samchain/econo-pairs-v1 huggingface dataset:
A legal framework for consumer protection as well as possible incentives have already been taken account of through adequate provisions in the revised Banking and Financial Services Act which is under Government consideration for possible legislation in 2014. Guest of Honour We all agree that one of the major barriers to growth of the SME sector in Zambia is the shortage of financing despite its high potential to catalyze growth and employment creation. It therefore makes business sense that the financial sector should start to look at the financing problems for SMEs in a holistic manner which takes into consideration other developmental constraints which may impede sustainable growth and render the financing ineffective. In line with Government’s desire to enhance local content through SMEs and use of locallymanufactured inputs in the Zambian mining industry, a study in the mining sector is being under taken by the Zambia Local Content Initiative (ZMLCI) facilitated by the World Bank and co-financed by DFID. The goal is to build sustainable collaboration between SMEs and the mining industry. It is our hope that the above initiative will be extended to non-mining related SMEs such as those in agribusiness, tourism and retail. Honourable Minister You may wish to note the following topics that will be discussed during this forum: i.  SME Financing and Business Linkages, IFC Experiences in Africa;  ii. SME Financing and Experiences and Lessons Learned – AfDB;  iii. Promoting Business Linkages in Zambia – DFID Zambia; and  iv.

However, for surveillance to be relevant and gain traction, it is equally important that the IMF is sufficiently independent in its conduct of surveillance. To deliver credible messages, the Fund’s technical expertise has to be beyond any suspicion of political manipulation. Surveillance, in other words, has to be an exercise in objectivity. Only then can it also be an exercise in collaboration and contribute to a sounder and more resilient international monetary system. This being said, IMF surveillance and collaboration does not release national policy makers from their responsibilities. Keeping one’s own house in order is a prerequisite for an orderly global village. This is particularly true, though not exclusively, in the domain of fiscal policy. Fiscal responsibility is the paramount challenge of our age. Let me now turn to the second main Fund activity, financial support. The scope and nature of this activity has changed considerably over the past few years. Fund resources have been strongly supplemented, and the Fund’s lending toolkit has been made more flexible. But multilateral financing has not been the only instrument used in tackling the crisis. Regional facilities and central bank swap lines have also played a very important role. All these instruments have acted as complements, and not as substitutes, and together they have prevented a breakdown of the system. Looking into the future, the important question is whether it is necessary to proceed beyond the existing loose network of multilateral, regional and bilateral facilities towards a truly global financial safety net.
This will offset the impetus to consumption and investment provided by the near-zero interest rates. 7. Some academics believe that the effectiveness of the quantitative easing policy in the US is also undermined by the fact that the US property market has not yet bottomed out and US households need to continue to de-leverage. Many policy measures introduced in the US recently aim to reduce the pain of households in a falling property market and slow down the process of foreclosures. Even though property prices have already fallen significantly, more than 50% in some places according to anecdotal reports, potential buyers still prefer to wait as they fear that prices may fall further once the huge stock of foreclosed properties are put back to the market or when interest rates return to more normal levels. In other words, while measures to slow the downward adjustment of the property market are well-intentioned and have their political merits, they could prolong the time needed for the market to reach a new equilibrium or find the so-called clearing price. In my view, this may delay a true recovery of the property market and create a negative drag on the repair of US  2  BIS central bankers’ speeches  households’ balance sheets, making the recovery of consumer confidence farther and farther away. 8. Finally I would like to share with you a few policy lessons learnt from the latest crisis:  (a)  Households, companies and governments alike must avoid excessive leverage or borrowing.

