samchain/econo-pairs-v1 huggingface dataset:
MONETARY POLICY REPORT PRESENTATION BEFORE THE FINANCE COMMISSION OF THE HONORABLE SENATE OF THE REPUBLIC∗  Rosanna Costa Governor Central Bank of Chile 8 June 2022  ∗  The June 2022 Monetary Policy Report can be found at http://www.bcentral.cl. Introduction Mr. President of the Finance Commission of the Senate, senator Juan Antonio Coloma; senators members of this Commission, ladies, gentlemen, Let me begin by thanking the Commission for inviting the Bank to share our views on recent macroeconomic developments, their outlook and implications for monetary policy. This view is presented in detail in the June 2022 Monetary Policy Report, which we have published this morning. This background is also the rationale behind the decision taken by the Board at yesterday's Monetary Policy Meeting. I need to start by noting that inflation in Chile is at its highest level in decades. The rising inflation phenomenon is affecting many economies; however, the main causes of this increase vary from one country to another. In Chile, the main factor behind the rise in inflation continues to be the sharp increase in demand during 2021. Available estimates show that about two-thirds of the increase in cumulative inflation since the beginning of 2021 is attributable to domestic factors. This takes into account both the impact of higher demand and the significant depreciation of the peso over the past two years, much of which stems from local factors.

They centre on the ability of the economy and financial system to face shocks because of a good external position, large international reserves, and households’ and businesses’ relatively strong equity position. The banks are strong as well, as I have just explained. Furthermore, economic policy has considerable scope to respond, and more than in many other countries. The Treasury is running a surplus, and public debt is historically low. There is significant scope to lower interest rates if conditions call for it, unlike in many of our trading partner countries, as Iceland's interest rates are well above zero. Honoured guests: In my speech today, I have focused on our experience of the past decade and our current position. Now I would like to address some of the challenges ahead for the Central Bank. The first pertains to how we can preserve stability under conditions of virtually unrestricted movement of capital. The Central Bank of Iceland has been preparing itself for this for years. In 2010 and 2012, the Bank published two reports on monetary policy and on prudential rules post-capital controls. Much of what is proposed there has already been put in place. I have discussed these topics extensively, verbally and in writing, in Iceland and abroad. Some of that material can be found on the Bank’s website. 6  The big picture has been sketched out. Unrestricted movement of capital is of great benefit for a small open economy, but there are also significant risks attached to it.
1 IMF World Economic Outlook, October 2014 2 IMF World Economic Outlook, October 2016 3 Dealogic data 4 “Learning to Live with Less Liquidity”, Morgan Stanley and Oliver Wyman, 13 March 2016 5 “Infrastructure for a seamless Asia”, Asian Development Bank, 2009 6 "The ASEAN Investment Report 2015 Infrastructure Investment and Connectivity”, the ASEAN Secretariat and  UNCTAD, November 2015 7 World Federation of Exchanges 2015 and 2006 data 8 “EY Global IPO Trends”, Ernst & Young, 2006–2015 and “IPO Watch, Asia”, PricewaterhouseCoopers, 2007–  2014 9 World Federation of Exchanges 2015 and 2006 data 10 Dealogic data 11 “ASEAN, PRC and India”, Asian Development Bank, 2014 12 “United Overseas Bank (UOB) publishes the first global Covered Bond Label Harmonised Transparency 6/7  BIS central bankers' speeches  Template”, Covered Bond Label, 19 January 2013 13 “Grow fast or die slow: why unicorns are staying private”, Mckinsey & Company, May 2016 14 IMF World Economic Outlook, October 2016 15 MAS estimates as at 30 September 2016  7/7  BIS central bankers' speeches

