samchain/econo-pairs-v1 huggingface dataset:
This framework of macro/financial policies and institutions have allowed the country to take big steps in achieving economic stability, with inflation around the target, surpluses in fiscal balances and in the current account of the balance of payments in times of bonanza, the real exchange rate aligned with its fundamentals and output growing around trend. In addition, this framework of policies and institutions imprints a countercyclical character of fiscal policy and favors the use of countercyclical monetary policy. In particular, in this setting monetary policy reacts to deflationary effects of a weakened economy and vice-versa, so it naturally helps to stabilize the effects of demand-side shocks. In the present conjuncture, this macro/financial policy framework should favor the way the Chilean economy absorbs swings in the international scenario. Two factors contribute. First, with inflation expectations well anchored around the target, the disinflationary effect of idle capacity (i.e., a negative gap between output and trend output) originating in less favorable external conditions, would naturally lead to a countercyclical monetary policy. At the same time, the floating regime permits the real exchange rate to adjust to changes in the international scenario. Overall, depending on the size and on the inflationary effect of said adjustment, it could restrict monetary policy reaction. Therefore, the composition and transmission of the external shock is very relevant in the most adequate policy reaction. Second, fiscal policy, whereby spending is tied to permanent income of the government, largely eliminates the traditional pro-cyclicality that Chile has shown in face of shocks in the terms of trade.

Although this process of financial market normalization is part of a necessary correction, it is neither easy nor prudent to express what this correction will finally be like. What can be said with some certainty, however, is that volatility will be here for a while and will be associated to lost or reduced access to financing from non-banking financial institutions or even particular banks. The longer and deeper this adjustment, the larger the effects on financial markets and the world economy overall. The most likely final effects will be increased risk premiums (an inevitable or even healthy correction), a deeper and more prolonged adjustment in the US housing market, and some less economic growth in the US and in the world. Evidently, a deepening of these problems could be more hurtful for global growth and the commodity prices. This adjustment comes on after a long period of very expansionary monetary policies in industrial economies that had begun a normalization process. But still, one should not overlook the fact that this correction finds the world economy close to completing the best five-year growth period since the early seventies, with large commercial banks in a very solid position, enterprises with good profits and the main industrial economies with flexible exchange rate regimes, controlled inflation and central banks that have gained great credibility for their commitment to price stability.
They are attracted not just by work opportunities but also by our cosmopolitan lifestyle, by our thriving cultural – and culinary – scene, and by the spectacular country trails and fine beaches that are so close to the bustle of city life. Crowning all of this is Hong Kong’s geographical and historical role as the gateway that connects China and the rest of the world, and the enormous opportunities that this brings. This is, I think, 1/4  BIS central bankers' speeches  the defining feature that firmly positions Hong Kong as the leading IFC in the Asia time zone. Resilience Resilience is the bedrock of an IFC. In the past quarter-century, Hong Kong has been exposed to a series of crises that have severely tested our financial system — the Asian financial crisis, SARS, the global financial crisis, and more recently the triple whammy of social unrest, geopolitical tensions, and COVID-19 pandemic. Through all of these crises our financial system has emerged stronger. Take the monetary system. The Linked Exchange Rate system has remained rock solid throughout these testing times. Indeed, market confidence in the system has only strengthened over time. At the height of the triple whammy that I just mentioned, we saw continued inflows into the Hong Kong dollar, pushing our exchange rate to the strong side of the conversion zone. Speculators betting against the Hong Kong dollar learned a hard lesson.

