samchain/econo-pairs-v1 huggingface dataset:
Thus, annual CPI variation went from its 9.9 percent peak of October 2008 to 4.5 percent in April. Most measures of inflation expectations show a decline in recent months, particularly for the short term (Figure 9). The baseline scenario of this Report assumes that year-on-year inflation will continue on a downward path in the coming months with large swings between the end of this year and the  4  BIS Review 65/2009  beginning of 2010. This, because of the changes in the basis of comparison that include high figures from May through October 2008 and negative ones that accumulated from last November to February (Figure 10). Therefore, in the baseline scenario, annual CPI inflation will be negative from the end of the third quarter to the beginning of the fourth, to close the year 2009 at 0.6 percent. Then it should pick up gradually, to reach 3 percent at the end of the policy horizon, this time the second quarter of 2011. The rate of annual variation of core indicators has also dropped, a trend that will prevail until the first half of 2010, when they will start growing steadily to also hit 3 percent by the end of the policy horizon (Table 3). The path projected for inflation rests on a number of assumptions. On one hand, import costs will not be a source of additional inflationary pressures. Commodity prices will post small increases in the next two years, in line with the slow recovery foreseen for the world economy.

As usual, the baseline scenario described above reflects the events that are believed to be most likely to occur with the information available at the closing of this Report. Logically, different events will lead to different macroeconomic conditions and, therefore, an MPR path that will also differ. Currently, the level of uncertainty is definitely higher than normal and, after assessing the probability of alternative scenarios, the Board considers that the balance  BIS Review 65/2009  5  of risks for growth is biased downward, and is unbiased for inflation. The main risks are associated, once again, to the complex global economic outlook. In the past few weeks, some signs of stabilization of the crisis in developed economies have begun to show up, with a marginal recovery of manufacturing output, exports and confidence indicators in different economies, particularly in Asia. It is possible that these signs may be just another stage in the volatility shown by the markets in the past several quarters, and new stressful situations may arise that could worsen the already precarious situation of the world economy. Meanwhile, if the rebound of stock markets and the reduced risk aversion are solid indications that uncertainty is fading out, a more widespread recovery of global output and demand may be seen in the short run at the global level. The materialization of some of these risks could have important implications on the domestic economy, mainly consumers and entrepreneurs’ expectations possibly taking longer than predicted to improve, or the economy quickly recovering from its current state.
So much then, Mr Chairman, for the past, let me turn now to the challenges and prospects for the future. The most immediate challenge is to get through to the next millennium without significant mishap - to demonstrate that we have indeed succeeded in overcoming the Y2K bug. In fact I have no misgivings on that score as far as the City is concerned. The preparation has been immensely thorough. The Bank, with our colleagues in the FSA, and with our counterparts abroad, has worked with the financial markets, both on that technical preparation and to ensure that the necessary liquidity will be in place. That in turn has provided a degree of reassurance - to financial intermediaries and to the public more broadly - that should help to avoid undue precautionary behaviour which might otherwise prove disruptive. A second challenge is the advent of the euro - and on this score, too, I have very few misgivings. Even before the introduction of the new currency the City played a very positive role in its technical preparation - and one which has been widely acknowledged. And since that introduction the City has continued to play a very active part in the development of the broader, more liquid, financial markets which the euro has made possible, and which are vital to its success as a widely-used international trading and investment currency. This activity is in fact the greatest contribution that the UK can make to that success from the outside.