The surge in house price inflation has reached a peak. If the króna remains relatively strong and stable, goods prices are also quite likely to fall. Thus the outlook is for a slowdown in the inflation rate in the coming months, not least because the depreciation of the króna this year has only been passed  BIS Review 82/2005  1  on to the domestic price level to a limited extent. If the housing market cools more quickly than the Central Bank forecasts, house price inflation is likely to slow down even more sharply than is currently expected. Foreseeable exchange rate developments, an ongoing surge in private consumption and greater-than-expected rises in unit labour costs, however, will outweigh these factors in the long run. The Central Bank has repeatedly cautioned against ideas that the inevitable difficulties accompanying a tight monetary policy can be avoided by abandoning the inflation target temporarily, or “letting inflation through”, as it has sometimes been called. This is an unrealistic option. Such a volte-face in Central Bank policy would immediately push up inflation expectations, fuel even higher wage increases and catalyse a depreciation of the króna and more inflation. Ultimately the policy rate would need to be raised by even more to bring inflation back down. Businesses and households would suffer more rather than less from such a policy. Nor should it be forgotten that a large share of household and business debt is either price-indexed or exchange rate-linked.
With a steely nerve and deep pockets, investors could make profits from exploiting these trends. But as Keynes remarked, the market can often remain irrational for longer than even a strong-willed investor can remain solvent. In other words, these are risky bets. The crisis has also revealed, however, examples of bets which were, on the face of it, essentially riskless deviations from EMH or “apparent arbitrage”. Chart 3 considers the price of two on the face of it identical portfolios – an index of CDS contracts and an individually-constructed portfolio of the same CDS contracts. On average, they ought to trade as one and the same. But for around a year from October 2008 onwards, the spreads on these two portfolios differed by as much as 60 basis points. Even once transactions costs are taken into account, there were persistent and significant riskless  10  Shiller (1981). 11  Shiller (2005), Smithers (2009). 12  Alternative metrics for fundamentals, such as cyclically adjusted price-earnings ratios or q, yield a broadly similar conclusion (Shiller (2005), Smithers (2009)). 13  Shiller (2005). BIS Review 28/2010  5  profits on the table. Chart 4 looks at the difference between two, again on the face of it, identical money market bets – forward rate agreement spreads and forward rates implied by the LIBOR spreads, both of the same maturity. Over the exact same period, these differed by as much as 250 basis points. So why were the bets not placed and the arbitrage opportunities exploited?

Inflation developments in Malaysia this year reflect the pass-through of some of these costs, as well as the strengthening of domestic demand. Consequently, although headline inflation is still projected to remain low and stable and range within 2.2% to 3.2% in 2022, core inflation increased to an average of 2.2% in the first six months of 2022 compared to 0.7% in 2021. With the economy now on a firmer growth trajectory and no longer in a state of crisis, Bank Negara Malaysia (BNM) through the MPC in May and July this year judged that it was the right time to begin withdrawing the excess monetary support, raising the OPR from its historical low of 1.75%. What’s important is that by acting pre-emptively, we will be in a position to undertake adjustments to the monetary policy settings in Malaysia in a measured and gradual way to avoid hindering economic recovery. Importantly, this is also to restore conditions that will support sustainable growth over the medium and longer term. To this end, the timing, pace, and extent of rate increases will be guided by assessments of how the evolving economic and financial conditions domestically and globally would affect our inflation and growth outlook. Let me emphasise that monetary policy in Malaysia continues to be accommodative to support a sustainable economic growth in an environment of price stability.
Jörg Asmussen: Stability guardians and crisis managers – central banking in times of crisis and beyond Distinguished lecture by Mr Jörg Asmussen, Member of the Executive Board of the European Central Bank, at the House of Finance, Goethe University, Frankfurt am Main, 11 September 2012. *  *  *  Ladies and Gentlemen, It is a great pleasure to be here today at the Institute for Monetary and Financial Stability and I would like to thank Prof. Siekmann and Prof. Wieland for their invitation. I know that the Institute was founded in November 2007, only three months after the outbreak of what would become the worst financial and economic crisis of the post-war period. Truly timely, I would say. The Institute’s objective to highlight the significance of monetary and financial stability impressively reflects the practise and the challenges of monetary policy over the last five years. Let me in today’s remarks take the opportunity to reflect on the double role of central banks as stability guardians and crisis managers. Had I been here before August 2007, this title would have mainly implied discussing the central banks’ role as guardian of price stability. But there cannot be stability without adequately managing the crisis. So, why have central banks assumed such an important role in crisis management? Well, responding to the sudden financial tensions, central banks crisis measures have contributed to calming and avoiding highly detrimental feedback loops between financial markets and the real economy.

