samchain/econo-pairs-v1 huggingface dataset:
The overall level of economic activity in the UK is dominated by the services sector and here the picture is more mixed. However, a good survey barometer of the services sector is probably provided by the purchasing managers’ index which is published every month. The latest survey shows that after a dip in December, services activity returned to growth in the early months of this year (see Chart 3). The rate of growth in the services sector indicated by recent business surveys is not as strong as we saw in the period before the recession. But that should not be a surprise. The services sector is more heavily dependent on domestic consumer demand than manufacturing, and therefore the impact of higher VAT and other imported price rises may be more noticeable in the short-term. It is also worth noting that services growth was particularly strong from the mid-1990s to the mid-2000s, growing much faster than manufacturing and other sectors of the UK economy.5 With the economy rebalancing and the manufacturing sector now performing more strongly, we should not expect services growth to return to the strong rate seen before the global financial crisis. 5  The output of the UK services sector rose at an annual rate of 3.8% between 1995 and 2007, compared with 2.9% average growth across the economy as a whole over this period.

With consumer price inflation remaining high, this pattern is likely to continue through this year. Most forecasters are assuming that there will be limited upward pressure on wages from high inflation in the short-term, partly because of the downward influence of relatively high unemployment and partly because the rise in inflation is expected to be temporary. The latest consensus forecast is for average earnings growth to pick up to 3% by 2012 from the current underlying rate of increase of 2.3%. However, Income Data Services are already reporting that pay settlements have moved up to 2.8% in the private sector, pushed up by a number of pay deals linked to the Retail Prices Index. In my judgement, there are upside risks to both inflation and consumption growth from a stronger rebound in wage growth as the recovery proceeds. This is one of the reasons – though not the only one – why I believe that the current Inflation Report forecast that inflation will fall back to the 2% target is relatively optimistic. The behaviour of wages and consumption will therefore be an important influence on the outlook for both growth and inflation over the next couple of years, and this is clearly an area that the Monetary Policy Committee is monitoring closely. With imported price pressures and VAT adding to inflation in the short-term, we should not be surprised to see a squeeze on real incomes and relatively subdued consumer spending in the first half of this year.
This was judged to be especially important at a time when we wanted to quickly generate public confidence in the new monetary policy regime. It was also considered reasonable to attempt to stabilise the value of money in terms of a basket of goods that had great significance for the average person. Additional advantages that are usually put forward are that the CPI is published regularly and comparatively often, and that CPI inflation is normally not revised. Looking back on the ten years or so that have passed since the introduction of inflation targeting, we can conclude that the CPI has worked relatively well as a target variable. When the target was adopted it was probably considered by many to be unrealistic. But during these years inflation has averaged close to 2 per cent. The credibility of the target is also high today, judging by the inflation expectations of households and other economic agents. I don’t think it’s an exaggeration to say that we, through the new policy with a target for the rate of increase in the CPI as an anchor, coupled with a successful consolidation of the government finances, have essentially succeeded in achieving what we had hoped for. Sweden has gone from being a high-inflation economy, characterised by recurring cost crises and unstable economic developments, to being an economy with low, relatively stable rises in prices and wages, where the risk of periods of overheating and subsequent recessions has been reduced considerably.

Due to the fact that the change in the general interest rate situation was both large and protracted, the CPI was affected for an appreciably longer time than one to two years. As the low CPI inflation was largely a result of the Riksbank's rate cuts and therefore was judged to be transitory, the Bank did not see reason to counter it through a further easing of monetary policy. During this period, however, the Riksbank was often asked why the repo rate was not lowered in spite of below-target inflation, which indicated the need for a more explicit explanation of policy. To this end we highlighted a new index as an important inflation measure, namely UND1X, which, among other things, excludes mortgage interest costs. The June Inflation Report in 1999, for instance, illustrates how UND1X was used to clarify the formulation of monetary policy. When the repo rate was left unchanged on this occasion UND1X inflation was forecast to be close to 2 per cent towards the end of the forecast period while CPI inflation was expected to be considerably below target.
The pace of  2  BIS Review 76/2001  demand growth in the US needed to slow down - as of course it has, dramatically, to the point where growth in the US in recent quarters has pretty well come to a halt. The big questions now are whether we are at the low point, and what might we expect in terms of the strength of a recovery. And the reality is that no-one can be confident that they know the answers. What we do know so far is that there has been a sharp downwards inventory correction and a contraction of investment notably in ICT which was so buoyant before, with associated declines in equity prices and in US imports. Consumption growth, supported by a strong housing market has so far held up rather better than might have been expected. Looking forward, on the positive side, one could point to the strong monetary policy response to the slowdown, and to the recent tax rebate, which have yet to have their full effect. There were some suggestions in recent capital goods orders figures that the rate of decline in investment spending may now slow. And the rate of inventory liquidation had stabilised pointing to a turn at some point so long as consumption continued to be reasonably well sustained. Consensus opinion, or so it seemed to me, had become modestly optimistic. At least that was the prospect until Tuesday and the appalling terrorist attacks in New York and Washington.

