samchain/econo-pairs-v1 huggingface dataset:
Therefore, any kind of implementation, initiative and disclosure that might lead to deterioration in risk perceptions and expectations affect the disinflation process and macroeconomic stability in a rapid, harsh and negative way. In this respect, relations with the IMF and the EU are two important anchors, especially as to medium and long-term expectations. These two factors should remain as anchors in the upcoming periods, as they bear significance for the enhancement of confidence in our country, the uninterrupted implementation of structural reforms as planned and the predictability of our economy in the medium and long-term. The Central Bank analyzes all kinds of risks in its scenarios designed to foresee inflation and makes its forecasts accordingly. As I have mentioned earlier, on condition that the cautious stance of monetary policy, fiscal discipline and structural reforms continue, the targets set for 2007 and 2008 seem to be attainable. The target we set for 2007 and 2008 is 4 percent and all our policies are directed towards attaining these targets. It is of critical importance that economic agents use these targets as a reference while drawing up their future plans. The floating exchange rate regime that is implemented today is the sine qua non of the inflationtargeting regime. The basic principle of formal inflation targeting is to target only inflation itself and to make no commitments other than the inflation targets.

WC-FINC aims to reduce the average financial exclusion level in ASEAN to 30% by 2025, and increase the level of infrastructure readiness in ASEAN to 85% (currently at 70%), based on agreed measures of financial inclusion outcomes and preconditions. Particular emphasis is given to capacity building and peer learning. An especially interesting part of this journey has been ASEAN’s incredible diversity which provides a rich and broad canvass for drawing lessons from every country on specific challenges faced and measures pursued to increase financial inclusion. For some of us, the geographic barriers to financial inclusion are the most urgent, for 1/3  BIS central bankers' speeches  others, cost or knowledge and trust are more significant barriers. In different ways, we all have something to learn from each other’s experience on strategies that worked or did not work so well. This is why we are here today. This Forum on financial inclusion was organised in response to technical assistance requests and learning needs of ASEAN countries based on a survey conducted by WC-FINC last year. There was particular interest in Malaysia’s experience and so we volunteered to host this first Forum, but clearly, we are also eager to learn from others. The Forum focuses on 5 key areas which represent core pillars of a holistic financial inclusion system. The first is the development of a national financial inclusion strategy and monitoring mechanism which are crucial to ensure that strategies are well targeted, coordinated and executed.
However, the banks experienced repeated crises, and in 1913, the Federal Reserve was established to stabilise the private banking system. In the post-war years, the value of western currencies was pegged to gold under the Bretton Woods system: an ounce of gold was worth USD 35. All the other member countries – including Norge – agreed to peg their currencies at a fixed rate to the US dollar. The gold standard was abandoned by President Nixon during the Vietnam War, and the traditional fixed exchange rate system was terminated in 1971. The value of money is no longer linked to precious metals. Today, money is so-called fiat money. The term derives from the Latin “fiat”, meaning “let it become”. In his book Sapiens – A Brief History of Humankind, Yuval Noah Harari writes: “Trust is the raw material from which all types of money are minted”. And he goes on: “..., the fact that another person believes in cowry shells, or dollars, or electronic data, is enough to strengthen our own belief in them, […]. Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.”3 Money has value because – and only because – everyone believes in its value. Money is minted from trust. But how is this possible? How can money retain stable value in a system exclusively based on belief and trust? First, money must be usable.

