samchain/econo-pairs-v1 huggingface dataset:
Actually, if this phenomenon occurs within a context of sudden drops in the copper price or costlier external financing, difficult adjustments could be necessary. The current macroeconomic scenario poses significant risks, demanding policy responses in different directions. On one hand, although so far its effects have been mild, the external situation is severe. Chile is a small economy, commercially and financially open,  6  BIS central bankers’ speeches  so it will not be immune to global developments. The probability of extreme events has not diminished, and their materialization could have very severe consequences on output around the world, including Chile. On the other hand, the strength of domestic demand and output, together with recent increases in some commodity prices, means that medium-term inflationary risks remain present. The MPR is within a range of values that are considered neutral, providing flexibility to wait for the concrete effects of such scenarios on the Chilean economy to become visible. The Board monitors closely the evolution of the external and internal macroeconomic scenario and its implications on inflation, and reiterates its commitment to conduct monetary policy so that projected inflation stands at 3% over the policy horizon. Allow me some final remarks. Final remarks Our latest presentations to the Senate have been marked by periods of high volatility or relative calm in international financial markets.

Even though many countries including Thailand have been affected by financial crises and regulatory reforms, we are currently in the stage of revival with high potential growth among ASEAN countries. According to the IDC Financial Insights’ observation on key structural shifts, trends of financial institution sector are: expansion of banking industry, particularly, in South Asia and Southeast Asia due to an escalation of financial inclusion and new-entry of financial players; technology refresh to serve with more sophisticated financial products and services; and regional integration (AEC) and the growth of Asian insurance business. These are paths to higher competition among banks, in which, IT innovation is a key to distinguish each brand. Undoubtedly, banks and related parties invest more in IT projects to advance their services responding to digital era. To be more specific, we have to admit that we live in the world of digitization with an escalation of Internet users and Y generation. Consequently, this group of people becomes a new targeted customer group for banks. Interests in higher conveniences of services which result from high integral digital environment and multi-task lifestyle of the people prompt banks to respond with “Virtual Banking Concept” – any interaction with a bank happens online instead of face-to-face meet up at a branch. To illustrate, the numbers of Internet and mobile banking users have grown up recently as well as volume and value of transactions via such systems.
As in many countries in the region, some banks in Hong Kong have placed too much emphasis on collateral in making their lending decisions. Collateral does of course have an important part to play in providing secondary protection to the lender if the borrower defaults. But the primary consideration should be debt servicing capacity of the borrower. The drawbacks of over-reliance on collateral become all too clear when asset values collapse as they have done during the Asian crisis. The act of realizing collateral can in itself be destabilizing as we have seen when banks have sold shares in listed companies pledged by their owners to secure their private borrowing. In such cases, confidence in the company concerned can be seriously undermined. I should point out however that some of the worst fears that had been expressed about the property exposure of banks in Hong Kong have so far proved to be unfounded. The major property developers have come through the recession relatively unscathed and the performance of the all-important residential mortgage portfolio has been much better than other types of lending. At end-March of this year, the delinquency ratio for mortgages was only 1.13%. This seems to confirm that homeowners will do all they can to avoid default, though this may be at the expense of cutting back on other forms of discretionary spending.

More recently, the ringgit had adjusted to reflect changes in the global economy including the developments in the US economy and global crude oil prices. Certainly there are risks associated with different levels of exchange rates and that different levels of exchange rate will benefit differently the various sectors and stakeholders in the economy. Looking forward, while the financial markets can be capricious, as market players focus on short-term developments, our role as policy makers is to look beyond these noises. As we continue to address our vulnerabilities and improve domestic fundamentals, the ringgit will eventually reflect the strength of our economy. Our path forward would continue to be characterised by fast-moving and ever-evolving macroeconomic risks and constantly evolving global trends. In facing the complex and multifaceted risks associated with it, the Malaysian economy is subjected to concerns of price stability and many other considerations that could affect overall macroeconomic stability. This brings me to another one of our approaches in relation to ensuring overall macroeconomic stability. We do not rely on any single policy tool. In particular, dependence on monetary policy as the sole instrument would be too narrow an approach. Monetary policy at best provides an enabling macroeconomic environment to support growth, and it should not be relied upon as the primary instrument to drive growth. In this regard, the Bank’s policy toolkit relies on a broad set of instruments to achieve overall macroeconomic stability. This includes considerations of macroprudential and pro-growth policies, as well as our advice on fiscal policy to the government.
In this respect, when forming their expectations, economic agents should count on the commitment of the Governing Council of the ECB to maintaining price stability, defined as HICP inflation below 2%, in the medium term. Monetary policy will not accommodate inflationary tendencies in the euro area. It will be critical to ensure that the temporary upward pressure on HICP inflation is not followed by more lasting upward pressure from domestic factors. The interest rate measures taken by the ECB over the past few months were aimed at containing the emergence of inflation expectations and convincing the social partners, as well as the public at large, that price stability in the euro area will be maintained. By ensuring that wages continue to grow at a moderate pace in 2001 and, may I add, beyond next year, wage-setters would facilitate the ECB’s task of maintaining price stability. They would at the same time make an important contribution to maintaining the current strong employment growth in the euro area. The maintenance of robust non-inflationary growth is a challenge faced in many policy areas, as well as by the social partners. Many euro area countries have embarked on a path of structural reform, which they now need to adhere to strictly. Increasing the flexibility of labour markets and deregulating product markets will enhance the growth potential of the euro area by allowing for a better exploitation of the opportunities which are offered, for instance, by the single currency and the new information and communications technologies.

