry is unaffected by the consequences of the financial crisis, that could never be the case. So, there are very real challenges for insurers. Why do we single out banks and insurers for prudential supervision by the PRA?
Between 2012 and 2030, the increase in the working age population is estimated to average 0.05 per cent per year, which in effect amounts to stagnation. In all, this means that measures will need to be taken to boost the supply of labour in the years ahead. These could be achieved by reducing the numbers on sick leave and if fewer people were to take early retirement. The trend also implies greater demands on people to enter working life at an earlier age and on increased labour force participation among the elderly. Moreover, we currently have an unutilised labour force reserve in the form of our immigrant population. The employment rate among this group averages about 30 per cent lower than that of native Swedes. Measures to improve integration of immigrants into the labour market could make a positive contribution to the labour supply. For example, growth in the number of hours worked could be 0.4 percentage points higher per year up to 2008 if the Government’s target of halving sick leave were to be attained. Furthermore, if the labour reserve represented by our immigrant population were to be utilised, the number of hours worked could rise further. If this reserve were to be utilised to the same extent as native Swedes, the number of hours worked could rise an additional 0.1 percentage points. This would have a positive impact on potential growth.

Yet the climate risks we face have not subsided, far from it: if the climate transition is put off and carried out in a disorderly manner, the associated costs to our economies will be all the greater. The current context of uncertainty and volatility means that we should increase our vigilance regarding all risks, including those related to the climate, by making progress on the disclosure of climate-related information – which will become compulsory for European banks in 2023 under ESG Pillar 3 – and on how to operationalise transition plans and stress tests. On this latter issue, three European supervisory bodies will carry out an essential stress test in 2024 to assess in particular the transition risks to the entire financial sector linked to the implementation of the "fitfor-55" package. The idea that we could make a short-term trade-off between climate risks and economic and financial risks is misleading: the two are unfortunately increasing in parallel, and, in the longer term, the Russian crisis is yet another reason for us to accelerate our energy diversification and sovereignty through the use of non-fossil sources. What we need then, over the next two to three years, is to chart a "path of compatibility": if we are to be consistent, any measures to support non-fossil fuels, on the supply or demand side – the famous "price shields" – must remain targeted and temporary.
The macroeconomic landscape for MAS has become more complex, with external and domestic forces interacting in unprecedented ways. •  Externally, Singapore is facing a wall of money and rock-bottom interest rates that could potentially set off asset market bubbles that could in turn have knock-on effects on consumer price stability and financial stability. •  Domestically, we are facing a demographic cliff that will tighten labour markets and could potentially set off a wage-price spiral that could unhinge inflation expectations. Macro policies will be on heightened alert to ensure that economic stability and financial stability are safeguarded as Singapore navigates this new landscape. We are well placed to deal with the risks ahead. •  Our exchange rate-centred monetary policy remains fit for purpose and will continue to focus on keeping inflation contained. •  Our macroprudential policies will complement monetary policy and financial supervisory policies to secure sustainable asset prices and financial stability. 8  BIS central bankers’ speeches  •  Most of all, Singapore’s fundamentals remain sound. Fiscal prudence, financial discipline, minimising debt and living within our means, will provide us policy space and buffer to weather whatever comes ahead. This is an advantage most countries do not have. I wish you a successful and enlightening conference. Thank you. BIS central bankers’ speeches  9

To achieve this objective, we have made it mandatory for the conventional banks to establish a dedicated Islamic banking division within the bank, create and observe a minimum Islamic banking fund, opening separate clearing account with the Central Bank to facilitate effective separation in the payments system as well as to have a separate accounting disclosure. Having these policies and infrastructure in place, we have been able to operate the dual banking system in a structured and systematic manner. Ladies and Gentlemen, Although the regulations are in place, close oversight and updated statistical reporting, supported by close monitoring through the early warning system, are necessary as measures to avoid banking failures. The global experience has shown that not all banking failures are due to economic and financial crises. The global experiences has shown that banking failures can be caused by the lack of good corporate governance in the banking institutions. Lack of transparency, lack of oversight, weak internal controls, lack of checks and balances, incompetent directors and abuse of power are among the elements of poor corporate governance. Hence, even the best regulations and supervision and the best financial safety nets cannot prevent such banking failures. The regulation of banking institutions therefore needs to be complemented and reinforced with good corporate governance.
Higher potential growth can also influence real interest rates in the long term as households seek to smooth consumption over time. Higher potential growth generates expectations of higher future income. Households may then want to borrow against expected future income and thereby reduce saving already today. Lower saving implies higher real interest rates. The time preference rate can be looked upon as an expression of households’ impatience in consumption. The higher the degree of impatience, the more households will want to consume today at the expense of future consumption, and the higher the real interest rate has to be in order to provide sufficient savings to meet investment demand. It is important to stress the long-term perspective of this analysis. In the really long term, it is potential growth and saving preferences that determine the relationship between desired saving and desired investment and thereby also the real interest rate. In the short- and medium-term, however, the economy is regularly exposed to shocks that influence economic developments, and thereby also the interest rate. It is not unlikely that we might see sizeable deviations of actual rates from the theoretical rates over longer periods. Such deviations may be exactly what are needed to bring the economy back towards a new and sustainable equilibrium. Moreover, uncertainty and risk premia are often disregarded in the theoretical world. In the real world, different types of risk premia exist that can lead to deviations from these stylised theoretical considerations.