But the ECB has had to take account, too, of domestic demand pressures within the euro area, and of the fact that, even on the core measure, Euro area inflation was moving up gradually to the top of the ECB's 0-2% range. Frankly I don't see how anyone can be confident whether the ECB had it precisely right or wrong - it is perfectly normal for even the best-informed people to disagree on these judgements, as anyone who reads our own Monetary Policy Committee meeting minutes will tell you. But I am wholly confident that the ECB is sensitive to the issues surrounding those judgements, including the downside risks in the US, as indeed it demonstrated a fortnight ago. So, too, are we in the United Kingdom. In our case, we again enjoyed relatively steady overall economic growth through last year, combined with a further fall in unemployment to its lowest rate for over 25 years. Inflation meanwhile continued to run below the Government's 2½% target - and is currently running at around 1½% on the eurozone measure of inflation. This relatively low inflation rate was partly a result of the dampening effect of sterling's surprisingly persistent strength against the euro. The problem for us - and it is a real problem which has been with us for some time now - is the sectoral (and associated regional) imbalance within our overall economy.
It is perhaps not a great surprise then that their central projections tend to cluster in a remarkably narrow range. For example, take the forecasters who were surveyed by Reuters prior to the July MPC meeting last year. At that point there were only two out of 47 who expected interest rates to rise above 5% by now and only one expected them to be below 4.25%. Fast forward to the most recent survey and you will see that none of the 52 expect rates to go above 6% in the next year and only two expect rates to go below 5.5%. To gauge the real range of uncertainty you need to look beyond the central forecasts at the full probability distribution of possible outcomes. The fact that most forecasters agree on the prospect does not mean it is likely to happen. Central banks need to be particularly cautious in putting weight on market expectations and outside forecasts because they are based at least in part on judgements about what we will do. In my view it is sensible for independent forecasters to assume that we will do our job and keep inflation low; but we can’t take comfort from the fact that most external forecasters therefore expect inflation to return and stay around target – its our job to justify their faith and keep their confidence. We must avoid chasing our own tail. Of course, the uncertainty of the future and of the past is a factor in our decisions on interest rates.

Chart: Mainland GDP  1/4  BIS central bankers' speeches  In Norway, growth in the mainland economy picked up through 2017 and the economic outlook improved. Low interest rates, improved competitiveness and an expansionary fiscal stance contributed to the upturn, while oil investment declined at a slower pace after falling sharply for several years. Although the activity level in the Norwegian economy was still somewhat below a normal level, the economy was emerging from the downturn that followed in the wake of the fall in oil prices in 2014. Employment was rising and unemployment was falling. The improvement in the labour market was reflected in a moderate increase in wage growth, which in the preceding years had been restrained by the decline in oil prices, lower capacity utilisation and lower underlying productivity growth. Chart: Consumer prices The depreciation of the krone following the sharp fall in oil prices in 2014 and 2015 gradually fed through to prices and resulted in higher inflation. As this effect faded and the krone appreciated, inflation fell back. Both low imported inflation and weak cost growth in the Norwegian economy contributed to low inflation in 2017. Underlying inflation remains below target, but prospects for higher levels of activity and slightly higher wage growth indicate that inflation will rise in the period ahead. Chart: Debt ratio and interest burden Elevated house price inflation and high debt growth have increased household sector vulnerabilities. After rising faster than household income for several years, house prices began to fall in April 2017.
Conduct issues are viewed seriously by the Bank and we are fully committed to the responsibility entrusted to the Bank to effectively enforce regulatory requirements on fair conduct towards consumers. The Financial Services Act provides the Bank with explicit and expanded enforcement powers which include monetary and non-monetary actions. In addition to private and public reprimand as well as direction to make restitution to aggrieved parties. As a result of supervisory interventions by the Bank, more than RM30 million in premiums were refunded to the affected policyholders due to mis-selling practices in the sale of life insurance products in the past. 4  BIS central bankers’ speeches  The Bank had also directed insurers to refund the premiums in more than 700,000 cases involving the forced purchase of personal accident policies. In addition, insurers have been directed to modify or withdraw misleading advertisements, make call backs to consumers to confirm the products purchased without adhering to proper disclosure practices, as well as strengthen internal controls over sales and marketing practices with respect to bancassurance products. The enforcement measures undertaken signals the Bank’s low level of tolerance for misconduct. It also serves to remind the industry of the Bank’s expectation for common complaints and grouses against the industry such as delay in claim settlement and mis selling practices by agents to be completely eliminated or at the very least reduced significantly. Conclusion The period ahead for the Asia Pacific region presents new risks, challenges and opportunities for the insurance and takaful industries.