Of course the City is in competition with other financial centres elsewhere in Europe. But as I have often pointed out before, at the macro-economic level such competition is a positive-, not a zero-sum game from which we collectively, borrowers and lenders and market intermediaries, all stand to gain. I have every confidence in the ability of the City to thrive in this competitive environment - but it will thrive not at the expense of the rest of Europe but alongside other European financial centres. And in that context suggestions that we should be somehow artificially disadvantaged are irrational. The third challenge confronting the City - and a much more fundamental one - is the accelerating advance of information and communications technology which is currently sweeping across the whole of the global economy. In the financial services sector in particular it is the major driver of change and innovation. It makes possible the introduction of a whole raft of essentially new financial services and products, and it is radically changing the way in which they and existing services and products are delivered, whether in wholesale or retail financial markets, at a fraction of the existing cost. In wholesale markets it will affect the whole spectrum of activity - from trading through payments and settlements, across the whole range of financial instruments, across national boundaries - not simply within Europe although that is an immediate focus of attention - and it has the potential to alter fundamentally the relationships between end-users of the markets, intermediaries and exchanges.
The credibility of the inflation target must be preserved The Riksbank has been criticised for explicitly using the policy rate for a short period after the global financial crisis to try to counteract the build-up of financial imbalances.32 For a few years after the outbreak of the global financial crisis, the Riksbank and other forecasters were able to observe that inflation had not risen in the way they had expected; from 2010 until the middle of 2014 inflation had been steadily below target. Long-term inflation expectations had also started to fall and there was a risk that the role of the inflation target as a benchmark for price and wage formation would be weakened. In other words, the credibility of the inflation target was being lost. Critics of the Riksbank's monetary policy said that this was because monetary policy had "leaned against the wind". More recently, the criticism has tended to be the opposite and focused on the Riksbank's expansionary policy in the years after this, when inflation was below the target. The Riksbank has then been criticised for monetary policy having focused too much on inflation, being too expansionary and leading to the build-up of imbalances. When the Riksbank takes financial stability into account in its monetary policy decisions, this can mean that the target horizon is shifted, and then it is not surprising that both inflation and inflation expectations can be affected. This need not be a problem as long as it applies for a shorter period of time.

Even if it were possible, going back to the ECU would present major disadvantages compared to today’s euro: until the euro was introduced, France did not actually participate in decisions on interest rate levels and had to follow German monetary policy; the franc was at the mercy of speculative attacks from the financial markets that drained our currency reserves as we saw in the 1992-1993 period. The euro was introduced to solve these problems. Today, the euro is alive and well. It is the currency of 340 million Europeans, is recognised worldwide and is trusted by the people of France. Almost 70% of French citizens are in favour of the euro because it protects their purchasing power, with prices that increase three times less rapidly than previously; because it makes borrowing easier, with interest rates that are 1.5% to 3% lower; and because it safeguards the value of their savings. Finally, I would like to add that the Eurosystem has not modified its sovereign debt purchase programme in relation to France’s presidential elections. The distribution of monthly purchases between the various countries is based on the ECB’s capital allocation principle. 1/1  BIS central bankers' speeches
First, it will be centred around the European System of Financial Supervisors. The establishment of this System will permit better coordination among national authorities responsible for financial regulation. If one lesson can be learnt from the crisis, it is that the reach of financial supervision and regulation needs to be extended to better monitor those financial institutions, including highly leveraged, which can arbitrage across national borders and across oversight jurisdictions. The European Systemic Risk Board (ESRB) will be the other dimension of the European approach to financial reform. This new body will provide early-warnings and issue recommendations that will help to prevent a renewed build-up of excessive risk in the financial system as a whole. The crisis has displayed the phase transition that risk can undergo almost overnight: a mutation from localised liquidity risk to a generalised solvency threat attacking the whole system of financial interconnections. The ESRB will have to oversee the likelihood and measure the severity of these reactions and instant transmissions. The ECB and the National Central Banks in the EU will fully contribute to this new institutional framework. Global governance The underlying approach to reforms should be holistic. The global proportions of the crisis call for a rethinking of the links between financial behaviour and macroeconomic policies, as they interact in a global scene. 4  BIS Review 150/2009  The G 20 has made a quantum leap in creating the new premier global economic group.

