samchain/econo-pairs-v1 huggingface dataset:
On the other hand, this episode is slightly different, because the imported inflation is concentrated overwhelmingly in goods prices, which tend to react faster. Quite a bit of the current rise in inflation is actually coming directly from the higher price of oil, something that is likely to fall away through the early part of 2022. (It’s worth leafing back to Chart 7 to get an idea of the timing and scale of the effect.) And, as we’ve seen, periods of rapid price rises in other traded goods haven’t just been temporary – they’ve often been followed by below-average rates of inflation. So, while we know it’s going to go further over the next few months, I’m not convinced that the current inflation in retail goods prices should in and of itself mean higher inflation 18-24 months ahead, the horizon more relevant for monetary policy. Of more relevance, I think, is what’s happening in the domestic economy. As ever, and despite my concentration today on all the texture under the macro-economic surface, the outlook for aggregate demand growth still matters. And for all the usual reasons and more, the Committee will have to pay very close attention, parsing the official data as best it can, to the numbers in the labour market. Thank you. 21  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  21

M R Pridiyathorn Devakula: FSAP from the Thai banking perspective Statement by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the United Nations Conference Center, Bangkok, 15 October 2004. *  *  *  Distinguished guests and participants, Ladies and Gentlemen, Good morning. It is a great pleasure for me to open this important workshop and give a keynote speech. The objective of today’s event is to introduce the joint IMF-World Bank initiative called the Financial Sector Assessment Programme, otherwise known as FSAP, so that at the end of today we will all have a common and thorough understanding of what FSAP is about, how much work it would require of whom, and what benefits there would be for Thailand to participate in. This is a tall order to be achieved in one short day, but I am sure we can do it because we are fortunate enough to have with us two senior and highly experienced staff from the IMF: Mr Stefan Ingves and Mr. Udaibir Saran Das. On behalf of the Bank of Thailand and all the participants, I would like to thank both of you very much for making the time to be here despite your busy schedule. We are indeed grateful for your assistance. By way of introduction, let me very briefly give you an overview of the FSAP and how it might complement and enhance our ongoing efforts to improve corporate governance and promote safety and soundness of the financial system in Thailand.
Threats to financial stability in the current environment Having described the potential costs of financial crisis and why financial stability matters, I want to turn to my second question, why it matters now. By this I do not mean that we have detected any unusually marked amount of stress or weakness in the financial system. Indeed, I cannot resist at this point expressing some thankfulness that we are managing to hold this discussion in relatively calm times (although this is the sort of comment that might be better saved for the closing address at a conference rather than the opening one). The last international conference the Bank sponsored on a financial stability topic, back in September 1998, followed closely on considerable turbulence in global bond markets and in fact managed to coincide with the incipient collapse of LTCM. As we found out shortly afterwards, we were lucky to have any American colleagues at all at that event! Rather, I mean that the financial system, and in particular the banking system, is undergoing substantial change, both in its external environment and in the way it manages its risks and is regulated. Globalisation, consolidation, conglomeration within and across sectors, technological change: these are not new developments, but they are continuing and intensifying. These developments present new opportunities to banks, as financial markets open up and mature. But they also present challenges.

The establishment in recent years of regulators like the FSA with responsibility in a single body for bank and insurance supervision will help to achieve progress in this area; indeed the convergence of risks being taken by financial institutions of different origins is a central plank underlying the need, certainly in the UK, for an organisation like the FSA. Conclusion I feel aware that throughout this address I seem to have repeatedly stressed the importance of advancing our analysis of systemic risk and at the same time the huge complexities involved in this task. Having highlighted the difficulties, it is now conveniently time to hand over the podium to those who may have some of the answers! I'd like to end by referring back to my statement of our objective for this conference, namely to achieve an advance in our understanding of systemic risk. This is of course not our only objective: we also hope that you manage to enjoy the opportunity of meeting with so many colleagues from around the world, enjoy the Bank's hospitality, and for those of you from overseas to enjoy your visit to London. Thank-you. BIS Review 43/2001  5
This compares with a 1.5 percent year-over-year rate for the PCE deflator and 1.4 percent rate for the core PCE deflator, which excludes food and energy prices. Low and falling inflation is a problem for several reasons. First, low and declining inflation makes it harder to accomplish needed balance sheet adjustments. That is because, all other things being equal, lower inflation means slower nominal income growth. Slower nominal income growth, in turn, means that less of the needed adjustment in household debt-toincome ratios will come from rising incomes. This puts more of the adjustment burden on paying down debt. 1  Chairman Ben S. Bernanke, Addendum: Addressing the Financing Needs of Small Businesses, Monetary Policy Report to Congress, July 21, 2010. 4  BIS Review 127/2010  Second, and even more importantly, low and falling inflation can cause inflation expectations to decline. This is important because inflation expectations are an important factor that influences actual future inflation. Moreover, when inflation expectations decline, the expected real cost of credit increases – a subject I will return to in a moment. So what could the Federal Reserve do? As I see it, there are two potentially complementary avenues. First, we could take steps to make our current highly accommodative stance of monetary policy more effective in stimulating economic activity by providing additional guidance about what we are trying to achieve today and in the future. Second, we could find ways to increase the amount of stimulus we currently provide via our balance sheet.

