samchain/econo-pairs-v1 huggingface dataset:
In regard to inflation, after a period in which inflation was below the levels the Fed judges to be most consistent with its statutory objectives, on a year-over-year basis, headline CPI (consumer price index) has increased more than 3 percent, which is somewhat above this desired level. The rise in commodity prices over the past year probably will push up headline  BIS central bankers’ speeches  3  inflation further in the next few months. It is noteworthy, however, that even with the sharp rise in oil and food prices over the past year (and notwithstanding the more recent drops), there has been limited pass-through into the prices of other goods and services. In fact, most measures of underlying inflation trends – such as core inflation (which excludes volatile food and energy prices) – remain below levels consistent with our mandate for price stability. Going forward, futures markets do not signal that investors expect rapid ongoing increases in commodity prices from current levels. Provided these prices stabilize (or indeed retreat further), I would expect headline inflation to move back to a more mandate-consistent rate. While this process plays out, however, it is critical that we ensure that inflation expectations do not become unmoored. It is much harder to keep inflation in check if people begin to raise their expectations of inflation. At this point, measures of inflation expectations overall remain stable. Economists at the New York Fed have examined inflation expectations using a unique survey that we sponsor.

However, they have reached an affluent status today through their various actions and initiatives. Obviously therefore, as in the case of any successful outcome, we could learn from those case  BIS Review 83/2006  1  studies. In fact, we in Sri Lanka felt that we should do so professionally and objectively. We began by examining the economic and political environments in which many of the highly successful countries operated. We studied the external and internal conditions that prevailed during the early days of growth of those countries. We also attempted to analyze the factors which enabled those countries to break the shackles and reach a stable platform from where they launched themselves to the next level of development. In that exercise, one of our key findings was that, in the journey to reach developed and industrialized country status, many of those countries had immense space and flexibility to grow in an uninhibited environment. Further, when the present day rich countries were growing, (from per capita income of US dollars 1,000 to US dollars 10,000), they faced very few obstacles in the movement of capital and labour. They did not have to be overly concerned about human or labour rights. They were free to impose trade quotas and grant very visible and obvious subsidies to their local entrepreneurs and farmers. They were not subjected to stringent global standards for copyrights. They were not desperately worried about safeguarding the ozone layer or the environment.
We have encouraged banks to become more transparent in providing the public with more timely and transparent information on bank management, especially information relating to non-performing loans, lending to related parties, and violation of the Bank of Thailand’s regulations as well as the fines incurred. In addition, we have encouraged banks to give greater importance to and abide by the best principles of corporate governance by limiting the number of outside directorships which the bank directors or bank senior executives may hold to not more than three, as well as not being an authorised director. Before the announcement made on this issue by the Bank of Thailand on 17 September 1999, there were a total of 82 bank directors holding more than 3 outside directorships. The number has now reduced to 22, and should be finally phased out. To reduce the risk of economic bubbles and the consequence to financial institutions, the Bank of Thailand plans to reduce the reliance of the private sector on bank credits, from a share of 77 % of the total sources of funds, presently, to 55 % in the next 10 years. This requires that Thailand must have strong markets for debt instruments and equities. Thus, the development of the bond market is among the major tasks the Bank of Thailand has undertaken during the year, as it will provide the infrastructure for the conduct of monetary policy through open market operation, as well as enhancing the country’s long-term economic development.

However, my view is that, in certain situations, it can be appropriate to attempt to counteract financial imbalances with a limited tightening of monetary policy. A tightening of monetary policy would be likely to have a restraining effect on credit growth and asset prices. Even if monetary policy does not succeed in entirely preventing financial imbalances from arising, it can limit their extent. The expected macroeconomic consequences following the correction of imbalances should then be less serious, particularly if the risk of a serious financial crisis is reduced. The clear communication of the reasons for increased interest rates should raise public awareness of the risks of financial imbalances, which, in my opinion, may have a stabilising effect. In this example, monetary policy contributes to more stable inflation and resource utilisation over the slightly longer term, which should be balanced against the short-term costs of conducting a somewhat tighter monetary policy. This form of monetary policy thus does not entail a deviation from flexible inflation targeting, that is to say a monetary policy aimed at stabilising both inflation and the real development. Neither is it an issue of turning house prices or any other asset price into a target variable for monetary policy. On the contrary, it is an illustration of flexible inflation targeting in which the destabilising effect of financial imbalances on inflation and resource utilisation are incorporated into the monetary policy assessment.
This shows the importance of international coordination also when it comes to crisis resolution. Thank you for your attention. BIS Review 113/2010  9

