samchain/econo-pairs-v1 huggingface dataset:
However – with the spirit of regional financial cooperation for development of Asia as a whole in mine – countries with more advanced financial systems may decide to offer these guarantees for a limited period of time. Proposals for development and integration: enhancing market infrastructure Currency arrangements Issuing bonds under a basket of Asian currencies may achieve a slightly lower cost of funding, given that the currency risk of a basket is lower than the sum of the risk of the underlying currencies. This lower risk should be reflected in a lower cost off capital for borrowers. With regards to liquidity, if bonds in the region were to be issued in a basket of currencies that could be traded in many Asian bond markets, liquidity of such a bond should be better than that of any individual bond. In this regard, deep and liquid bond markets should also reduce transaction costs, making the regional market more attractive than issuing locally. Such a basket of currencies may enhance the natural hedging ability of market participants in each country in the region. Given the importance of intra-regional trade, exporters cold better match the currency exposures of their assets with their liabilities. Cooperative actions needed to facilitate growth of regional bond markets The use of these mechanisms to promote development of bond products must not detract countries from taking serious steps to developing their bond markets.

The world is undergoing dynamic shifts The world around us is shifting dramatically. To understand this shift, we should pay attention to five megatrends. The first is the shift in global economic order with the rise of Asia, including the rising prominence of ASEAN. The gravity of the global economy is moving to the East. Being the sixth largest economy and home to around 650 million people, there is an abundance of opportunity, hope and dynamism in this region. The financial sector will no doubt, be a key player in further catalysing the growth of ASEAN countries. The second is the risks brought about by climate change. Tackling climate change may be one of the biggest challenges for humanity in building a sustainable and prosperous future. It could lead to devastating, wide ranging and irreversible damage to our economy, society and the way we live. Economic losses in itself could be very significant, as high as USD20 trillion. Insured losses from effects of climate change have already increased five-fold in the past 30 years. The third is the rising income inequality that can threaten the fabric of our society. Consider this. The top 1% of the population has captured twice the global income growth of the bottom 50% since 1980. Worse still, inequality has persisted despite large transfers of public to private wealth in many countries. The fourth is the rising populism and protectionist policies. This can be seen in inward looking policies and anti-establishment views that have become more entrenched in parts of the world.
The idea behind an efficient monetary policy can be illustrated using a modified Taylor curve, named after the economist John Taylor. 6 As I have said, under a flexible inflation targeting  4  Adolfson, Malin, Stefan Laséen, Jesper Lindé and Mattias Villani (2008), "Evaluating an Estimated New Keynesian Small Open Economy Model", Journal of Economic Dynamics and Control 32, p. 2690-2721. 5  Material for assessing monetary policy 2006-2008, Sveriges Riksbank, www.riksbank.com. 6  The original Taylor curve relates to variances of outcomes ex post. Se Taylor, John B. (1979), "Estimation and Control of a Macroeconomic Model with Rational Expectations." Econometrica 47, p. 1267-86. A modified  6  BIS Review 29/2009  regime the central bank aims to stabilise inflation and resource utilisation; that is to minimise the deviations from the inflation target and the normal level for resource utilisation. In Figure 3, the sum of squares for the inflation-gap forecast is measured along the horizontal axis and the sum of squares for the output-gap forecasts along the vertical axis. The curve through points A, B and C is the modified Taylor curve, that is, all the efficient combinations of forecasts for inflation and resource utilisation respectively that it is possible to achieve in a certain decision-making situation with the help of different interest rate paths. Points to the left and below the curve cannot be reached due to the initial state of the economy and the transmission mechanism between inflation, resource utilisation and the repo rate.