In all options, the Bank of Cyprus will need to create an organisation to manage nonperforming loans. The bank is already moving in this direction, and should it remain as a single entity it is likely that there will still be a dedicated focus on managing the workout of troubled loans. Splitting the Bank of Cyprus into a commercial bank and an asset management/development bank would create a legal and management separation. This – as any other option – has a number of merits and challenges. Two institutions would provide specialisation. The asset management/Development Bank could focus on maximising value through the restructuring of the loan book with no immediate time pressures. It could also act as a specialist bank focussed on real estate and development related activities. The remaining commercial bank could focus on serving the domestic economy. However, a split could be operationally disruptive in the immediate term, even if it was beneficial over time. Substantial progress in the restructuring of the banking system has been made. This has not been easy, and market conditions remain fragile. In determining the way forward any solution should look to meet four objectives; Restoration of Confidence – It is essential that any solution furthers the restoration of confidence. Customers must have confidence in the future of the Bank of Cyprus whether it is one bank or two. As confidence is re-established we can further ease and ultimately lift capital controls. Funded Balance Sheet – The Bank of Cyprus’s reliance on emergency support is well known.
For the individual Member State, this is an opportunity to attract financial service providers from third countries who want to take advantage of the opportunity to establish themselves and market their products anywhere in the EU. Second, the single passport will also reduce the cost of doing business. It is in fact estimated that the Action Plan would reduce the cost of capital for 18 million businesses in the EU and drive down the cost of financial services for consumers. Conclusion Against this background it is not surprising that studies on the effects of enlargement show that growth rates would be higher under EU membership than under any other scenario. A European Commission study shows, for example, that during the first five years following accession, growth rates in the acceding countries would be between 1.7% and 3.2% above those that would be achieved if these 25 countries were to proceed with current reforms without joining the EU. A comparable finding also emerges for Malta: the annual growth rate would be between 1.7% and 1.9% higher in the short-run than it would be under the non-membership scenario. The difference would be even larger in subsequent years – Malta’s growth rates could then be between 4.4% and 6.1% higher under EU membership. Such findings and related considerations have led governments, political parties, trade unions and academics from twelve European countries, large and small, islands and continental ones, to conclude that membership of the EU is on balance the best available response to the challenges posed by globalization.