Fraziali Ismail: Climate action in the Malaysian financial sector Keynote address by Mr Fraziali Ismail, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the International Greentech & Eco Products Exhibition & Conference Malaysia, virtual, 20 October 2020. * * * To date, there is a genuine buzz in global climate action. The Paris Agreement, with 197 signatories, provides a pathway for nations to step up their climate mitigation and adaptation efforts. The UK for example, is committed to a ground-breaking target of net zero carbon emissions by 2050. There is zero budget natural farming in Andhra Pradesh in India, the great pivot to natural farming in China, the wide spread adoption of electric buses in public transport urban fleets all over the world, including Malaysia. Seventy two central banks and supervisors around the world, including Malaysia have come together via the Central Banks and Supervisors Network for Greening the Financial System (NGFS) to pursue climate action. This coalition of the willing has initiated several initiatives such as identification of best practices on supervisory and macrofinancial dimensions of climate-related risks. The issue is clearly now being mainstreamed in discussions at international and state levels, among regulatory agencies, at board levels across industries, in schools, and the list goes on. But while the hills are covered, there are mountains ahead. Green financing is still lacking; green investments remain under funded.
Such a competitive and pro-enterprise environment will bring out the areas in which we have a competitive advantage. We cannot predict in advance which activities will take off. But when some activities succeed we can promote and encourage their development, always pushing in the direction of market forces, and not against them. Conclusion MAS has built a reputation for credibility, prudence and competence over the last 30 years. But major challenges lie ahead. We have to manage exchange rate policy in an increasingly volatile market, build a sound and responsive regulatory environment that allows the financial industry to thrive, and promote Singapore as a financial centre even in the midst of adverse external conditions. It is always easy to shelter from change, to reject anything new and to adopt a risk adverse approach. But if the sole objective of a captain is to protect his ship, then his vessel would never leave port. Over the last few years, we have altered our course – opening up to, rather than sheltering from, the winds of change. 6  BIS Review 67/2001  To navigate in this dynamic environment, MAS will have to continue to strengthen its own capabilities. The pace of change is intense, and the demands on MAS’ resources, expertise and judgement will only grow. We must broaden our contacts and consultation with market participants and fellow central bankers and regulators. This is the way to keep abreast of the latest developments in the financial industry, and evolving best practices in central banking and financial supervision.

We must groom a corps of competent and committed economists, supervisors, and investment managers within MAS. But this will not be sufficient. We also have to reinforce our team with talent from industry and abroad. We already have foreign and mid-career professionals among our ranks, but we must attract more such persons. Only by building a truly world-class MAS team, will we succeed in our mission – to promote macro-economic stability, and a sound and progressive financial centre. BIS Review 67/2001  7
If there's one thing the pandemic taught us, it's the need for adaptability in overcoming challenges. More so in today's workforce, with the multifaceted issues arising from technology, sustainability, demographics and other structural changes. Consequently, talent planning and management must move in tandem with these changes. What do I mean by that? Several priorities are fundamental to pave the way for a better, more productive and rewarding future of work: First, leveraging analytics to forecast talent needs and to better measure workforce performance and productivity. By regularly analysing and monitoring employee performance and engagement metrics, organisations can determine the strategic talent acquisition, development and management decisions required. This will prepare the workforce for the challenges they will face going into the future. Second, developing a fast, agile and coherent workforce investment strategy. Several key elements include identifying workers who are being displaced from their roles, establishing appropriate internal committees to manage the displacement, funding reskilling and upskilling, motivating employee engagement in this process, and tracking the long-term success of such transitions. This should also account for specific needs by segments such as older workers, mothers returning to the workforce and contract employees. Third, introducing agile HR and organisational policies to enhance workforce flexibility and productivity. Given the recent success of remote working, many organisations are looking to capitalise on productivity and efficiency gains by establishing an effective hybrid working model that supports both office and remote working.