As trustees of wealth bestowed upon us by Allah, we are entrusted to ensure that waqf meets its intended objectives. If properly developed, managed and utilised, we can harness its potential as a highly effective platform for sustainable economic growth, one that creates sustainable and perpetual benefits for all, especially our future generation. It is time to put strategies and plans into action. 4/4  BIS central bankers' speeches
For another, the sharp increase in loan volumes – especially for mortgages – against a backdrop of persistent economic uncertainty and the substantial rise in real estate prices points to higher credit risk. In addition, for first mortgages on residential properties, banks are required to have less capital backing under Basel II than they did under Basel I – before 2007 (i.e. under Basel I), a mortgage had to be backed with 4.0% capital; since then (i.e. under Basel II), that figure is only 2.8%. This not only gives banks an incentive to grant more mortgages, but also enables them to reduce the capital buffer used to absorb loan losses. In view of the increased interest rate and credit risk, we urge the domestically focused banks to be prudent. They must be prepared for interest rates to rise. Besides the direct effect on the interest rate margin, particular attention also needs to be given to the indirect effect of an interest rate increase, namely that if loans are granted without sufficient attention being paid to borrowers’ financial situations, a rise in the interest rate will inevitably result in higher loan losses. As I have mentioned, the domestically focused banks are well capitalised by historical standards. But in view of the risks and uncertainty, they will also need to maintain a large capital buffer.

Thus indirect risks pose a serious threat to Swiss banks, even if direct risks – measured by the direct claims on those countries particularly affected until now – are moderate. In this climate, it seems inappropriate to us that banks increase their appetite for risk. Reforming the regulatory framework / “too big to fail” A year ago, we emphasised the urgency of alleviating the “too big to fail” issue. Where do we stand today? Allow me to state clearly right now: the “too big to fail” issue will not resolve itself. Last year, the big banks significantly reduced their balance sheets – a move explicitly welcomed by the SNB. The “too big to be rescued” issue has thus also receded somewhat. However, there has been hardly any alleviation of the “too big to fail” issue. Big bank liabilities, which at the end of 2008 were still almost six times Swiss GDP, were reduced by the end of 2009 to just over four times GDP. Nevertheless, the big banks’ share of markets relevant to the Swiss economy – and hence their systemic importance – remains just as high as before: the big banks grant a third of domestic loans and hold a third of domestic deposits. In other words, Switzerland is still vulnerable, and the need for action remains great. This opinion is shared by the commission of experts appointed by the Federal Council on “Limiting the economic risks posed by large companies”, of which I am Vice Chairman.
6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Chart 6: Bid/offer spreads on gilts  Chart 5: Gilt yields 5 year  10 year  30 year  5 year  Per cent  10 year  Basis points 4  1.6  19 Mar: Further BoE package (Bank rate cut 15bps and additional £ asset purchases)  30 year  19 Mar: Further BoE package  3.6  1.4  3.2  1.2  2.8  1  2.4  0.8  Jan 20  Feb 20  Mar 20  Apr 20  May 20  2  0.6  1.6  0.4  1.2  0.2  0.8  0  0.4  -0.2 Jun 20  Sources: Bloomberg Finance L.P., TradeWeb and Bank calculations  Jan 20  Feb 20  Mar 20  Apr 20  May 20  0 Jun 20  Source: Eikon by Refinitiv  Moment 4: congestion in sterling money markets When our sterling desk received a call from a large asset manager to let us know that – highly unusually – it had been unable to liquidate its holdings of bank certificates of deposit (CDs) to meet a margin call, we knew the dash for cash had reached the sterling money markets. The coming days brought stories of companies and local authorities also seeking liquidity – whether through greater borrowing3, selling assets, or drawing down their holdings in sterling money market funds (MMFs).