This is what I intend to talk about today. What should we consider when we evaluate monetary policy? What are the principles for a good  1  The evaluation of monetary policy in New Zealand and Norges Bank Watch 2002 are available on my website: www.larseosvensson.net. BIS Review 29/2009  1  evaluation of monetary policy and what is practically possible? How can principles and practice be developed compared with how evaluations are carried out today? Here I present a number of preliminary proposals for such development. Why not just examine whether inflation deviates from the target? An increasing number of central banks focus their monetary policy on achieving an inflation target. My discussion today will therefore be about evaluations of monetary policy with an inflation target. Given this, you may ask why an evaluation of monetary policy should be so complicated. When there is an inflation target, is it not simply enough to compare the actual outcome for inflation with the inflation target; that is to evaluate monetary policy after the fact? There are at least two circumstances that make such an evaluation inadequate. Unforeseen shocks affect outcomes First, monetary policy does not provide complete control over inflation. A central bank is therefore unable to ensure that inflation will be exactly on target at every point in time. In actual fact, monetary policy is conducted under conditions of great uncertainty.
Even varying just this one thing, the two-year inflation forecast was half a percentage point higher in the second case than in the first. And, in the meantime, we also know that these global pressures are not the only determinant of future inflation. Arithmetically, domestic pressures have been less important so far. But the domestic labour market has also come under increasing strain through the course of this year. I now want to have a look at the latest evidence in this area. 10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10  Unemployment higher than before the pandemic but the labour market nonetheless looks very tight As we saw earlier, while the economic recovery this year has been predictably rapid, cumulative growth over the period of the pandemic as a whole – taking account of the deep trough from which the economy was having to recover – has not been as impressive. In the third quarter of this year private-sector output grew by a little less than we’d anticipated in August and was still 2% lower than at the end of 2019Q4. In contrast, employment growth was stronger than we’d expected and unemployment fell further (Chart 13). And, although in the three months to September it was still a little (0.3 percentage points) higher than just before the pandemic, and still slightly above the MPC’s existing estimate of the long-run “natural rate” of unemployment, other indicators point to a much tighter labour market.

Peter’s review of “What’s the Use of Economics”, the book of proceedings from a conference organised and edited by Diana Coyle, another former student who gave the second of these lectures, held at the Bank of England nearly a decade ago, is Peter at his kaleidoscopic best and as relevant now as when he wrote it. 2  For me as an undergraduate student in the early 1980s it was incredibly stimulating to be learning from Peter about Keynes’, Hicks’ and Leijonhufvud’s contributions to disequilibrium economics, all framed by Peter’s  own quantity rationing exposition of multiple equilibria. It was even more exciting to be taught by someone who was writing about the real-world economic problems of unemployment and how policy could help to achieve a better equilibrium – Peter penned a comprehensive overview article with Derek Morris in the second edition of OxRep in 19853 which is still a very good read today.4  It should therefore come as no surprise that one of the many other topics that Peter turned his prodigious mind to was QE and monetary policy.
The issues now range from the choice between the use of rule versus discretion on bank capital, to the use of leverage ratio, and to the implementation issue that includes how to exercise the measures effectively in the context of a financial system that is non-complex, as is the case of the SEACEN economies. On this, I have a view that vigorous stress-testing by supervisors and banks can help keep the effects of procyclicality manageable. I hope this conference will further discuss this issue. Finally, the complexity and cross-border linkages of financial systems will continue to increase, not decrease, following this crisis. On the other hand, the right and effective global regulatory and supervisory structures to handle cross-border implications are still evolving, while information flows and cooperation among regulators and supervisors, at this time, continue to be limited. It is clear that without significant improvements in both information flows and cooperation among supervisors, it will be difficult to prevent or contain future financial crisis spillovers effectively. Ladies and Gentlemen, this eleventh SEACEN conference provides us with an excellent opportunity to discuss these current and important issues. Our challenges are similar, and through our coordinated views and collaborated efforts, the SEACEN economies collectively will be in a stronger position to address these challenges. I wish all of you a successful conference with a fruitful exchange of ideas and a wonderful collaboration.