While nominal export turnover fell sharply, real export volumes held up much better. Hence, when the strong appreciation of the Swiss franc raised prices for foreign buyers of Swiss products, Swiss companies responded by cutting export prices, thereby preventing a sharp fall in real export volumes. Further evidence for this ‘margin compression’ comes from our own surveys, which SNB delegates for regional economic relations conduct regularly among Swiss companies. Global demand conditions have deteriorated somewhat in recent months. Emerging market economies in particular – but also some commodity-producing countries – have seen economic momentum fade. By contrast, major advanced economies continue to recover, albeit at a modest pace. On balance, we expect the global economy to grow moderately in the coming years. This should help to partially offset the drag from the overvalued Swiss franc. Thus, following a contraction in the first quarter of 2015, economic activity in Switzerland expanded again in the second quarter. In our estimation, GDP is likely to grow by close to 1% this year. Price stability is not in doubt In the last part of my speech, I would like to present our inflation outlook. Last year, the inflation rate – as measured by the consumer price index – averaged around zero. This year, inflation has fallen well into negative territory.
I don’t think we have the evidence to say that better financial education is enough to escape such a trap. But it surely can’t hurt. A recent study using data from the OECD Programme for the International Assessment of Adult Competencies, or PIAAC, found that rates of financial literacy – defined as the ability to answer relatively straightforward financial questions4 – were lower here than in other advanced economies. According to a recent, UK-specific survey by a private-sector firm, less than half of adults and barely a third of teenagers actually know what an interest rate is. And we also know that the less financially literate tend to face higher debt costs than others and more often face financial distress.5 If financial education can make any difference at all to these problems we have a duty to try and improve it. Conclusion The Bank of England has a direct interest in improving and broadening the teaching of economics. There’s an appetite for it. According to a recent poll, three quarters of the public believe economics should be taught in schools.6 Yet only around a third of schools offer children the option to study economics from the age of 14.7 We hope our online teaching materials will help fill some of the gap. However, we also hope that our “EconoME” package can help with financial literacy. I think economics is fascinating and very valuable. But you don’t need to be an economist to understand the basics of personal finance and their importance for people’s lives.

This is why financial stability is about the way in which banks and financial markets function and how safe and efficient various technical payment systems are – on a daily basis, but also in crisis situations. Money is an excellent means of payment – as long as we believe that it has some value. Should we lose that belief then it only remains for us to begin to exchange goods with each other and there are many accounts as to how clumsy and costly this is, even in modern times. This is why the Riksdag has given the Riksbank the task to maintain price stability However, I do not intend to talk about the inflation target and its background today. Today I will talk about cash and other means of making payments. And this is where, just like in so many other areas, technical developments have to a great extent changed reality. Do you remember the pay packet? When holding wage negotiations, there are still discussions about “how much money will there be in the pay packet”. However, the pay packet is now a metaphor. Those of us who have seen them in reality are becoming fewer. I shall never forget when I worked at a sawmill in Ångermanland and “the chief clerk” from the office came down with the pay packets on Fridays. When one received the pay packet in one’s hand it felt as though one had truly accomplished something during the week.
There are several reasons for this. One is that it may very well prove difficult to design a system for macroprudential policy that functions efficiently and which inventive market participants are not able to circumvent. The policy rate is a blunt instrument, as it has a broad  10  To mitigate these problems the European Systemic Risk Board (ESRB) recommends the EU countries to use a set of intermediary targets, see ESRB (2013). These provide some assistance but do not solve the fundamental problems. 6  BIS central bankers’ speeches  impact on the economy. But at the same time, this may be a strength compared with the macroprudential tools, simply because it is difficult to avoid a policy rate increase.11 Another reason is that if monetary policy is very expansionary over a long period of time, this could contributed to creating incorrect expectations in society regarding how high policy rates will be in the coming period, and how the housing market will develop.12 In this type of environment it may be difficult for macroprudential policy to do the job alone. The assertion that policy areas need to interact and support one another – and that things can go badly if they don’t – is not particularly strange. A clear example from a Swedish point of view of diverging policies causing problems is the developments that led up to the crisis in the 1990s.

This in turn has led to a fall in demand that has tended to be fairly long-lived.4 In many areas, households and companies have moreover experienced difficulty in meeting their loan obligations and the banks have suffered loan losses. The much weaker economic activity and a banking system in need of support have in turn led to a tangible deterioration of public finances. The final result of the high indebtedness and overheated housing market has thus been macroeconomic instability in the form of a deep and prolonged recession. Moreover, monetary policy in many countries has become less effective as the policy rate has reached its lower bound and central banks have had to turn to new and untried methods of conducting monetary policy, and also because households have reacted less than normal to monetary policy stimulus, as they have given priority to consolidating their balance sheets.5 Trying to prevent this type of development with substantial macroeconomic instability must indeed be part of the Riksbank’s task. As I have already noted, one can make different assessments of how great is the risk that this negative scenario will occur and thus of the policy that should be conducted. But arguing that it is not in the Riksbank’s mandate, as a matter of principle, to take into account this type of risk and reduce it to the best of our ability – that I find quite difficult to comprehend.
More data on the granularity of balance-sheet exposures and across types of financial instruments are essential inputs for evaluating propagation effects with contagion and spillover models. Recent initiatives in central bank statistics also address interlinkages beyond the sample of large players – for example, by means of so-called “from whom to whom” information on deposits and loans from financial corporations, or through securities holding statistics with a view to also creating “who to whom” data for various sectors of the economy in the Euro Area Accounts. Dedicated ad hoc surveys, for example in the context of the ESRB’s work at an EU-wide level, should also contribute to shedding light on this topic. Sufficiently granular information would facilitate linking the regulated financial sector with the shadow banking sector. In addition, enhancing information on financial conglomerates – banking groups with substantial activities over and beyond the banking sector – would be essential, as nonbanking activities may be systemically important. In the case of financial conglomerates, contagion and concentration risks can be exacerbated by the increased intra-group complexity and potential conflicts of interest. At the micro-level, improvements to data for characterising interconnectedness are being pushed forward by several initiatives with different objectives and time lines.