Firstly, we understand that the industry is in the midst of finalising a recent independently-conducted Customer Satisfaction Index (CSI) that will be a means to gauge the insurers’ performance against the enhanced insurance industry’s Customer Service Charter which was introduced in January 2018. This survey includes minimum service standards that reflect the guiding principles for good customer service. The results of the CSI survey is expected to be finalised by end-2018. I would urge you to familiarize yourself with the Customer Service Charter of your principal insurers and use it to guide you in your dealings with customers so as to ensure good customer experience. Secondly, the Bank is at a fairly advanced stage of finalising the policy document on fair treatment of financial consumers. This will address the Bank’s increased expectations on financial institutions, including insurers, to cultivate a culture of fair dealing and responsible behaviour. The onus will be on insurers to ensure agents observe new standards to exercise due care, skill and diligence in dealing with financial consumers. We should expect principal insurers to accord greater emphasis on the importance of (1) providing clear and concise product information to customers to enable them to make informed choices, (2) offering products that are appropriate to the customers’ needs and financial circumstances, and (3) providing individualised advice that is in the best interest of the consumer. Let me conclude.
At the same time, some measures recently introduced at the national level have also supported the availability of bank financing to SMEs. Specifically, the regulatory definition of an SME has been significantly widened, bringing it in line with that predominating at the European level and so extending the benefits of the lower capital requirements associated with loans to such firms. As a result of the conjunction of the previous developments, most quantitative and qualitative indicators point to a higher dynamism in credit flows in Spain which is linked both to supply and demand factors. For instance, data from the Central Credit Register show an upward trend in the number of credit transactions with non-financial corporations which has been driven by an increase in both loan applications and their approval rates. This evidence is moreover consistent with the results of the survey on the access to finance of firms conducted by the ECB on the basis of a sample of European companies. In particular, since the end of 2013, Spanish SMEs have reported an improvement in their perception of access to credit, a signal which is consistent with that from the Bank Lending Survey. 4. Policy considerations on SME’s financing  Allow me to say now a few words on policy considerations regarding the specific case of small firms’ financing. Undoubtedly, the crisis has been a painful reminder for us that the access of SMEs to finance may deteriorate suddenly and sharply in periods of high uncertainty.

The Bank’s interest thus has a stimulating effect on the economy, and note that real interest rates at present are lower than they have been since the spring of 1996. It should  BIS Review 12/2003  1  also be borne in mind that changes in interest rates only affect demand and inflation with a considerable time lag, so that the full effect of interest rate cuts in recent months will not be felt for some time yet. ISK exchange rate No one doubts the importance of the ISK exchange rate for the Icelandic economy. The exchange rate has enormous impact on price levels and the performance of the export and competitive sectors. On the other hand, people must realise that the Central Bank has only limited long-term effect on the exchange rate. Many aspects of the economy affect the exchange rate. These include, for instance, foreign trade, foreign investments in Iceland and investment by Icelanders abroad, not to forget expectations of future economic developments. There is little doubt that expectations concerning power-intensive industry developments have influenced the exchange rate in recent months. Interest rates certainly affect the exchange rate, but experience both in Iceland and elsewhere shows that this effect eventually disappears, as long as monetary policy aims at maintaining long-term inflation comparable to that of the country’s trading partners. At the same time, intervention by central banks can have a temporary impact.
Here I want to note that the payment system, which is one of the Central Bank’s responsibilities entrusted it by Law, has operated adequately. Going back to the description of the macroeconomic scenario and associated risks, in the world economy the recent behavior of economic indicators, especially in developed countries, could be signaling a more protracted weakening of growth there. This scenario must be carefully evaluated, because other temporary factors related with the disruptive effects of the Japanese earthquake and the oil price hike may have played a role in recent developments. Should this risk of further weakening of developed countries materialize, the difference of the pace of growth with emerging economies would widen. This would exacerbate the interest rate differentials around the world, increasing capital flows toward emerging markets and aggravating forex tensions, obstructing macroeconomic policy making. Add to this that the risks in some European economies have intensified substantially these days and so far there is no defined solution, which has worsened the tensions in financial markets. Moreover, global imbalances are still unresolved, and it is unclear how the major adjustments needed for the fiscal consolidation of part of Europe and the United States will proceed. And it becomes more uncertain when considering that they must take place in an environment of lagging private demand and a still complex financial situation in banks, with large funding needs, exposure to public debt and a significant interconnection within Europe.