Moreover, with low inflation expectations, the private sector may postpone expenditures, thereby weakening economic activity. In fact, inflation is now below target in most advanced economies. As a result central bankers are asking themselves whether this decline is caused by common shocks, by a coincidence of domestic factors or by structural changes in the reaction of prices to the output gap. While recent price developments in the US and in the UK are largely explained by global disinflationary forces, oil prices, currency appreciation and the sensitivity of inflation to unemployment in a context of ongoing economic recovery,1 my overall assessment regarding the euro area situation is that a sizeable domestic component is at play. This has motivated the bold steps taken by the Eurosystem to counteract the risk of inflation remaining too low for too long a period of time. Part A – What happened to Euro-area inflation Let me now describe recent price developments in the euro area in more detail. HICP inflation has fallen consistently below our target since January 2013, declining from 2% to −0.1% in March 2015. Forecasters have repeatedly been surprised by this evolution. Three main reasons have been put forward to explain this. A first explanation is that forecasting has been complicated by the fall in global crude oil prices and raw materials and its transmission to other sectors. In this regard, recent research conducted at the Banque de France supports this view by showing that forecast errors for oil prices explain about half of the errors for headline inflation.
11  Mervyn King, the former governor of the Bank of England, has used a closely-related means of illustrating why monetary policy should give consideration to financial imbalances, where he instead uses the so-called Taylor curve – a curve that illustrates a central bank’s trade-off between stabilising inflation around an inflation target and stabilising the real economy (GDP, unemployment, employment and so on) around a long-run sustainable level. See King (2012). 12  This reasoning is thus based on the notion that risks linked to financial imbalances can be taken into consideration in monetary policy by incorporating their effects in the longer-run forecasts for inflation and the real economy (for instance, measured in terms of GDP). There are also arguments in favour of the central bank having the stabilisation of financial imbalances as an explicit objective for monetary policy. The financial frictions that give rise to the imbalances could, for instance, entail welfare costs for society, over and above the effects on inflation and GDP, which the central bank may have reason to counteract directly, see for instance, Cúrdia and Woodford (2009). Monetary policy would then have three factors to weigh against one another: stabilisation of inflation around the target, stabilisation of GDP around a sustainable level and stabilisation of some relevant measure of financial imbalances. Regardless of the theoretical argument, this way of including financial imbalances in the deliberations could have practical benefits, for instance by reducing the need to incorporate the risks in the forecasts for inflation and GDP.