A bank may thus seek to increase the expected return by taking on higher risk without having to pay for this in the form of higher borrowing costs. Market discipline is weakened when operators are sheltered from taking the full consequences of their own actions. This is referred to as moral hazard. The authorities must regularly undertake a critical review of regulations to determine whether they are formulated with a view to achieving the overriding objectives at minimum cost. 3. Work on crisis prevention since the banking crisis  The lessons drawn from earlier banking crises are the primary means of preventing new crises. The debt crisis in the 1920s was at the root of the caution that continued to be exercised many years later. Operators are still cautious as a result of the banking crisis in the 1990s. The memory of earlier experiences fades over time. It is imperative to establish framework conditions that deter borrowers and lenders from taking excessive risk. The central framework conditions include effective legislation and regulations, a robust payment and settlement system, and effective supervision of institutions and markets. The capital adequacy regulations are more stringent today than when the banking crisis erupted. Sound capital adequacy strengthens banks’ capacity to bear unanticipated losses. The size of the banks’ capital base also sets limits for lending growth. The capital adequacy requirements are being revised. This will also have implications for Norway. The new Bank Guarantee Act is another important change to regulations. The Act provides for a deposit guarantee.
To further enhance this facility, with immediate effect: a)  3  We will accept AAA-rated $ debt securities issued by sovereigns, supranationals and sovereign-backed corporates as collateral in the Standing Facility in addition to SGS. Given this change, we will also permit banks to treat these securities as Tier 2  Conducted US-based recruitment firm Hudson. BIS Review 91/2009  3  liquid assets, with the same zero risk weighting as SGS. This will help banks to better manage their risks and liquidity profiles. b)  We will also enter into cross-border collateral arrangements with other central banks to accept well-rated foreign currencies and government debt securities as collateral in the Standing Facility. Last month, I signed an MOU with the Governor of De Nederlandsche Bank N.V., the Dutch Central Bank. Discussions are ongoing with several other central banks. Globally, government bond issuance is rising while banks’ balance sheets which are typically used to underwrite these issuances are shrinking. We have seen in some jurisdictions several instances of poor or even failed auctions of government bonds due to unexpectedly weak sentiment or concerns about ballooning government debt and fiscal deficits. Singapore is different. The Government does not issue bonds to finance its budget deficit. Investors understand that the Government issues SGS for the sole purpose of building a risk-free yield curve for the corporate sector to price its debt. But the SGS market can be affected by contagion of weak sentiment spilling over from other markets.

Therefore, it is important for the Islamic financial services industry to continually promote human capital development and expertise to create a larger pool of experts and high calibre professionals. This involves attracting not only the existing talent pool, but also building a robust pipeline of skilled human resources for the future. This is vital to drive the development of the industry to greater heights. Ladies and Gentlemen, On this occasion of the official launch of Hong Leong Islamic Bank Berhad, it is with pleasure that I congratulate Hong Leong Bank Berhad for its interest and commitment to contribute to the success of Islamic finance by allocating resources in having a dedicated subsidiary to drive its Islamic banking business forward. The establishment of the Islamic subsidiary is a positive step forward in the aspiration of making Malaysia as a leading and attractive integrated Islamic financial hub. I wish Hong Leong Islamic Bank Berhad every success in its endeavours. Ladies and Gentlemen, Dengan lafaz Bismillahirrahmanirrahim, saya dengan sukacitanya merasmikan pelancaran "Hong Leong Islamic Bank Berhad". Terima kasih. 2/2
Thus, GDP will grow in the 5.5%–6.5% range in 2011, with a smaller contribution of supplyside sectors – i.e., fishing, mining and hydroelectric generation – than foreseen in the latest IPoM, while the other sectors will converge to trend growth as the monetary and external impulses are normalized (table 2). Prospects for trend growth are similar to September’s, that is, around 5%. In this scenario, which also features improved terms of trade, the current account of the balance of payments will post a surplus of 0.3% of GDP in 2010, contrasting with the deficit forecast in September, owing mainly to better export prices. However, estimations yield that in 2011 the current account will reach a deficit of 1.4% of GDP. Y-o-y headline inflation has remained in the lower zone of the tolerance range, while the core measure CPIX1 is still in negative territory. This low core inflation has been partly offset by increases in the prices of foodstuffs, both perishable and non-perishable and, most recently, by increased fuel prices (figure 8). Since last July, there has been a renewed, markedly ascending trend in food prices in the global market. Given the experience of 2008, it has become again cause for concern for policy-makers in some countries. As shown in a box in our IPoM, in Chile a little more than one percentage point of inflation is due to food prices. Until now, the recovery of margins in the aftermath of the crisis has allowed cushioning the local inflationary effects of world price increases.