Forecasts by international and private organisations currently project euro area real GDP growth in the coming one to two years to be somewhat lower than this year’s more than 3%, but to remain at around 3%. The exchange rate of the euro has remained a cause for concern. The depreciation of the euro during 1999 and 2000 has added to upward pressures on consumer prices in the euro area. The exchange rate of the euro has now remained out of line with economic fundamentals for a prolonged period of time. The G7 expressed concern about the global repercussions of the current level of the euro exchange rate. In order to support the euro, concerted interventions by all G7 members, on the initiative of the ECB, took place on 22 September, and the Eurosystem intervened several times in November. Recent Harmonised Index of Consumer Prices (HICP) inflation rates have been higher than could have been expected only a few months ago. Current inflation reflects the unexpected sharp rise in oil prices 1  BIS Review 109/2000  in recent months. Notwithstanding a possible decline in oil prices, annual HICP inflation rates are likely to remain above 2% for some time to come. It needs to be recognised that current upward pressures on consumer prices can be alleviated most smoothly if economic agents see them for what they are, namely one-off or temporary price increases resulting from external factors.
This was important, because it meant that, in principle, a country could have lower productivity across the board, in the production of every good, and still end up as a net exporter of some of them. But the basic points survive: there’s no reason to suppose that commerce across an international border is any less mutually beneficial than that within a single country; nor is there any reason to view imports as intrinsically bad. Of course, you might feel differently if you happen to be in one of the sectors at a comparative disadvantage. In the mid-1970s, just as the post-war boom in global trade was getting started, the UK’s clothing and textile industry employed over 800,000 people. That’s one in every 30 jobs. As markets opened up international prices fell steeply and, over the following thirty years or so, the domestic industry all but collapsed. Output fell 65%, employment by 90%. It now accounts for one in every 370 jobs. Not all of this reflects the effects of greater trade. Part of the post-war decline in textile employment – employment in manufacturing in general, in fact – reflected relatively rapid productivity growth, not cheaper imports. If it takes progressively fewer people to make the same amount of stuff you might expect employment to fall. Over time the share of jobs in manufacturing has fallen in every developed country, including in those regarded as industrial powerhouses, such as Germany and Japan.