Housing cost overburden rate by income quintile  1,500  50  12  1,200  40  9  900  6  600  3  300  15  percent  30 20 10  2-room standard flat price to income  3-room standard flat  average price/sqm (rhs)  Source: imobiliare.ro, NBR, NBR calculations  quintile 1  quintile 2  quintile 4  quintile 5  2016  2015  2014  2013  2012  2011  2010  2009  2008  0  2007  Bucharest  Timișoara  Cluj-Napoca  country  Bucharest  Timișoara  country  0  Cluj-Napoca  0  quintile 3  Note: Share of households where housing costs exceed 40 percent of disposable income. Costs include interest payments or rent, utilities expenses, etc. Source: Eurostat 27  Map of risks to financial stability in Romania Deterioration in investor sentiment in emerging economies Tensions surrounding macroeconomic equilibria Higher household indebtedness through both banks and NBFIs Weak payment discipline in the economy, vulnerabilities in firms' balance sheets Faster increase in property prices severe systemic risk high systemic risk moderate systemic risk low systemic risk Note: The colour shows risk intensity. Arrows indicate the outlook for risk in the period ahead. 28
In any case, it is important to note that this assumption is subject to a high degree of uncertainty, which is reflected in a wider range of trend growth estimates, that goes from half a percentage point to one percentage point between the 2019 estimate and the current one. This partly reflects the fact that these estimates do not include the potential effects in either direction of the structural changes induced by the pandemic or by the political-institutional process underway. Potential GDP —which measures growth capacity over shorter terms, where full resource allocation is not achieved— is revised upward, despite the downward correction to trend growth. For the 2021-2023 period, potential growth is estimated at around 2.1 percent (around 1.7 percent in March). This reflects the greater adaptive capacity of the economy and the smaller scars that the pandemic would be leaving, which reduces the persistence of its negative effects on productivity and factor availability. All in all, in the medium term, potential GDP should converge to figures comparable to trend GDP. For the neutral MPR, the sum of estimates yields figures of the order of 0.5 percent in real terms. Consistent with the range of estimates and the uncertainty surrounding this calculation, the Board considers that the neutral MPR lies in a range between 3.25 and 3.75 percent in nominal terms, a 50 basis point decline in the bounds of the range estimated until March.

3  Reinhart, C. and K. Rogoff, 2009, “This Time Is Different: Eight Centuries of Financial Folly”, Princeton University Press. 4  Gorton, G. and A. Metrick, 2009, “Securitized Banking and the Run on Repo”, NBER Working Paper 15223. 5  Reinhart, C. and K. Rogoff, 2009, “This Time Is Different: Eight Centuries of Financial Folly”, Princeton University Press. 6  Roubini, N. and X. Sala-i-Martin, 1995, “A growth model of inflation, tax evasion, and financial repression”, Journal of Monetary Economics, Vol. 35(2), pp. 275–301  BIS Review 126/2010  5
While inflation has remained elevated and is likely to stay above 2% for some months to come, inflation rates are expected to decline further in the course of 2012 to below 2%. A cross-check with the information from our monetary analysis confirms that the underlying pace of monetary expansion continues to be moderate. After today’s decision, inflation should remain in line with price stability over the policy-relevant horizon. Owing to their unfavourable effects on financing conditions and confidence, the ongoing tensions in financial markets are likely to dampen the pace of economic growth in the euro area in the second half of this year and  2  BIS central bankers’ speeches  beyond. The economic outlook continues to be subject to particularly high uncertainty and intensified downside risks. Some of these risks have been materialising, which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012 very likely. In such an environment, price, cost and wage pressures in the euro area should also moderate; today’s decision takes this into account. Overall, it remains essential for monetary policy to maintain price stability over the medium term, thereby ensuring a firm anchoring of inflation expectations in the euro area in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to make its contribution towards supporting economic growth and job creation in the euro area.

It has been the endeavour of this report to propose a type of central bank which, with proper skill and understanding in its management, will establish monetary conditions in Ceylon that may make possible, as never before, the fuller use of the nation’s human and material resources and a rising standard of comfort for all.” History has judged us before! I will leave it up to you to judge us in future as well! Bibliography Bernanke Ben S. and Michael Woodford (eds), The Inflation Targeting Debate. Cambridge Massachusetts: National Bureau of Economic Research Studies in Business Cycles, 2005. Bernanke, Ben S., Thomas Laubach, Frederic S. Mishkin, and Adam S. Posen (eds), Inflation Targeting. Princeton: Princeton University Press, 2001. Blinder, Alan, Central Banking in Theory and Practice, Cambridge Massachusetts: The MIT Press, 1996. Central Bank of Sri Lanka, 40th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-1990. Colombo: Central Bank of Sri Lanka, 1990. Central Bank of Sri Lanka, 60th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-2010. Colombo: Central Bank of Sri Lanka, 2011. Central Bank of Sri Lanka, Annual Report. Various Years. Central Bank of Sri Lanka, Road Map: Monetary and Financial Sector Policies, Various years. Colombage, Sirimevan, The Political Economy of Central Banking in Sri Lanka. Prof. H. A. de S. Gunasekera Memorial Oration, University of Peradeniya, October 2017. 23  Government of Ceylon, Sessional Paper XIV: Report on the Establishment of a Central Bank for Ceylon (Exter Report). 1949.
Iceland would join the euro area once it fulfils all the convergence criteria. At that point, the Central Bank of Iceland would become part of the Eurosystem, its governor would have a seat at the table of the ECB’s Governing Council, and Iceland’s economy would be considered in taking monetary policy decisions for the enlarged euro area as a whole. Thank you very much for your attention. 6  BIS Review 17/2008