Let me mention three: (i) the revision of the reporting framework for large exposures by the EBA (for microprudential supervision), (ii) the FSB’s common template (limited to a small number of globally systemic institutions) to improve data on global banking interlinkages and (iii) a UK exercise to collect interbank data on recovery and resolution plans (with very detailed instrument and maturity breakdowns). While these initiatives address primarily micro-prudential data needs for the time being, their use for macro-purposes could be envisaged, provided that data confidentiality is preserved and that requests are duly justified. For macro-prudential oversight, the importance of reducing gaps in the data on credit and funding exposures beyond jurisdictions and the sample of global players, appears particularly relevant. As the crisis has illustrated, the structure of bank liabilities and the way in which assets are funded are of utmost importance for understanding maturity mismatches and interlinkages. Related to funding, data gaps also arise from limited information on the degree of asset encumbrance stemming from secured funding, as well as from inadequate data on the levels and characteristics of innovative sources of funding used by banks. At present, these elements are essential for analysing fragilities in the funding models of banks established in the EU. Uncertainty about the level of banks’ asset encumbrance is also hampering market participants’ capacity to assess banks’ creditworthiness, thereby reducing the availability and increasing the costs of unsecured funding. Risks to financial stability can also stem from novel sources of funding such as exchange traded funds (ETFs) or liquidity swaps.
This growth trajectory leans on three fundamental premises: First, the impulse we are receiving from abroad, although milder than we could have foreseen some years back, is not particularly low. Of course we would rather live in a world of higher copper prices and two-digit growth in China. But in hindsight, that was clearly 6  BIS central bankers’ speeches  unsustainable in time. Nevertheless, the world growth figures we see today and project for the next two years, do not differ much from what we saw in 2015. The terms of trade should tend to stabilize towards 2017 and external financial conditions are good by historic patterns. Surely we face risks, but don’t we always. Second, from a macroeconomic standpoint, our economy is well balanced. The external accounts are in good order, our fiscal policy is sound, inflation expectations remain well anchored and, beyond the importance of mitigating the risks identified in the Financial Stability Report, local financial markets are well equipped to contribute to that recovery. The third premise is the return of confidence. On this point let me digress. It is not a good sign for a goal of 3.5 percent growth to seem so elusive. Just a couple of years ago we believed that growth between 4.5 and 5 percent was possible. After all, in the last thirty years, the Chilean economy grew by an average of 5.2 percent annually. Certainly many things have happened in the last thirty years that can explain this.