And if the theme of this talk is that the benefits of trade involve imports as much as they do exports, the same point applies. Put simply, a significant curtailment of trade with Europe would force the UK to shift away from producing the things it’s been relatively good at, and therefore tends to export to the EU, and towards the things it currently imports and is relatively less good at. Chart 13: UK’s revealed comparative advantage  Chart 13, which plots “revealed comparative  with the EU  advantage” in each sector – roughly speaking a rescaled version of the balance of trade with the EU – gives some idea of what these sectors are: we tend to export services, financial services in particular, and import goods, notably food and capital equipment. All else equal, the first shift (i.e. away from services exports) would tend to lower UK income, the second to raise certain costs (that is, of food and machinery). And, albeit on a smaller scale, relative to their (much 16  larger) GDP, the same would be true for the EU . Trade really is mutually beneficial and less of it costs Source: UNCTAD and ONS; Note: Gross value added was used  us all. That these truths are a couple of centuries  as output. Revealed comparative advantage is expressed as the  old, and not always widely accepted, doesn’t make  ratio of a sector’s share in UK’s exports to the EU to its share in trade with EU.
The benchmark figure used for the weighting is based on the top panel of Figure 1B in Mayer and Pence (2008): “Subprime Mortgages: What, Where and to Whom?” Finance and Economics Discussion Series Paper No. 2008-29, Board of Governors of the Federal Reserve System – available on the Board of Governors website at http://www.federalreserve.gov/PUBS/FEDS/2008/200829/200829pap.pdf. BIS central bankers’ speeches  3  suggests that inflation is not likely to be a problem, then we can more comfortably align policy to continue supporting the recovery. Some observers and analysts have voiced great concern that the nascent economic recovery, combined with the actions of the Federal Reserve that have expanded its balance sheet, will lead to significant inflation. However, Figure 11 provides a variety of different measures of core inflation; core CPI, core PCE, trimmed core CPI and trimmed core PCE. It is striking how much all four series have declined. In fact many of these series are at their historical lows. Figure 12 shows the different measures of core inflation in the top panel, and the Federal Reserve’s balance sheet in the bottom panel. In the fall of 2008, the Federal Reserve’s balance sheet expanded significantly – but that period also corresponds to the emergence of disinflation (a reduction in the inflation rate) in the U.S. While monetary policy works with lags, why has the unprecedented increase in the Federal Reserve’s balance sheet corresponded with continued significant disinflation?

Eric S Rosengren: Two key questions about the economic recovery Remarks by Mr Eric S Rosengren, President and Chief Executive Officer of the Federal Reserve Bank of Boston, at the New England Mortgage Expo, hosted by the Connecticut Mortgage Bankers Association and The Warren Group, Boston, Massachussetts, 14 January 2011. *  *  *  I’d like to thank the conference organizers for inviting me to speak with you today. The beginning of a new year is a good time to discuss the outlook for the economy. I will also try to answer a couple of the key questions that most everyone seems to be asking about, in relation to this recovery.1 As I’m sure you know, over the past several weeks we have been getting economic data consistent with a somewhat happier new year. A recovery that has been anemic for the past year and a half looks to be increasingly supported by private spending as 2011 begins. The Blue Chip forecast for 2011 has increased 4 tenths over the previous month, to 3.3 percent. And I am slightly more optimistic than the Blue Chip; my own forecast is for growth of 3.5 to 4.0 percent over 2011. This is certainly an improvement, but – soberingly – would still leave the unemployment rate close to 9 percent at the end of this year, a rate far above anyone’s estimate of full employment.
So, as long as monetary policy behaves about as it has in recent years, then there is no reason to expect supply shocks to have lasting effects. So is Fed policy behaving as it has since the mid 1980s? Interestingly, although Fed policy is perceived as exceptionally accommodative, because of hitting the zero lower bound the federal funds rate is actually higher – has come down less – than would be expected if the Fed behaved as it has over the last 25 years. The current level of the funds rate suggest that  4  BIS central bankers’ speeches  we have been less accommodative in recent years given that interest-rate reductions (policy easing) ran into at the zero lower bound.4 Why the different reaction to supply shocks over time? But how confident should we be that the relationship we have experienced over the past 25 years – little response in medium term inflation rates to supply shocks – will continue? The answer is rooted in why we are seeing different reactions to supply shocks – in other words a different interplay of total and core inflation – now versus in the past. There are a variety of reasons why medium-term inflation has not been significantly influenced by short-run supply shocks in recent years.