The overall direction and potential of the global sukuk market are certainly well recognised, particularly in its role in contributing towards greater economic development. There is significant potential for the sukuk, in particular to fund infrastructure projects. This is particularly relevant for the GCC, African and Asian regions given the infrastructure needs going forward. This would contribute towards building deeper and more liquid, efficient and effective global sukuk market. The dynamism of the sukuk market also contributes towards strengthening financial stability and in facilitating the expansion of inter-regional investment flows. As we move towards increasing this internationalisation of Islamic finance, and thus towards greater global financial integration, it will contribute towards a global growth process and financial stability that will be mutually reinforcing. BIS central bankers’ speeches  3
In Asia, economic and financial liberalization is a powerful driving force that is reshaping our financial landscape today. This could potentially open up the gap between risk and our ability to manage it. So what should be our strategy to build trust, but avoid being blinded by our sense of security? The strategy to deal with this is to have Trust that is counter balanced by well informed debate on risk management, supervision, and good governance. So, we need a good dose of well-informed skepticism, as well as financially literate public. Let me turn to the progress on the global efforts to reform regulation. Where are we today? In all of these reforms – be they Basel or FSB – the questions we ask are these. Have we done enough to rebuild “Trust” and secure financial soundness? Is the international standard right for the local context? Are there unintended consequences, i.e. the bad side-effects? Getting it right, with the right balance, and right timing is very difficult. This is especially so when the dust has not settled, and the real economy is still vulnerable. Indeed, five years after the crisis erupted in the US, we are still seeing the spread of impact in Europe, and deleveraging of European banks. From Thailand’s own bitter experience of the 1997 crisis, the combined impact of all the economic and financial sector reforms was hard to gauge beforehand.

And certainly, the design of reform package did not anticipate the effect of the contagion spreading to the rest of Asia and our trading partners. The key lesson is that, even in our best effort to get the reform right, we may still fumble. So, how should Asia think about the impact of the global regulatory reform? For Asia, although the banking system has been quite resilient to the crisis, these regulatory reforms carry high stake for us, especially for our future developments. BIS central bankers’ speeches  1  The reforms such as Basel III are, to a large extent, designed to correct major weaknesses in Basel II that allowed the crisis to emerge in western countries. These weaknesses were such as undercapitalization, over-leveraging, inadequate liquidity, and procyclicality of the banking system. So, in so far as Basel III would make these banks safer, it would contribute to stability of the global economy. However, the weaknesses that were targeted by Basel III did not cause damage in Asia. This is mainly because the banking model here tends to be simpler, understandable, and traceable. The western system, on the other hand, is so complex that no one, not even the CEO, could understands the bank’s structure and activities. The value of this simpler model is that bankers know what is going on in their banks. Supervisors can keep very close eyes on their activities.
They can also resort to undrawn amounts on their credit lines with financial institutions, to new borrowing, such as new bank loans and debt issuances, to divestments, or to new capital contributions from their members. This list of sources of liquidity for firms highlights the important role of economic policy measures in alleviating the effects of the crisis on the business sector. At the European level, the powerful monetary policy response from the European Central Bank (ECB) has proved essential for facilitating the financing of all European firms against this backdrop of high uncertainty, heading off financial fragmentation problems like those experienced as a result of the last crisis. Besides the approval of a new, very large asset purchase programme, this response has included the provision of liquidity to financial institutions under very favourable conditions providing they meet certain business lending targets. In Spain, the public guarantee programmes for loans to firms, which are managed by the Official Credit Institute (ICO)2 and have reduced the risk taken on by banks when lending in such uncertain circumstances, have been crucial, as have the measures to allow for more flexibility in temporary layoffs and short-time work arrangements (ERTE by their Spanish abbreviation) and the payment deferrals on certain tax obligations, among other measures. 2  ICO COVID-19 Guarantee Facility, approved through Royal Decree-Law 8/2020 of 17 March 2020.