Neither the Riksbank nor any other analyst perceived the monetary policy conducted to be leaning against the wind to any large extent, and the general impression was definitely not that the repo rate should have been left at the level to which it was cut during the financial crisis, that is, 0.25 per cent. 4  In the minutes, Lars Svensson presents estimates where the dotted yellow repo-rate path is assumed to give an inflation rate of 2 per cent from the beginning of 2013 and onwards and an unemployment rate that would reach what he assumed to be an equilibrium level of 5.5 per cent at the beginning of 2014. It may also be worth noting that at the ensuing meeting, in September 2011, all of the Executive Board members thought that 2 per cent was a suitable level for the repo rate, given the economic situation in Sweden. 5  National Institute of Economic Research (2011). 6  OECD (2011), pp. 191–192. 7  IMF (2011), p. 25 and Table 9. BIS central bankers’ speeches  3  A strange assumption Given this, it is very strange to claim that an evaluation of the Riksbank’s policy should rely on the assumption that the alternative of not leaning against the wind would be to hold the repo rate at 0.25 until today. If no one perceived it as such at the time, it appears very strange to paint this picture retrospectively.
To the extent that it is generated by an expansion in the fiscal deficit, growth is potentially reversible as fiscal deficits and growing public debt cannot be sustained indefinitely. The deficit averaged 4.5% of GDP in the first half of the 1990s, but surged to 8.4% of GDP in the second. Substantial progress to consolidate public finances has recently been made and the deficit has dropped to around 6% from a peak of 11% in 1998. While this fiscal restraint may curb demand growth in the short run, it is restoring the long-run viability of the economy that would be threatened by a growing public debt. Suffice it to say that the cost of servicing this debt has reached levels comparable to expenditures on health and education. In this context the planned use of privatization proceeds to reduce the public debt is commendable. By stimulating aggregate demand, budget deficits also encourage consumption at the expense of saving, thereby leaving fewer resources to finance investment, the only lasting source of long-term growth. Expenditure on foreign goods and services would rise, leading to a deficit on the current account of the balance of payments. The current account deficit averaged 2% of GDP in the first half of the 1990s, worsening to 8% of GDP in the second. Protracted deficits on the external current account are clearly not sustainable in view of their impact on the external reserves and the extent of foreign borrowing. In the long run, this could necessitate drastic reductions in consumption levels or curtailed investment.

Gross fixed investment as a per cent of GDP 30  30  25  25  Gross fixed investment  20  20  15  15  Grossfixed investment, excl residential 10  10  5  5  Källa: SCB 0  0 1950  1955  1960  1965  1970  1975  1980  1985  1990  1995  Savings, Investments (net) and Current account as a per cent of National Disposable Income 1950-96 20  15  10  5  0  -5 1950 D :\ex\d-sv\data\datany  55  1960  65  Nettosparande  (Net savings)  1970  75  N ettoinvesteringar  (Net investment)  1980  BIS Review 20/2000  6  1990  (Current account)  Source: National accounts. Note: From 1986 reinvested capital gains is included. Source: Lennart Berg  85  Bytesbalans  95  Labour productivity growth 5 SWEDEN 4,5 4 3,5  USA USA  3 2,5 SWEDEN  2 USA  1,5  SWEDEN  1 0,5 0 60-74  75-94  7  95-99  BIS Review 20/2000
To prevent the risk that central banks react too late to such imbalances, the monetary policy strategy has to enlarge its informational basis: monetary indicators, including money but also credit developments, may then be a good candidate to detect inflationary pressures early on. 2  BIS Review 15/2008  However, the theoretically founded long-term relationship between money and inflation may be blurred in econometric estimates of long run money demand equations, and part of this could be due to financial innovation. Indeed, as far as the euro area is concerned, recent Banque de France research has pointed to a structural break around 2001 in the income velocity of money. In the euro area, the velocity of money seems to have now established along a new, faster declining trend. This is consistent with the hypothesis of a financial deepening in the economy, in particular an increase in financial wealth held by households. Although the precise role of financial innovation in this process is still not fully understood, we should think of it in terms of both new players and new products: -  In terms of new players, a plausible explanation is the rapid pace of expansion in the business of the so-called other financial institutions (OFIs). These institutions include mutual funds as well as financial vehicles that buy and repackage loans that are securitised by banks. This activity reduces mechanically the growth of MFI loans to the private sector, while it is mirrored in the strong increase in OFIs’ deposits holdings, hence contributing to M3 growth.

To sum up, financial innovation is on the whole expected to have facilitated the job of monetary policymakers by accelerating the transmission of monetary impulses to the economy. However, in times of stress, when financial sophistication may have gone further and quicker than risk-management practice, the confidence crunch that may ensue paves the way to non-linear responses of the economy that seriously challenge our common understanding of how monetary policy impulses are transmitted to the economy. Challenges for our reliance on monetary indicators As you know, the Eurosystem’s monetary policy strategy assigns an important role to money, which is based on the premise that monetary developments provide valuable information on future inflation in the longer run. I would like to ground this with two reasons, a well-known stylised fact and a conjecture. The stylised fact first: there is ample statistical evidence, in the euro area and elsewhere, that low frequency movements in money growth are closely correlated with trend inflation, e.g. for frequencies corresponding to cycles of eight to ten years. The conjecture, then, brings us to an issue that will be tackled this afternoon, namely the flattening of the Phillips curve: changing inflation dynamics, which can partly be viewed as a consequence of a successful anchoring by credible monetary policies, tend to reduce the sensitivity of inflation to incipient imbalances in the economy.
2  BIS central bankers’ speeches  The key to successful reform will be to identify the leverage points that exist and do our best to ensure regulators are up to the task in those areas while not burdening other aspects of the financial system with heavy intervention that might trigger the law of unintended consequences. Eye on target Let us be clear about the goals of reform. With so much energy being expended on the what, the when and the how of implementing Dodd–Frank, the first risk we run is forgetting the why—the reasons for the act, its primary goals. For this, we need only turn to the law itself, the preamble, which spells out the key objectives as follows: “To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail,” to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices and for other purposes.”7 On the subject of too big to fail, the legislation is quite blunt.