Just after 9pm that evening, we received an email from the Federal Reserve: could the dollar swap line central banks speak the following morning? The dollar swap lines may be the most important part of the international financial stability safety net that few have ever heard of. Global trade and investment relies on the dollar. In normal times, firms and local banks located outside the United States can easily secure these dollars using FX swaps, provided by international banks with access to US markets, to exchange their local currency for dollars. In times of turbulence, however, these markets can become impaired, or even seize up altogether, as the international banks batten down the hatches. Trading firms who cannot secure dollars will either have to cease trading altogether, or try to raise dollars in other ways, for example by liquidating dollar-denominated assets. That selling pressure, if allowed to take hold, could trigger, or amplify, global financial instability. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  That Monday night, the first signs of such stress were starting to emerge: the dash for cash had reached FX markets. Falling asset prices and rising panic about the outlook were boosting offshore dollar demand. But international banks’ capacity (and willingness) to meet this demand was becoming impaired – raising the cost of local dollar funding relative to that available to onshore US firms. That divergence was particularly marked in Japan (green line in Chart 3).
The third and last initiative we are working jointly with Shenzhen relates to talent development. You may recall that last year we launched the Fintech Career Accelerator Scheme and, since then, more than 70 Hong Kong students have been working on fintech projects in 12 banks and the HKMA. Building on the success of this scheme, and with the support of the Shenzhen OFDS, we have secured commitments from several high-tech firms in Shenzhen, including Ping An Technology, WeBank, Tencent and others, to offer summer intern positions for Hong Kong students to learn the latest technologies, not only in financial application but also in areas such as big data analytics or artificial intelligence. This people-to-people approach will deepen collaborative ties between Hong Kong and Mainland China in fintech development to our mutual benefit. 3/4  BIS central bankers' speeches  Enhanced research 15. Finally, I want to talk about enhanced research, which is one of the seven initiatives in the package helping Hong Kong to migrate to the new era of Smart Banking. Today we will publish our second whitepaper on DLT. You may recall that we released the first DLT whitepaper around this time last year, in which we explained how the technology works, outlined proof-of-concept projects and, more importantly, identified potential implementation challenges and issues.

The next step would be for the HKMA to work with the banking industry and the fintech community to turn the findings and advice in the second whitepaper into a set of practical guidelines for the use of DLT in the banking sector in the future. Given the rapidly evolving nature of DLT, this is no easy task to undertake. We welcome comments and input from the stakeholders and stand ready to share the findings of our research and practical experience with our international peers. Conclusion 19. Ladies and gentlemen, now is an exciting time for financial innovation. Technology is a game changer for the future of banking, payment and other financial services. It will differentiate winners from losers. I am very pleased to share with you today the important progress made by Hong Kong in cross-border collaboration and the use of DLT applications. As I said in my speech last month, the transformation of our banking system to a new and higher level of Smart Banking is not just something that is nice to a have, it is a must! To stay relevant and ahead of the game in this new era, I am sure you will agree that the collaborative efforts and research developments that I just mentioned are the essential building blocks to facilitate financial innovation and prepare Hong Kong to advance to the new Smart Banking Era. 20.
This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport. This results in lower production costs. 2  BIS Review 97/2007  Monetary policy is oriented towards low and stable inflation. The operational target is annual consumer price inflation of close to 2½ per cent over time. The objective of low and stable inflation provides the economy with a nominal anchor. Monetary policy shall also contribute to stabilising output and employment. In a small, open and decentralised market economy like Norway, and with our particular industry structure, there will be cyclical fluctuations. When economic agents have confidence that inflation is low and stable over time, the interest rate can also be set with a view to dampening the fluctuations somewhat. Monetary policy in Norway is in line with the monetary policy conducted by most central banks in the OECD area. The challenge of monetary policy is how the interest rate should be set ahead in order to bring inflation close to target while avoiding an overheating of the real economy. As a general rule, central banks influence the shortest money market rates via the key policy rate. However, economic agents’ consumption and investment decisions depend more on their interest rate expectations.

I believe many of those present here have a special interest in developments in the exchange rate, and will therefore discuss this in more depth towards the end of the address. The economic situation and the orientation of monetary policy The Norwegian economy is now in a cyclical upturn. Over the past three years, mainland GDP has grown by approximately 4½ per cent annually, and the strong growth has continued in 2007. In the first half of the year, annualised growth was close to 6 per cent, and even if GDP growth in the third and fourth quarters should be zero, annual growth will be well over 4 per cent. As the chart shows, there have not been four consecutive years with such strong growth since 1971. At the same time, productivity growth in the Norwegian economy has been strong, and the supply of labour has been ample. The growth capacity of the economy has therefore been high. Low interest rates, growth in public demand and in petroleum investment and vigorous international growth have resulted in high income growth in the household and business sectors. Moreover, low interest rates have made it more profitable to bring forward consumption. In addition to contributing to the increase in actual income, the sharp improvement in the terms of trade may have raised households’ income expectations. On balance, this has boosted demand for goods and services. So far, there are few signs of a slowdown in the Norwegian economy.