The ECB in addition publishes a yearly report on banks’ Pillar 3 disclosures, where we also have the option to publicly list those banks which repeatedly fail to disclose their C&E risks. In view of the poor results shown by our stocktake, and to assess the extent to which the banks address individual feedback, C&E risk disclosures will continue to feature prominently in the ECB’s supervision. We will assess banks’ C&E disclosures again at the end of 2022 and we expect to see major progress by then. Conclusion Let me conclude. Stricter disclosure regulation is on the way, and time is running out for banks to get ready. Five years have passed since the Task Force on Climate-related Financial Disclosures published its recommendations. There are also many initiatives, some of them open source, to support banks’ efforts. Many companies have improved their disclosures and now provide information that can feed into banks’ own disclosure indicators. And for those banks that have systematically fallen behind the ECB’s – and the market’s – expectations there is only one way forward. It is time for banks to be transparent and comprehensive with their C&E disclosures, so we that by bringing them to light, we can progress from an inconvenient truth towards a desirable outcome – for us and for all future generations. Let me end where I started: the first step in coming to grips with any inconvenient truth is full disclosure. 4/4  BIS central bankers' speeches
We have digital-driven lifestyles, and so we must strive to preserve shared values that promote societal well-being.” I think we would do well to keep these goals in mind in our efforts to strengthen governance, risk and controls in the era of disruption. On that note, let me welcome you once again to the Conference and wish you productive discussions ahead. Thank you very much. 4/4  BIS central bankers' speeches

Mojmír Hampl: Examining the resilience of emerging markets Speaking points by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the third Annual SSGA-OMFIF Roundtable, London, 10 April 2018. * * * Let me start with a discussion of what it means for an economy to be classified as “emerging”. First of all, it is important to realise that our current taxonomy is to a large extent based on the Marxist tradition of classifying economies according to “stages of development”. Prior to Marx, there was no such taxonomy and really no need for it. Instead, we used to group countries according to different criteria, such as religion, race, or territory. But any discrete classification is arbitrary and artificial, and can sometimes even be confusing. For example, the post-communist countries of Central Europe are typically classified as “developed” by most governmental or international institutions (the IMF, World Bank and EBRD), but as “emerging” by most market institutions (FTSE, MSCI, S&P and J.P. Morgan, among others). What makes the entire issue even more complicated is that having an emerging financial market does not immediately imply being an emerging country, and theoretically vice versa. To put these thoughts into perspective, let me use the classification put forward by J.P. Morgan, according to which both Bangladesh and the Czech Republic rank as emerging economies: in this taxonomy, they are at the same stage of development.
Both eyebrows were raised. This was bad news. In central bank circles at the time, the double eyebrows was career-defining for all of the wrong reasons. Most of my subsequent 25-years has been managing that decline as gracefully as possible. Fifteen year later, I returned to pre-MPC on the other side of the table. There was now no cigarette smoke, but otherwise the format of structured presentations remained the same. Indeed, most of the main MPC processes remain much the same as at inception. That, I would say, is a sign of success. While MPC procedures have evolved for the better, and the standard of presentations I now receive is far-higher than those I used to give, the foundations of the MPC have remained essentially unmoved. It is no coincidence that durability in monetary policy processes has been accompanied by improved macro-economic outcomes. Since 1992, inflation has averaged 2% - exactly in line with target (to one decimal place) and 6 percentage points lower than in the preceding 25 years. The volatility of output has fallen by around half over the same period.6 Contrary to everyone’s expectations, inflation-targeting has lasted and delivered a twin-win, with greater stability on both the nominal and real sides of the economy.7 Given the UK’s previously chequered monetary history, this truly is a transformation. Of course, there is a question about how much of this improved performance reflects good luck rather than good monetary management.

7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  This we are now seeing, with price surges across a widening array of goods, services and asset markets. At present, this is showing itself as pockets of excess demand. But as aggregate excess demand emerges in the second half of the year, I would expect inflation to rise, significantly and persistently. There are already some signs of this risk being priced in financial markets. Longer-term financial market measures of UK inflation expectations have picked up to stand around 30 basis points above levels over the past decade. There is no evidence so far of inflation expectations, in the UK or elsewhere, becoming durably or significantly de-anchored from target – for example, among households or businesses. But it is early days. Overall, inflation expectations and monetary policy credibility feel more fragile at present than at any time since inflation-targeting was introduced in 1992. Why do I say that? By the end of this year, I expect UK inflation to be nearer 4% than 3%. This increases the chances of a high inflation narrative becoming the dominant one, a central expectation rather than a risk. If that happened, inflation expectations at all maturities would shift upwards, not only in financial markets but among households and businesses too.