As I said at the beginning, the annual variation of the Consumer Price Index excluding Food and Energy (CPIEFE)—our measure of core inflation that deletes the prices of food and energy from the CPI—has remained below 2%, with annual inflation still negative for goods and persistently around 3% for services. The CPI has approached 3%, mainly driven by the behavior of the more volatile prices (Figure 9). The peso depreciation has an effect on the revision of the short-term inflation outlook. By the end of this year, the annual variation of the CPIEFE is forecast to be at 2.7% (2.3% in June) and that of the CPI, at 3.1% (2.8% in June). Once both indicators converge to 3% during 2019, they will remain in the neighborhood until the end of the projection horizon (Figure 10). It is very likely that in September the annual CPI inflation rate will be temporarily above 3%, because of the low basis for comparison left by the unusual behavior of some foodstuffs in 2017. Regarding monetary policy, we think that the evolution of macroeconomic conditions makes it less necessary to maintain the current monetary stimulus. Therefore, our working assumption for the MPR is that it will begin to increase in the coming months and by 2020 it will stand near its neutral level—ie. between 4% and 4.5%. This assumption is not essentially different from the forecast a few months ago, as it implies gradual increases in the policy rate associated with the recovery of the domestic economy.
BIS Review 98/2009  1  The financial crisis has so far been less serious in Sweden than in many other countries. The Swedish banks are well capitalised. But they are also to a large degree dependent on the securities markets for their funding and they have expanded substantially in the Baltic countries. The greatest risk for Sweden therefore lies with the banks’ credit exposure to the Baltic countries. International developments Slow global recovery Over the past year, the global economy has been hit by the most rapid economic downturn since the Second World War. Economic developments abroad are very weak this year and much weaker than we had previously anticipated. Since September last year, the Riksbank has gradually revised down its forecasts for global GDP growth in 2009 from approximately 4 per cent to around -1 per cent (see Figure 3). The forecasts in the most recent Monetary Policy Report are no exception, but for the first time they only involve a minor downward adjustment. There are numerous indications that the severe economic downturn has now touched bottom. During the spring there were increasing signs pointing to a slowdown in the heavy fall in world GDP. At the same time the financial markets have begun to function more efficiently, which is an important condition for ensuring that the economic recovery will begin. World trade has also begun to show signs of stabilisation during the spring, after the earlier heavy fall in exports.

Loss of confidence in a bank sets in when depositors fear that this may not happen. An asset management contract is quite different because the promise is at its simplest to return the proceeds of the investment strategy, which may be more or less than the amount invested. It is cruel to remember the Woody Allen jibe at this point that a stockbroker is someone who invests your money until it is all gone. Economists might call the deposit and asset management contract “corner solutions” in that they have a robust definition and lie at opposite ends of a range. If so, With Profits falls in between, and it is in this ground that issues can arise. The proposition was essentially to offer investors a blended exposure to cash, bond, property and equity return with some degree of smoothing of overall returns, essentially at management’s discretion, to reduce market timing risk. The marketing tended to make much of these products’ potential to earn above cash returns without the volatility of pure equity exposure; and this in turn conditioned policy holders’ expectations, a fact first acknowledged explicitly in the UK’s prudential solvency regime for insurers in 1967 (bear in mind that this was not the original prudential regime, which was introduced in 1870).
On this, I see substantial scope for the pace of financial integration in East Asia to be gaining more momentum going forward as the constraints that used to limit the pace of integration begin to unwind. First, the external positions of the economies in East Asia have now become much stronger, with current account surpluses, substantially lower external debt, and larger international reserves. Second, Asian savers themselves increasingly want to diversify their savings abroad in search for better yields while Asian firms also look for better opportunities to lower their costs of fund by tapping funds from external sources. Reflecting these two factors, we are seeing a reorientation of policy in the region to make cross-border capital outflows more liberal without compromising the risk on macroeconomic stability. And the third factor is that Asian financial institutions are now back in good health after a period of restructuring and consolidation. So, we are likely to see Asian financial institutions becoming more active in intermediating cross-border capital flows within the region, as they explore new business opportunities based on their expertise and knowledge of the region. All these factors, I think, will set in train a stronger momentum of cross-border capital flows within the region in the period ahead. And under such circumstances, what then should be the role of policy? Government policies, in my view, have played an important role in the development of East Asian financial markets.

The important ones have been the Asian Bond Market Initiatives under ASEAN+3, the launching of the Asia Bond Funds I and II under EMEAP, and the Roadmap for Monetary and Financial Integration undertaken by ASEAN. The key rationale underlining this cooperation is the desire to develop resilient and robust regional financial markets, especially the capital markets. Such markets will allow the private sector in East Asia to better manage risk, as well as to reduce the dependency of the region on its banking sector. Moreover, better financial integration means saving surpluses of Asia will be better mobilized to support investment activities in Asia, thereby increasing the efficiency of resource use. And more importantly, greater cross-border financial flows will help sustain and expand intra-regional trade and investment onto the next higher levels. But despite the recent progress, many observers have noted that, while the progress is well and good, financial integration in East Asia seems to lag behind that of trade integration. As a result, East Asia as a region continues to be more integrated financially with markets outside the region than within the region. I think this is a valid and fair observation, but such observation needs not mean that financial integration in East Asia, going forward, will continue to be a slow process. In my view, specific factors have come into play in limiting the pace of integration in its initial stage, but as these factors become less binding, one will begin to see a more solid and faster pace of financial integration.