If we have faith in the operation of the market economy, the answer to the question whether we should worry is "No, we shouldn't ". What we are witnessing is no more than the inexorable playout of the process of comparative advantage - perhaps one of the most proven laws of economics. Comparative advantage hinges on relative factor endowments and their productivity. Some of these characteristics are, in large measure, static. Thus, for example, relative to other locations Hong Kong has an abundance of deep water but a dearth of flat land. This, very obviously, yields us a strength in port facilities over agriculture. Other characteristics evolve dynamically, such as our relatively well educated and qualified labour force; when this is set against the shortage of space, it is hardly surprising that Hong Kong should specialise more in providing high value-added services than in labour-intensive or space-hungry manufacturing. As regards absolute cost levels, it is the high value added by members of the workforce in particular sectors which generates and justifies their high pay. The fact that Hong Kong appears to be, overall, a rather expensive place, relative to the majority of neighbouring economies, is a consequence and symptom of its success. As anyone can see by just looking around, this doesn't mean that we can no longer win any business. But we can only afford to pay ourselves what we are worth.
Monetary policy is really conducted whenever a central bank releases information that affects markets' expectations about the future path of short-term interest rates and about the expected effects of that path on the economy. Monetary policy could therefore be defined as the process of managing expectations about the future path of the monetary policy instrument and the probable effects of that path on the economy. In this context, transparency is a crucial element of a successful monetary policy strategy. 3 If a central bank wants to implement its monetary policy strategy efficiently, it should communicate its intentions and expectations to financial markets and to the public as clearly as possible. In other words, based on its assessment of the available data, it should lay out the likely direction of the monetary policy path  3  See for example Blinder et al. (2001) for an in-depth overview of the benefits of transparency in central banking. BIS Review 30/2006  3  as well as the expected economic effects of that path. Central bank transparency then allows markets to better anticipate the future path of short-term rates, the effect of this path on other financial market prices and ultimately the impact on the real economy. The monetary policy transmission process is thus rendered more efficient. Transparency has a second advantage: It reduces uncertainty and may therefore lead to lower volatility in various financial markets.

However, there may be projects with a lifetime of days or certainly months and weeks, such that lowering the frequency of settlement points to, say, annually would clearly create an artificial and harmful annual economic cycle and affect price stability. Second, increasing the frequency of points in time when banks need to settle, say to hourly, would increase liquidity management costs of banks considerably. Because this is not needed from a monetary policy perspective, this would mean a waste of economic resources. Finally, central banks probably want to control the ability of banks over time to settle their accounts, and also banks are probably more comfortable to see that other banks settle their accounts with the central bank on a regular basis, as proof of their soundness. To sum up, the daily cut-off separating free central bank credit and credit against a monetary policy-related interest rate is a reasonable convention, reflecting monetary policy transmission mechanism issues, convenience of banks’ liquidity management, and credit risk management considerations. It allows central banks to safeguard price stability, while at the same time ensuring the smooth functioning of the payment system. Turning to collateralisation, it is important to note that in the past, central banks often set ceilings for intraday and overnight credit to banks. In contrast, today, many central banks, including the Eurosystem, tend to provide unlimited access to both types of credit, but with the need to provide eligible collateral.
In the worst case, falls on the stock exchange that correct overvaluations can lead to financial instability, if share prices have been driven by pledged shares and if the market participants are in some cases unable to pay back their loans. This can result in panic sales, exaggerated falls in prices and credit institutes facing difficulties as a result of exposure to households and institutions that have become insolvent. This result risks leading to large fluctuations in the real economy. Critics of the Federal Reserve in the USA claim that when Alan Greenspan coined the phrase "irrational exuberance" in 1996, it was clear that prices on the stock exchange had risen too much and that this development should have been counteracted. Nothing was done and the rise in share prices continued until March 2000. Since then the stock exchanges have fallen, Nasdaq by 70 per cent, and the fall on the stock exchange risks pulling the USA down into a recession that could have been avoided. However, comes the objection; is it really possible to realise when a stock exchange has risen too much? The answer is that prices on the stock exchange must have some relation to the underlying development of productivity in trade and industry, to company profits and to the market's pricing of risks. Of course, it is not possible to determine precisely when the stock market has risen too much or when it is undervalued. However, it should not be too difficult to detect obvious deviations.