Muhammad bin Ibrahim: Beyond borders – bridging new horizons in Asia Pacific Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 5th Malaysia Insurance Summit “Beyond Borders: Bridging New Horizons in Asia Pacific”, Kuala Lumpur, 7 October 2015. *  *  *  I am delighted to join you today at the 2015 Malaysia Insurance Summit themed “Beyond Borders: Bridging New Horizons in Asia Pacific”. I understand that this is the fifth year the Malaysian Insurance Institute has organised this event which brings together insurance and takaful professionals from around the region and beyond to discuss key developments in the industry. Prospects of the Asia Pacific region The world is undergoing rapid structural changes amidst a rapidly evolving Asia Pacific as an important centre of growth. The International Monetary Fund has projected a growth of 5.6 per cent for the Asia and Pacific region in 2015 and 5.5 per cent in 2016, with the region expected to remain the global growth leader over the medium term. Growth is primarily driven by domestic demand of Asia’s 4.3 billion inhabitants who account for 60 per cent of the world’s population. The region is also expected to be the strong driver of world insurance growth, with its share of the global insurance market likely to rise to 40 per cent in the next five years.
For instance, in the case of the French indexed bonds, the lag length is limited to three months, equivalent to that of the US TIPS and the Canadian indexed government bond, but slightly below that of the UK where an eight-month lag is  4  To give a magnitude order, a real rate of 4% and an expected inflation rate of 2% would generate a compound bias of 8 basis point, which is in practice fairly small. 5  This phenomenon is known as the convexity bias. It grows with maturity, as compounding increases, and may vary across time, as volatility in the yield is also likely to change over time. There is no reason to think that the convexity adjustment is the same for the conventional forward curve and for the indexed forward curve. BIS Review 37/2004  3  required. As a consequence, because the real yield is distorted, the information content of the breakeven inflation rate will also be affected. According to some empirical research6, this bias is also estimated to be fairly small, at around 5 basis points. Liquidity bias: Finally, to conclude with this non exhaustive review of technical biases, one should also mention that, in general, indexed bonds are relatively less liquid than conventional government bonds. Holding periods seem to be longer for the former and this is also reflected in the relatively low trading volumes of inflation-indexed bonds.

Christian Noyer: The role of inflation - indexed bonds in the process of setting monetary policy: a central banker’s perspective Speech by Mr Christian Noyer, Governor of the Bank of France, at the Morgan Stanley seminar on indexed bonds, Paris, 9 June 2004. *  *  *  Ladies and Gentlemen, [Dear Friends], It is a great pleasure for me to address you here in the context of the first “Séminaire de Paris” on inflation-linked securities organised by Morgan Stanley. Today, I will focus more specifically on “The role of inflation - indexed bonds in the process of setting monetary policy” from a central banker’s perspective, based on my own experience as the former Vice-President of the ECB and the current Governor of the Banque de France. Throughout my presentation, I will occasionally refer to the monetary policy strategy framework implemented by the Eurosystem in which asset prices, in particular inflation-indexed government bonds, can play a role in the context of our economic analysis. Having said this, I will neither elaborate further on the ECB’s framework nor comment on the last Governing Council’s monetary policy decision. Price indexation of financial contracts is not a new phenomenon. According to Robert Shiller1, the world’s first known inflation-indexed bonds were issued by the Commonwealth of Massachusetts in 1780 during the Revolutionary War. These bonds, the so-called “depreciation notes”, were issued to US Soldiers as deferred compensation for their services. They were mainly designed to deal with severe wartime inflation.
The less sloped straight line is an iso-loss line that corresponds to equal weight on inflation and output-gap stabilization, that is to a “lambda” equal to one. 4 With such equal weight, the high policy-rate path is preferred. The steeper straight line corresponds to lambda equal to 0.3, that is, with a weight on output-gap stabilization equal to 0.3 relative to the weight on inflation stabilization. With such a weight, the main policy-rate path is about as good as the higher and clearly better than the lower policy-rate path. At the time, Norges Bank had announced that its decisions were consistent with a relative weight on output-gap stabilization equal to 0.3 and a relative weight on interest-rate smoothing of 0.2 (Bergo 2007 and Holmsen, Qvigstad, and Røisland 2007). With some weight also on interest-rate smoothing, the main policy rate is best. The use of the mean squared gaps is one more step towards more systematic and transparent inflation targeting, in which central banks can be evaluated and held responsible for their decisions with even greater accuracy than before, following the introduction of numerical inflation targets, published forecasts of inflation and the real economy, published policy-rate paths and other important steps taken in the development of a systematic and transparent monetary policy. References Adrian, Tobias, and Hyun Song Shin (2010a), “Financial Intermediaries and Monetary Economics,” in Friedman, Benjamin M., and Michael Woodford (eds. ), Handbook of Monetary Economics, Volume 3, Elsevier, forthcoming.