At the same time, it should be followed by an accelerated convergence process of the supervisory and regulatory practices according to the financial centres of influence. Fourth, the current crisis confirmed our concern related to the exposure of the Balkan region to a relatively small group of banking operators of vast regional extension. Shocks affecting parent banks would affect one or several regional countries. A similar risk still persists even in the case when one of the branches in the region is hit by a shock. Similarly, the contagion risk is still present. Fifth, I believe the region should scrutinize carefully lending in foreign currency. It is essential to set a better balance between lending in the national currency and lending in foreign currency. To this aim, the nature of the exchange rate regime and the impracticability of central banks in the region to act as lender of last resort should be taken into account. In this context, we should support a stronger role of the national currency in bank lending, making lending in foreign currency more costly for banks if it is not supported by savings in foreign currency. The strong reliance of banks on foreign currency financial resources to support the rapid lending should be addressed and managed timely. Sixth, I think the current crisis will make the financial funds, which for a long time have rushed in numerous forms across all former communist countries of East Europe, scarcer.
The Basel Committee has been criticised by those who claim that introducing the leverage ratio creates a regulation that favours risk taking, as the measure deals with the banks in the same way irrespective of the risks they take. However, the leverage ratio is intended to 2  BIS central bankers’ speeches  complement the risk-based capital measure and to act as extra protection to ensure that the level of capital at the banks does not fall too low. It can, for example, limit how much the capital can fall in relation to the bank’s total assets if the models the banks use to calculate risk weights fail to capture risk to a sufficient extent and the risk weights therefore become too low. As yet, the Basel Committee’s agreement on the leverage ratio does not specify any quantitative requirements. However, from the beginning of next year, large banks all over the world will need to publish their leverage ratios. The idea is that the Basel Committee will monitor developments when the banks begin to report their leverage ratios with a view to migrating to a minimum requirement from 2018. However, in most cases the risk-based capital requirement will continue to be the binding capital requirement, and not the leverage ratio. However, the opposite may of course apply in some cases. This is also reasonable because, when all is said and done, a requirement that can never be considered binding is not particularly meaningful.

Some people wonder why don’t we simply make the Charter part of the HKMA’s regulatory requirements for banks given the importance of fair customer treatment? My reply to this is that: banks have to deal with tens of thousands of customers every day to provide a great variety of services and conduct countless transactions. While imposition of regulatory rules would bring about some effects, no external rules could possibly be all-pervasive, more difficult still about transforming the corporate culture or long-standing values in workplace. Fair treatment of customers ought to be firmly embedded in the corporate culture of banks that all personnel – from board of directors, chief executives, senior management, to frontline employees – will accept, defend and uphold treating their customers fairly as a guiding principle. Banks’ incentive mechanism must also promote and support this culture in every aspect of the banks’ operations. BIS central bankers’ speeches  1  6. Bank customers, as consumers of various types of bank products and services, should receive appropriate protection. While banks should treat their customers fairly, the latter should also be responsible and smart. The most basic requirement is that customers should try their best to understand the products and services provided by banks, including credit cards, personal loans, home mortgages and wealth management products, their relevant risks, costs and expenses, and whether the products and services are suitable for them.
In the eight quarters since the trough of the recession in the middle of 2009, real household income has fallen 2½ per cent, as only modest wage growth has been more than offset by elevated inflation. And with higher utility prices pushing consumer prices up another 1¼ per cent since June, it is probable that real household disposable income will turn out to have fallen during the second half of this year too. Against that background, it is not surprising that real consumer spending growth has been weak. Although elevated inflation has been the medium through which some of this squeeze in living standards has been brought about, the squeeze reflects three deeper real economic forces that monetary policy can do little to negate. The first force is the aforesaid rise in the price of commodities, relative to the prices of global goods and services, associated with the confluence of strong demand growth in the emerging economies and commodity producers’ inability or unwillingness to increase supply to match the extra demand. The second force is the fall in the purchasing power of sterling. Before the financial crisis, the UK was operating with an unsustainably low level of national savings and an associated current account deficit. In addition, the crisis has probably led to a long-lasting hit to the demand for financial services exports.

However, that rate is now heading upwards, rising from around 1.5% in mid-2022 to 3.6%12 in February this year. At some point, however, the fall in energy prices, the improvement in supply chains and the moderating demand, owing to tighter financial conditions should begin to gradually produce reverse effects on inflation. Thus, at the current juncture, we could well be nearing some sort of crossroads, where the lagged effects of the past increases in commodity prices and exchange rate depreciation are still present, but diminishing, while the first effects of the most recent decreases and appreciation may be emerging and on the rise. However, when this crossroads is reached, and how strongly it will support a decline in inflation, will depend on the extent of the symmetry between the impact of higher and lower costs on prices. In this regard, the impact of cost decreases on inflation may not be fully symmetrical to the impact of cost  10  These items were more directly affected by the increase in the cost of energy, food prices or supply bottlenecks, together with the strong demand for specific goods during the pandemic (especially in the case of durable goods) and the reopening phase (notably in the case of services). 11  A breakdown of core inflation by destination of expenditure shows that the components related to transport recorded an annual price increase at 7,1% in February, 7,3% in December. Prices in the housing equipment and maintenance sub-index increased 9% February, down from 9,3% in December.