Øystein Olsen: Economic perspectives Annual address by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), to the Supervisory Council of Norges Bank and invited guests, Oslo, 14 February 2014. *  *  *  Accompanying charts can be found at the end of the speech. Introduction This year is the bicentenary of the signing of the Constitution of Norway. Two hundred years ago, Norway was a poor country on the periphery of a Europe that was then the world’s economic centre of gravity. Thomas Robert Malthus, one of the foremost experts of his time in the field of demography, toured Norway in 1799. In his travel diary, Malthus describes an agricultural society where most people lived a simple life subsisting on a diet of whatever they were able to harvest. Wealthy Norwegians, on the other hand, complained about how expensive it was to maintain a respectable lifestyle when everything had to be imported.1 The Napoleonic wars brought harsh economic realities. Blockades, epidemics and crop failures took their toll on the population. Large parts of southern Norway experienced severe famine in 1809 and again in 1813. Population numbers fell. The timber trade and shipping industry showed a marked contraction. Chart 1: Inflation in Norway King Fredrik VI financed public expenditure by printing money. Combined with goods shortages, the result was hyperinflation and failing confidence in the monetary system.
Also worth mentioning is Caruana, who pointed out in 2005 that, while a highly-developed decision-making framework was in place for pursuing monetary policy, financial stability was less deeply looked into. Let me add that, back in 2006, the key message of my dissertation at the University of Piteşti was that financial stability is, in turn, instrumental to monetary policy effectiveness and hence to safeguarding price stability. At the end of the day, it was the global crisis that invalidated once and for all certain elements of mainstream economics. Nothing new, as a matter of fact: economic thought has always been influenced and spurred by major crises. 8  BIS central bankers’ speeches  It became readily visible that threats to financial stability do not necessarily go away once inflation is brought down to a low level – they merely change their nature. And this has been shown at a global level by the “detail” (after all, “the devil is in the details”, as Professor John Bonin kindly reminded us from the very title of the presentation he delivered earlier) that the financial crisis broke out in an economic environment with relatively low inflation rates. In other words, the price stability that set in during the Great Moderation could not prevent the start of the Great Recession. Furthermore, the “mop up after” strategy in the aftermath of the financial crisis proved much costlier than “leaning against the wind” would have been.

Naturally, macroeconomic stability was and still is a necessary condition for the framework to operate properly. The crisis has led to a reexamination of some issues we thought were settled and to the emergence of some new questions. Even though Brazil was not at the epicenter of the crisis, we were affected by the crisis itself and by the policies that were put in place in its wake. Furthermore, we have been actively participating in the international central banking debate in order to offer our views and to learn from the experience of others. *  *  *  In my opening remarks, I will focus on three topics that have provoked particularly intense debate and that I believe will shape central banking for some time to come. In each of these topics, the global financial crisis prompted a rethinking that is still underway, although some initial conclusions can already be drawn. First, maintaining financial stability was reemphasized as a core function of central banks. Central banks have always been concerned with financial stability, particularly through their lender-of-last-resort role. But in many jurisdictions, central banks progressively downgraded the importance of the financial stability goal in the post-war period. The supervision of banks was progressively split off from central banking, and a gap emerged in that, in some jurisdictions, nobody was tasked with looking at the vulnerabilities in the system as a whole.
As technological advances in payment systems are seldom used at their maximum capacity, the increase in their efficiency is a gradual, rather than spasmodic process. In order to better estimate the impact of technology-driven change on the velocity of money in circulation and thereby on monetary policy, central banks thus need to use data from a variety of sources In sum, payment systems are an essential precondition for the implementation of operational monetary policy and their degree of sophistication has a direct impact on the velocity of money circulation, thereby influencing monetary policy itself Turning to financial stability, there is a strong link between efficient payment systems and financial stability. Financial stability implies that the financial system is robust to systemic risk, i.e. the risk that problems in one financial institution lead to problems in other previously sound institutions. Financial stability allows the financial system to withstand shocks without giving way to cumulative processes which impair, first, the processing of payments in the economy, and second, the allocation of savings to investment opportunities. A robust and resilient market infrastructure is essential for financial stability The provision of credit to commercial banks led the central bank to establish a function to control the creditworthiness of the borrowers. This function eventually developed into “banking supervision”. A commercial bank can be the source of financial instability if it faces technical difficulties or if it fails to repay funding. This funding can come either from the regular operations of the central bank or from other depositors.