On the other side of the Atlantic, one of those drawing breath was the then-Governor of the Bank of Canada, Mark Carney. I am not sure what Mark went on to do next. But it was not just internationally where the regulatory reform bandwagon was rolling. In the UK, the Vickers Commission reforms created a fire-break between banks’ services to the domestic economy and their other activities. Complexity scientists would have approved. And sweeping institutional reforms were also underway in the UK, with the FSA’s prudential responsibilities merged into the Bank and a new consumer protection agency, the Financial Conduct Authority (FCA), created. The return of prudential regulation to the Bank was not, fortunately, a reversion to the pre-1997 orthodoxy. The Global Financial Crisis had laid bare the costs of separating finance and the economy, the micro and macro – a separation that had also been a feature of the Bank in the past. Crisis needed to be the catalyst for change, forging a link between the Bank’s analytical brain and its regulatory hands. And so it was, with the creation of a new policy body, the Financial Policy Committee (FPC). The FPC was charged with safeguarding systemic risk in the UK using new macro-prudential tools. An interim FPC was set up in 2011 ahead of a new statutory framework being put in place. And the interim FPC gave way to a statutory FPC in 2013 when the new Financial Services Act came into place.
The sustained high deficits of rupee liquidity in the domestic money market compelled the Central Bank to reduce the Statutory Reserve Ratio (SRR) applicable on all rupee deposits of commercial banks in November 2018, while increasing policy interest rates to neutralise the impact on interest rates due to the permanent liquidity injection arising from the reduction in SRR. We followed this cautious approach with the broad aim of stabilising inflation at 5  mid single digit levels and anchoring inflation expectations to enable the economy to reach its potential in the medium term. In the external sector, the growth in export earnings was outpaced by the expansion in import expenditure, although earnings from tourism, workers’ remittances, foreign direct investment (FDI) and debt related inflows to the government helped cushion the balance of payments (BOP) to some extent. The BOP experienced significant pressure on account of foreign exchange outflows caused by tightening global financial conditions and the strengthening of US dollar in view of monetary policy normalisation, particularly in the United States, as well as the widened trade deficit. Similar to the pressure that was observed in other emerging market economies, these developments resulted in a sharp depreciation of the Sri Lankan rupee particularly during the second half of the year. The Central Bank intervened in the domestic foreign exchange market at times to prevent disorderly adjustments in the exchange rate, while allowing demand and supply forces of the forex market to determine its level and direction.

Such NCCTs will be subject to sanctions if they do not come into line. Moreover, banks from NCCTs are caught under the newly enacted US Patriot Act. Such banks, and any others regarded as higher risk from a money laundering perspective, will be subject to increased scrutiny by their US correspondent banks and the US authorities. At worst, higher risk foreign banks could eventually find themselves shut out of the US payments system. Hong Kong has a good reputation internationally as a financial centre that takes seriously the need to combat money laundering. I am sure that you will agree that we all have a vested interest in keeping it that way - which means that we need to keep in line with international standards as they evolve. The role of the HKMA The role of the HKMA in this is to work with the other relevant authorities in Hong Kong - the Commissioner for Narcotics, the law enforcers and other regulators - to ensure that we have an effective framework to deter, detect and report cases of money laundering. Our particular responsibility relates to AIs. It is our job to verify that AIs have adequate policies, procedures and controls in place to enable them to: •  identify suspicious customers and transactions;  •  report suspicious transactions to the Joint Financial Intelligence Unit (“JFIU”); and  •  assist the law enforcement authorities through providing an audit trail.
At that time, the long “fiscal dominance” history of the Turkish economy that severely restricted the efficiency of monetary policy and shallow financial markets that were not well developed were the primary characteristics of the Turkish economy. All these limited the economy’s room for maneuver on the eve of the adoption of the new monetary policy regime. Independence of the Central Bank of Turkey that came in 2001, was almost the only institutional factor in hand at that time on the way towards the ultimate objective of price stability. Given this overall framework and conditions, the Central Bank of Turkey preferred a smooth transition towards inflation targeting whereby it would wait until all these factors that restrict the efficiency of monetary policy would weaken. In early 2002 following the achievement of relative stability in financial markets after the 2001 Crisis, the Bank announced its new monetary policy regime in a public statement as implicit inflation targeting. As it was emphasized in the same now historical statement, the final aim was to adopt the full-fledged inflation targeting regime, once the preconditions were met. This ‘new’ regime was defined as inflation targeting since the central bank announced a numeric target for annual inflation jointly set by the government according to its law and price stability was now its primary objective. Furthermore, it was similar to inflation targeting in the sense that the decision making process was shaped in a forward looking manner by exploiting the broadest set of information available.