As set out in the Financial Stability Board's (FSB) latest progress reportOpens in a new window in October 2022, much progress has already been made including: agreeing global quantitative targetsOpens in a new window and a methodology for measuring progress towards them, undertaking stocktakes and analyses of existing payment systems and arrangements, and publishing proposals and best practice for achieving progress. And there have already been tangible changes, for example the move by SWIFT and some key systems to ISO 20022Opens in a new window messaging standards, increased operating hours and the launch of interlinking arrangements such as between Thailand's PromptPay and Singapore's PayNow. Now the work is at an inflection point: many of the original roadmap actions have been completed, providing a solid foundation from which to make real changes to the crossborder payments experience. In February 2023 the FSB published a set of priority actions that will be taken forward to meet the cross-border payments targets by 2027. The actions are grouped in three priority focus areasOpens in a new window: Payment system interoperability and extension; Legal, regulatory and supervisory frameworks; and Cross-border data exchange and message standards. We need to work together to make payments faster, cheaper, more accessible, and more transparent. Some of this work needs to continue to be international for example, agreeing approaches to harmonising rules and standards.
If this big run up in debt was not used to finance a surge in spending, where did it all go? The answer to this question lies in developments within the housing market. House prices trebled in the ten years to 2007. And mortgage debts were accumulated to pay for the housing that had become so much more expensive. The conventional wisdom that the sharp increase in household debt was associated with the house price boom of the past decade is well founded. But what is less often appreciated is that much of that rise in household debt was matched by a comparable increase in the value of financial assets held by households. The value of housing assets purchased by households did increase, through additions and improvements to the housing stock. But the main counterpart to the rise in borrowing was increased saving. To make this point more concretely: while households accumulated an additional £ of debt between 2000 and 2008, they also acquired over £ billion of financial assets over the same period. 2 What was going on? To caricature things only a little, older households (or rather those trading down within the housing market) benefited from selling homes at much higher values. They were the winners. The big losers were younger households (or those trading up), paying more for those houses and accumulating higher debts. The money borrowed by young families ended up in the bank accounts of older households. That money wasn’t used to fuel a spending boom.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the CBI Northern Ireland Mid-Winter Dinner, Belfast, 22 January 2013. *  *  *  I am delighted to be in Belfast to deliver my final regional speech as Governor. After the Bank obtained independence in 1997, we decided to establish a physical presence in Northern Ireland for the first time. And I was able to announce the opening of the Agency when I visited Belfast in May 1999. Since then the links between the business community and the Agency have gone from strength to strength. None of this would have been possible without the commitment of a remarkable group of Bank of England Agents: first, Nigel Falls, then Phil Eckersley and now Frances Hill, all supported by Gillian Anderson, today the Deputy Agent. During that same visit, I met with a group of politicians from right across the political spectrum. They were surprisingly eager to talk with, not at, each other – because they wanted to exchange views about the economic future of Northern Ireland, and to get away, at least for a while, from the divisive nature of daily politics. You would have been hard put to identify the affiliation of those politicians from their views on how to promote economic prosperity in Northern Ireland. And this is the key to the future.
BIS central bankers’ speeches  3  Lately, efforts have been made towards a closer regional integration, making the region more attractive to potential foreign investors. With a deeper regional integration, a better anchoring in the EU convergence process and more funding, the Eastern and Southeastern Europe has much to offer to Europe and to the global economy. The periphery of the euro zone or the future new members provide many attractive investment opportunities in development projects in infrastructure, trade, exploitation of natural resources, energy and production capacities. Most importantly the development of these strategic sectors is designed within the framework of the European development plans and the future to be larger European economy. Therefore investing in the region would mean to invest in the future of the European economy itself. Dear Participants, A prosperous and integrated European Economy and confident single currency provides a better anchor for the future of our economic, financial and institutional convergence and therefore additional benefits for the European economy itself. European economy is an important partner in global scale, accounting for a substantial share of global demands, financing, education and technology advancement. The strength of European economy is mutually beneficial for Europe and its partners, including China. Considering the past and the present state of economic, social political and intellectual affairs, I remain firmly convinced in the ability of the Europe to rise up to current and future challenges to reintroduce itself as the land of opportunity and prosperity.

And so when exchange rates move sharply, which they do, the currency mismatch results in large losses. 12. But I suppose we all learn from mistakes. We in Hong Kong did so the hard way in the early 1980s when the situation was compounded by uncertainties about the political future of BIS Review 115/1997  -3-  Hong Kong. We had our currency crisis in 1983, after nine years of operating with a floating exchange rate, against volatile capital flows, without any effective mechanism for monetary management or currency anchor. Our banks had been overly exposed to credit, maturity and currency risks, and a total of seven banks had to be rescued directly or indirectly through the use of public funds. In short, we had been complacent. 13. But, thankfully, never have we been in any doubt about the need to maintain free and open markets, and a liberal financial system. The correct response to financial turmoil is not to resort to controls or to apportion blame, but to put one’s own house in order, and ensure that one is in a position to cope. This we did through a series of reform measures to strengthen our monetary and financial systems implemented in the past ten years. This was, in part, also spurred by the desire to minimize the risk of possible financial disturbance ahead of and through political transition, and to provide the environment for Hong Kong’s continuing development as an international financial centre, as required under the Basic Law.