This time around, the US strongly increased fiscal expenditure and borrowing, which was used to finance the purchase of overpriced housing. As we now know, and warned insistently before the crisis burst, this mix was bound to lead to severe adjustments, sooner or later. High terms of trade, capital inflows and growth rates have resulted in exchange rate appreciations in most emerging and oil-exporting economies (figure 5). In real terms, the current level of the exchange rate is at its lowest in the past decade in most emerging economies (figure 6). Vigorous economic growth in these economies means also strong currencies, while the opposite is true in developed countries. As I said before, the high indebtedness of developed economies holds back domestic demand growth. Meanwhile, in emerging economies domestic demand growth is thwarted by constraints in domestic supply, which require redirecting purchases towards imported goods. The adjustment of the global economy calls for a change in demand composition, and the exchange rate adjustments works in that direction. It is logical to expect that once the developed economies recover their strength, their currencies will follow suit. The transition may take some time, however. Although the adjustment is good for the world economy, it entails tensions that may require exceptional policies. Thus, several emerging economies, Chile included, have taken action to moderate the exchange rate adjustment.
Mark Carney: Global economic outlook, financial reform and UK monetary policy Remarks by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the Davos CBI British Business Leaders Lunch, Davos, 24 January 2014. *  *  *  When a banker invites a regulator to a meeting on a mountainside, the regulator gets suspicious. At 5000 feet, “cliff effect” takes on a whole new meaning. That’s one of the reasons why I am pleased to have so many distinguished witnesses here today. While Douglas Flint may have had terminal velocity in mind for me, I am more interested in discussing the prospects of the global and British economies achieving escape velocity. In physics, escape velocity refers to the speed necessary to escape from a planet’s gravitational pull. The economic analogue is the momentum necessary for an economy to escape from the many headwinds following a financial crisis. A few quarters of above-trend growth driven by household spending represent a good start, but they aren’t sufficient. It will take sustained growth, more balanced demand and a recovery in the supply side for advanced economies to break free into a more normal universe. Today, I would like to speak to the contribution of central banks to make this happen. 1. Global economic outlook  Over the past year, the global economy has picked up and tail risks have decreased.

4  BIS central bankers’ speeches  And the microprudential framework has indeed been strengthened post-Crisis. The Basel III reforms will go quite some way to make banks more resilient and financial systems safer. •  The quantity and quality of capital have been increased. •  There is for the first time, a global liquidity standard. •  There will soon be a direct cap on bank leverage. •  Systemically important banks will be subject to higher loss absorbency and more intrusive supervision. Besides these reforms, I would add that traditional microprudential limits that apply “through the cycle” are just as important in helping to maintain financial stability. If volatility in the real estate sector has repeatedly been shown to contribute to financial imbalances and distress: •  does it not make sense to put limits on financial institutions’ exposures to real estate? •  does it not make sense to require that loan-to-value ratios for property loans be less than 100%? •  does it not make sense to require the loan underwriting process to incorporate an assessment of the debt service ratio? I do not know if the Global Financial Crisis could have been avoided if interest rates in the US had been higher in the preceding years as some have argued. •  I do suspect though that if there had been prescribed loan-to-value ratios and debtservice ratios, the sub-prime problem may not have grown to such proportions.
And if structural reforms are well-designed along these parameters, they can in fact have a largely neutral, if not positive impact on short-term demand – and even in adverse cyclical conditions. Credibility of reforms First, if reforms are credible their positive effects on short-term demand, via confidence, can more than compensate for any negative effects on inflation via increased supply. This is because, for firms, an upward shift in potential growth implies higher expected revenues and higher future profitability, which should in turn encourage them to bring forward investment into the present. And investment, remember, raises both supply tomorrow and demand today. It can therefore in no way be construed as being detrimental to our monetary policy objective. A similar logic applies to households and their life-cycle income. Reforms that raise expectations of life-cycle income should immediately support current consumption. To give just one example of this effect, an extension of the retirement age should lift not only medium-term supply – by expanding the active population – but also short-term demand, by reducing the need for precautionary savings ahead of retirement. But credibility is crucial in determining how quickly these positive effects materialise. If there is uncertainty about the timeline over which reforms will be implemented, or about the commitment of successive governments to maintaining them, it will take longer for firms and households to adjust their expectations and the benefits of reforms will be delayed.

Direct control on money growth, credit growth and interest rates were the operational tools of monetary policy aiming at the control of money supply, which served as the intermediate objective. A free floating regime of exchange rate was chosen to match the monetary targets. Other forms of exchange rate regimes were never discussed due to lack of adequate foreign exchange reserves and therefore the incapability to support a fixed rate of domestic currency. In addition the floating regime was chosen as an automatic stabilizer of the fast growing current deficits. Therefore the choice between different alternatives of stabilization program was conditioned (and easy). In general this regime has resulted successful and still continues to be the operating framework of the monetary policy. I believe that its success was conditioned by low financial intermediation and under developed financial markets . The presumed stable relationship between money and transactions and permitted for confident monetary programming based on the Fisher’s equation of exchange. However, as the efficiency and speed of financial intermediation increased and financial innovation set in motion, this policy setup become obsolete. Bank of Albania moved away from direct control on money in favor of indirect control of money supply in the economy. In the context of reviewing our approach to monetary policy during the recent years we have dedicated the bulk of our research and analytical resources to better understand the relationship and causality between inflation and economic factors that influence it in the context of Albanian economy.