Süreyya Serdengeçti: Inflation targeting – performance and challenges Opening speech by Mr Süreyya Serdengeçti, Governor of the Central Bank of the Republic of Turkey, at the Conference on Inflation Targeting: Performance and Challenges, Istanbul, 19 January 2006. *  *  *  Ladies and gentlemen, I would like to welcome you all. It is a great honor for me to open this conference entitled “Inflation Targeting: Performance and Challenges”. I am very pleased to host such distinguished guests and I’d like to thank you all for joining us here in Istanbul and share your knowledge and experience on inflation targeting. The inflation targeting regime has been adopted by a growing number of countries, especially by emerging market countries, in the last fifteen years. As economic and political conditions of emerging market countries have generally been considered as vulnerable and unstable, these countries perceive inflation targeting as a credible and a safe “way out”, after the successful experiences of industrialized countries. Turkey is now the newest member of the club. We have studied the experiences of more than 20 industrialized and emerging market countries as we were working on the general framework of the inflation targeting regime for Turkey. Along with these experiences, historical, socio-political and economic dynamics of the Turkish economy have been taken into account to create a model that is specific to Turkey. I believe that those countries who will adopt this regime in the future will benefit from our experience as we did from others.
I will begin by explaining the issue of systemic risk in a little more detail, taking the recent crisis as my example, and making it clear why regulatory interventions in the financial system are necessary. On the basis of these explanations, I will then present the key criteria, which, in my opinion, should be used as guidelines when designing regulatory measures. In other words, I will be sketching the core components of a kind of roadmap for containing systemic risk. However, since we can never rule out the emergence of a new crisis, we also require a well-placed safety net. This will help to secure an adequate supply of liquidity to banks and markets, even at times of increased stress. A final section will be dedicated to this area, with some remarks on the importance of the central banks’ function as lender of last resort. Systemic risk and the financial crisis Normally a number of different factors are simultaneously responsible for the accumulation of systemic risk over time leading to a crisis – as happened in the recent crisis. A number of well-known examples of possible risk factors and undesirable developments in the financial system include irrational market developments (e.g. bubbles during the upswing or fire sales during the downswing), inadequate or inappropriate regulation (e.g. weak points in Basel II), excessive confidence in markets and models (e.g. VaR), false incentive systems (such as implicit state guarantees for systemically important banks), and complex and intransparent products (e.g. complex securitised loans).

The first important criterion is whether the measures that are taken can reduce the social costs that can arise as a result of systemic risk. Ultimately, what is needed is an internalisation of the negative externalities, so that market discipline and market order are restored. The TBTF issue, in particular, is an illustration of the fact that the market’s power to impose sanctions is not fully functioning at present, since systemically important banks  1  For instance, information contagion, interdependences (interbank market) non-substitutability of systemically important functions, etc. 2  BIS Review 146/2010  cannot currently fail. On the contrary, they benefit from a government rescue guarantee for the very reason that, because of their systemic importance, their failure costs would be so high. Thus, at present, TBTF financial institutions are not obliged to bear the full extent of the risk they assume. In the event of problems they can pass on the risk to the general public. This is a fundamental contradiction to the basic principles of a properly functioning market economy. In order to contain these market imperfections the guiding principle should be – do what is necessary, but no more than is necessary! Consequently, the measures to be taken need to contribute to stability without obstructing key welfare-enhancing functions of the financial system.
Worldwide, policymakers and markets have anticipated that the US sluggish recovery could face further downside risks as US fiscal and monetary policies could run out of “bullets” to provide the much needed stimulus. For the Eurozone, doubts on the potential contagion of sovereign debt crisis to other European countries remain, reflecting the ineffective impact of domestic policy on the economic recovery in these economies. Looking ahead, a more positive sentiment on the Eurozone is contingent on the growth performance of Germany and France in particular. But, recent signs of economic weakness in external and domestic demand in these countries have been somewhat worrisome, and new data release could either calm or jerk market sentiments. Despite these rather gloomy prospects in advanced economies, I remain cautiously optimistic on the performance of Asian economies for the rest of this year. My assessment is conditional on the ability of Asian economies to maintain economic resilience and pursue an appropriate policy mix to preserve economic and financial stability. Evidenced since the 2009 US crisis, major economies in Asia have been able to cushion the adverse impact of global economic roller coaster by expanding domestic demand, supported by expansionary fiscal policy and monetary accommodation. Once world trade has resumed growth after the initial contraction in the aftermath of 2008 US crisis, Asian exports have continued to grow robustly on the back of regional trade expansion and strong growth in Asia, particularly China and India.

Without further delay, may I officially open the Fitch Ratings (Thailand)’s 2011 10th Anniversary Annual Conference and wish everyone a fruitful deliberation. Thank you for your attention. BIS central bankers’ speeches  3