This is partly because these can cause instability in both the real economy and prices when the bubble bursts and partly because the stability of the banking system could be threatened. Measures to avoid financial imbalances being built up are thus motivated on the basis of both of the Riksbank's objectives; to maintain price stability and to promote a safe and efficient payment system. However, the question is how effective the interest rate is as a weapon – perhaps other means can be utilised. Examples of such measures are monitoring the financial institutions and making capital adequacy requirements of them. The analyses made by the Riksbank in its Financial Stability Report are also aimed at drawing the attention of the banks and other authorities to any problems and they thus play a role in this context. BIS Review 39/2001  3  How great are the problems created by the imbalances in the USA? Is there a risk that the imbalances in the American economy are so great that the process of adaptation back towards a balance will dramatically intensify and prolong the economic slowdown? It can be noted that none of the ten major economic analysts of the American economy assesses that the USA will suffer a recession during the next few years. Firstly, it is probable that the growth potential that can be created by developments in technology is far from exhausted. There should thus be good reason for at least some of the optimism that has comprised a basis for earlier developments.
Both this year and next, growth will be considerably slower than we predicted only a short time ago. We expect the economy to go into virtual stagnation in the second half of 2001. Overall, the economy will presumably grow by about 1.5% in 2001. In line with the development in the major economic blocs, notably exports and capital spending have shrunk drastically, putting a major break on economic growth. Although consumer confidence has been dented, consumption has so far turned out to be a cornerstone of growth. The decline in construction investment is also clearly more moderate than the fall in capital spending. We expect the economy to follow a path of muted growth and to perform below its potential until the middle of next year. Only the second half of 2002 should see the economy expanding in line with the development abroad. We project average growth of approximately 1.0% for 2002. Unemployment is likely to climb in the months ahead. We consider the current interest rate level and the existing monetary conditions to be adequate to enable the economy to return to sustainable, non-inflationary growth. Our forecasts, however, are fraught with uncertainties. In the aftermath of the terror attacks in the United States, these uncertainties are now particularly substantial. Investment and consumption depend on whether market participants have confidence in the quality and stability of the basic conditions.

The introduction of euro notes and coins will have additional positive effects on the economic development in Europe, as it will be easier to compare prices and confidence in the new currency will be strengthened. Moreover, the euro is to be regarded positively not only with regard to the Swiss economy but also Swiss monetary policy. The Swiss export sector will profit from lower transaction costs, and currency devaluations - as previously implemented by some European countries in order to improve their competitiveness - will be a thing of the past. Swiss monetary policy will benefit from the fact that a large economic bloc now exists in Europe which pursues similar goals in terms of monetary policy. All in all, exchange rate fluctuations between Switzerland and the EMU countries should thus remain below the levels seen before the launch of the euro. Furthermore, the markets will realise in due course that there is no reason why the Swiss franc, with regard to the role as a safe haven currency, should be assessed differently than the euro. This realisation should reduce the risk of sharp appreciations. As a result of the introduction of euro notes and coins, the euro will increasingly be used as a means of payment in the tourism sector and the hotel and restaurant industry as well as in foreign trade, to some degree simply as a substitute for the D-mark.
In Norges Bank’s assessment, the outlook for the internationally exposed sector is brighter today than a year ago because the rise in costs has slowed markedly. As mentioned earlier, the decrease in wage growth has been of great importance in enabling us to reduce the key rate towards an international level. We expect inflation to pick up in the first half of 2004. Output and employment will probably grow somewhat more than trend. Again, thank you for giving me the opportunity to deliver this statement. 6  BIS Review 53/2003

Output Gap estimates Moving 4-quarter average, per cent 4  4  2  2 W-H  0  0  -2  -2  -4  -4 PF  -6  -6 UC  -8 1981  -8 1983  1985  1987  1989  1991  1993  1995  1997  1999  Source: The Riksbank  BIS Review 111/1999  8  Figure 4. Money market agents’ inflation expectations Per cent  3  3  Feb’96 May’99*  Feb’97  Sept.’99  2  2 Aug.’99 April ’99  Feb.’98  1  CPI  1  Nov.’98*  Mar.’99  0  0  -1  -1  1996  1997  1998  1999  2000  2001  2002  2003  2004  * From Statistics Sweden (otherwise Prospera) Sources: Prospera Reserarch AB and Statistics Sweden  Figure 5. UNDIX with Uncertainty Interval Percentage 12-month changes  5  5  4  4  3  3  2  2  1  1  0  0  -1 1995  -1 1996  1997  1998  1999  2000  2001  Sources: Statistics Sweden and The Riksbank  9  BIS Review 111/1999