Risk management aims precisely at identifying potential contingencies, appraising them and adopting adequate preventive measures to avoid their materialization as much as possible, as well as having in place timely response plans to correct or mitigate the impact of such contingencies as they occur. Our experience at the Central Bank of Chile At the Central Bank of Chile, we are in constant search for improvements in integral risk management, understanding that it adds value to business processes by helping to prevent, among other things, interruptions in operations and damage to reputation. For risk management, we have a corporate governance structure headed by the Board, Senior Management, a committee of independent experts (the Audit and Compliance Committee) and the Risk Committee, which promotes the framework for the management of risks that may affect the Bank's ability to achieve its mission, its vision and its strategic objectives. While risk-oriented functions had been in place for quite some time, in 2019 the Bank created a unit to cover strategic, financial and non-financial risks (Corporate Risk). Issues that have been addressed since then include comprehensive and consolidated  1/3  BIS - Central bankers' speeches  risk assessment, having an appetite and tolerance statement, and incorporating the Corporate Risk unit, in an advisory role, into the process of analyzing strategic portfolio decisions in the decision-making process in the policy area. We have recently made public the Strategic Plan that will guide our institution in the fiveyear period 2023-2027.
Hong Kong also boasts a vibrant offshore renminbi bond market, again, the largest outside Mainland China, with some RMB340 billion bonds outstanding. More than 200 banks from all over the world are using our renminbi clearing platform to conduct a wide range of business activities. The goal of the HKMA, among other things, is to promote offshore renminbi business development through securing the necessary policy headroom, facilitating liquidity management and building a robust infrastructure for conducting the business. 3. To make this possible, we have put in place a RMB400 billion currency swap agreement with the People’s Bank of China, which can be activated when market conditions warrant. We have also made available renminbi liquidity facilities to banks in Hong Kong, in the form of an intraday repo facility of RMB10 billion, and a bilateral repo line of RMB2 billion with each of the seven Primary Liquidity Providers. In terms of our renminbi real time gross settlement system, currently around RMB800 billion worth of transactions go through the system every day. So, you can see clearly why we have sought to further develop renminbi business. 4. Secondly, the promotion of asset management. We want to attract Mainland and overseas asset managers to Hong Kong. We have made numerous trips to the Mainland and overseas to meet with asset managers, often on a one-on-one basis, to explain to them the benefits of establishing in Hong Kong. And, our work is paying off.

Eddie Yue: Hong Kong Monetary Authority’s work on market development Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the 2nd Asia Treasury and Trade Summit 2016 “Treasury Re-imagined”, organized by The Asset, Hong Kong, 11 May 2016. *  *  *  Daniel (Yu), distinguished guests, ladies and gentlemen: 1. Good morning. I would like to thank The Asset for hosting its Asia Treasury and Trade Summit in Hong Kong again. And, it is my great pleasure to welcome all of you to this event, in particular those who have travelled from overseas. As CFOs and treasurers, you are important users of Hong Kong’s financial services. Over the years, we have listened to and worked with many of you, not just to better serve your business needs, but also as partners to help develop Hong Kong as an international financial centre. Let me therefore start this morning by sharing with you a few examples of the HKMA’s work on market development. Some of you here today may have heard these facts before, so apologies for that, but we like to repeat the good news whenever we can! Development of Hong Kong as IFC 2. First, the promotion of renminbi business. And, I’m delighted to see that discussion of the renminbi “as a treasury currency” is high on your Summit agenda today! Indeed, Hong Kong is the largest global offshore renminbi business hub, with a liquidity pool of close to RMB900 billion, the largest outside Mainland China.