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However, in this respect I wish to refer to two aspects from a purely technical standpoint. The first is that, as I have mentioned, in a scenario of already low price dynamics, the risks to inflation forecasts in the short and medium-term are clearly on the downside. In recent months, the headline inflation rate in Spain has been broadly negative (-0.9% in October according to the leading indicator of the CPI published by the INE last week), while core inflation, which is less volatile, has also consistently surprised on the downside and remains at levels close to 0%. In this setting, as it has been the case in 2020 with pensions and public sector wages indexed at 0.9%, which will be above observed inflation (-0.3%, on Banco de España projections), the proposals to raise public sector wages and pensions envisaged in the Draft Budget could give rise to an increase in real terms in compensation for those groups, at the same time as the economy overall is witnessing large-scale destruction of employment and public finances a highly acute deterioration, unprecedented in recent times. That said, in my opinion, rather than adopting widespread wage increases for public sector workers, it would be more appropriate to assess the possibility of introducing more specific increases within that group, for example, for health sector workers, based on objective criteria.

In the case of 2021, the expansionary stance would be mainly due to the impact on growth of the NGEU programme.6 Therefore, should any of the risks mentioned in relation to the impact of this programme materialise, the expansionary stance of fiscal policy could ultimately be smaller in 2021. 2.4  Government debt in the Draft Budget  According to the Draft Budget, the general government debt-to-GDP ratio will reach a historic high of 118.8% of GDP in 2020 and will edge down to 117.4% in 2021. This fall would be exclusively a consequence of the strong nominal GDP growth forecast in 2021, since both the budget deficit and the stock-flow adjustments would exert upward pressure on the government debt ratio.7  Nonetheless, taking into account the risks I have already mentioned, to GDP growth (on the downside) and to the level of the budget deficit (on the upside) in 2021, the government debt ratio may behave less favourably than projected in the Draft Budget. 6  Although this programme will have a neutral effect on the general government balance, by partly closing the negative output gap forecast for that year, it will increase the cyclical component of the balance – calculated as the product of the output gap and its elasticity to the cycle (0.6, according to the OECD) – and the structural deficit.
As I mentioned earlier, we are seeing currently a much greater dispersion of wage settlements. What if this is the beginning of a more far-reaching structural change in the economy which alters relative pay across occupations? To be clear, I am making no prediction here, but rather asking the question in the context of monetary policy. The first thing to say is that such changes do happen. Since the 1980s, we have seen a structural increase in the pay gap between higher and lower earners. We have also seen more structural changes in retirement ages over a longer time. So, structural changes can happen. It is not the job of monetary policy to prevent such changes, but rather to ensure that they do not have negative consequences for monetary stability, such as dislodging inflation expectations. On this point, it is worth remembering that an important reason why we have a positive rather than zero inflation target is to enable such changes in relative earnings to happen in a world of downward nominal wage rigidities. I started by quoting Friedman and Schwartz, and so I will end by doing the same. They emphasised the need to distinguish a change in price (or wage) levels from a persistent increase in the rate of change[3]. In my view, drawing this distinction is a crucial issue that we will be dealing with for some time. And of course, since it involves predictions of the future, for policymakers the task will not be easy.

And, it follows, that in such a situation they should do just that, they should not hold back. But we are left with a puzzle in the labour market. Data from HMRC suggest that there were around 1.7mn jobs covered by the furlough scheme in July, and as a reminder it comes to an end later this week. The number of advertised job vacancies was at a record level in August of over 1mn. The number of people unemployed in the three months to July was 186,000 higher than immediately pre-Covid, and the number of inactive people was 634,000 higher. Now, of course, it is possible to reconcile these numbers, but to do so involves a lot of movement of people from furlough, unemployment and inactivity, in ways not so far seen. There are a number of possible outcomes to this puzzle, which have different implications for the labour market. The first is that the furloughed workers will largely be re-absorbed into their old jobs, and so even with a further reduction in unemployment and inactivity, we are left with an excess of job vacancies. If these excess vacancies are associated with shortages of workers in particular sectors, this may push up on wages. This could also happen if furloughed workers do not return to their old jobs, but are not suitable for those jobs and sectors where there are a high number of vacancies. In other words, there is a mismatch in the labour market.