Wallison, P J (2008), “Fair Value Accounting: A Critique”, American Enterprise Institute for Pubic Policy Research. BIS Review 28/2010  13  Annex  14  BIS Review 28/2010  BIS Review 28/2010  15  16  BIS Review 28/2010
The huge increase in oil and food prices will itself have a dampening effect on consumers in those countries – as it will in the West. So we may well see the balance of supply and demand shift at some point. UK inflation outlook But the immediate prospect is for rising inflation. As the Governor explained in his open letter to the Chancellor, when the rise in energy prices passes through to consumers, CPI inflation is likely to rise sharply in the second half of the year, to above 4%. There is of course considerable uncertainty around this, and if energy and other import prices rise further, CPI inflation could well go even higher in the short term. That is bound to lead to a downward adjustment to real take-home pay. That cannot be avoided. Indeed, such an adjustment was seen in response to the rise in energy prices in 2004-06. Over that period, nominal wage  4  BIS Review 80/2008  growth was broadly stable, and there was a relatively smooth adjustment to real wages in response to the rise in energy prices. A key risk to the outlook is whether a similar, benign adjustment will occur in response to the latest price rises. With inflation having been above target for much of the past three years, and set to rise further in the near term, there is a risk that households and businesses may start to expect CPI inflation to be persistently above 2%.

The evolution of the Eurosystem’s monetary policy operations in response to the crisis featured all these activities. Our risk management framework has evolved accordingly, guided by our stable principles. First, the “gusty winds”: during the early stages of the financial crisis, we increased the amount of liquidity we provided to the banking system without tightening the risk control framework, despite the onset of stress in the system. In this respect, our risk management framework followed a through-the-cycle approach – thereby avoiding further distress to the banking system. It also stood in stark contrast to the more pro-cyclical nature of the commercial banking sector’s risk management approach – and was thus part of the central bank’s duty to lean against such potentially self-reinforcing winds. It was possible to avoid tightening the framework without exposing the Eurosystem to undue risks because the pre-crisis framework had been calibrated in a sufficiently prudent manner. In fact, the framework proved to be robust enough to protect the Eurosystem from losses resulting from counterparties defaulting, such as Lehman Brothers or the Icelandic banks – although the complexity of the collateral in some of these cases led to lengthy liquidation processes. This experience certainly merited a careful review of the collateral rules for complex securities and financial innovations. More broadly, it justified taking steps towards reducing the reliance on external credit ratings, in line with the G20 agenda.
On the one hand, the hit to capital could be larger if firms’ risk appetite remains subdued or if the debts accumulated during the crisis act as a drag on investment. For example, in the UK Office for Budget Responsibility’s (OBR) downside  scenario, scarring reduces output by as much as 6%. 20  Baldwin and Freeman (2020). 20  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  20  On the other hand, it is possible investment and the capital stock rebounds faster than in a typical recession – for example, if there is catch-up investment or if firms seize the opportunity created by the Covid crisis to improvement their digital estates and digital skills. This would reduce, but not eliminate, any scarring. The balance of these effects on investment is something I will discuss in a future lecture. (d) Fiscal Policy After the global financial crisis, the major tool of macro-economic demand management was monetary policy, which was loosened significantly in most countries. By contrast, fiscal policy in most countries was loosened only modestly and in some, including the UK, was tightened. This fiscal response added to the burden placed on monetary policy. The fiscal policy response to the Covid crisis has been very different. Although monetary policy has once again been loosened, fiscal policy has played the frontline role in stabilising the economy. Both the  fiscal/monetary mix, and the scale of the all-in supporting policy response, has as a result far exceeded that following the global financial crisis.

Companies should think carefully where they wish to position themselves in the long term and have a clear plan on how to get there. There might be companies that may aspire to grow and be major providers in their own lines of business. There might also be companies that want to position themselves as a complete solution providers or becoming principals with large agent networks. And then, there are companies that have been very successful as agents, building strong partnerships with their principals while keeping operating costs low. In fact, our engagements with the industry reveal that many agents are doing better than before in terms of business flows and profits. The regulatory framework in Malaysia is specifically tailored to accommodate all these options, supported by operating guidelines that is efficient and proportionate to risk. A company that takes on more risk and business responsibility must be prepared to meet the higher requirements that reflect the scope and levels of complexity of the business, including  2  BIS central bankers’ speeches  the kind of management team that needs to be in place, the board’s profile and level of engagement and their ability to provide strategic leadership to the company. Companies also need to consider changes to processes as well, as investments in critical systems is important to support operations over the long term. Most importantly, there must be a clear strategy of execution and an honest assessment of the company’s ability to implement such a plan.