samchain/econo-pairs-v1 huggingface dataset:
The problem is similar to the central banks' analyses of the output gap, which indicates whether there is an inflationary risk in the economy as a result of an excessively high level of activity or a risk of deflation. The output gap is calculated routinely by central banks around the world, and these calculations estimate the sizes that would be included in a calculation of over-valuation or under-valuation on the share markets. It can hardly be easier to calculate potential growth for the entire economy than the fundamental value of the stock market, according to critics of US monetary policy. It should be possible, at least in the case of major deviations from fundamental economic conditions, to detect imbalances on the asset markets, exaggerated valuations that could potentially give rise to monetary policy measures being necessary, even if the target for consumer prices is being followed fairly well. This is how the international discussion runs, caused by stock market developments, primarily those in the USA, with the current fears that the large downturn on the stock exchange will be followed by a deep recession. For a small, open economy like Sweden's, the possibility of affecting share prices through monetary policy restraint should be limited. The Swedish stock market is strongly correlated with that in the USA, partly because many of the companies listed on the Swedish stock exchange are multinational. In principle, however, there is good reason for taking action if we assess that large financial imbalances are being built up.

For instance, shareholding is more widespread among Swedish households and many of the major "Swedish" multinationals – in which Swedes have invested a substantial part of their shareholdings – are very dependent, directly or indirectly, on developments in the USA. Developments in the Swedish economy in recent years have shown many similarities to developments in the USA. Rapidly rising share prices, a strong GDP growth driven by both investment and consumption and an increase in indebtedness is a description that fits both the Swedish and American economies in recent years. However, the increase in economic activity began later in Sweden and has not really had the same speed as that in the USA. Moreover, the rise in Sweden was preceded by a period where adjustments following the crisis at the beginning of the 1990s had forced down investment and consumption considerably and where both the household and corporate sectors had reduced their level of indebtedness. Saving in both of these sectors was therefore at a high level and indebtedness fairly low when growth in the Swedish economy picked up. Now that economic activity is slowing down, the private sector's indebtedness is not particularly high, from a historical perspective. Furthermore, the lower interest rates will mean that interest expenditure comprises a much smaller burden for borrowers now than previously. Although the surplus in saving in the private sector has declined gradually in recent years, it only became a slight deficit towards the end of last year.
Such efforts, among others need to involve three basic aspects. This includes having the mechanism and vehicle to preserve short-term liquidity, to remove troubled assets from the balance sheets of financial institutions and to recapitalise Islamic financial institutions. In the case of Malaysia , this infrastructure has been put in place. The Central Bank has a range of Islamic financial instruments to manage liquidity in the financial system. This is supported by a well developed Islamic money market. In addition, the financial safety net framework in Malaysia encompasses the lender of last resort facility and a comprehensive deposit insurance system that provides coverage for both conventional and Islamic deposits. 4  BIS Review 145/2008  The Deposit Insurance Corporation has also been given sufficient statutory powers to ensure a prompt, effective and least cost resolution to safeguard the stability of the Islamic financial system. This entails among others, the regulatory powers and mandate to ensure expedient resolution of financial institutions in distress. Our supervisory oversight also subjects the Islamic financial institutions to periodical stress testing to assess whether the institutions would be able to cope in extreme conditions. Global ramifications of the crisis also calls for more concerted efforts at the international level to avert an escalation of the scale of a crisis. Central to this is to have coordinated initiatives, by having in place on-going assessments of any vulnerabilities in the Islamic financial system so as to avoid crisis.

A further similarity relates to the lack of capacity to manage the increased risks associated with the transformation of the financial sector. For Asia , the increased liberalisation was not accompanied by the development of the necessary domestic financial infrastructure and the capacity to manage the increased risks and vulnerabilities associated with the liberalisation. In the current crisis, financial innovation occurred at a pace that outstripped the ability to manage the associated risks with such innovations. There was excessive risk taking and a lack of transparency and disclosure in the financial transactions. The complex structured instruments and securitisation process resulted in multi-layered structuring of financial products which were not supported by enhancements to governance processes and the risk management infrastructures and practices. This resulted in an underestimation of the risks involved and the capital buffers that were necessary. The ensuing turmoil in the financial markets that followed was increasing illiquidity in the financial markets and the subsequent breakdown in the functioning of the markets. As this continued, it has translated into stress and insolvencies in the financial sector. In both crises, this precipitated a sudden pull back in bank lending. The ensuing credit crunch magnified further the damaging impact on the economy. In Asia, the economic contraction was severe in the range of minus 7% to 13%. In the current financial crisis, however, the spillover impact of the effects on the economy has yet to be fully felt.
3 See Alan S. Blinder, Economic Policy and the Great Stagflation, Academic Press, 1979 4 See Tim Mahedy and Adam Shapiro, What’s Down with Inflation? FRBSF Economic Letter 2017–35, November  27, 2017, and Andrea Tambalotti, Stefano Eusepi, and Bart Hobijn, CONDI: A Cost-of-Nominal-Distortions Index, American Economic Journal: Macroeconomics, 3(3): 53–91, July 2011. 5 See James H. Stock and Mark W. Watson, Slack and Cyclically Sensitive Inflation, Working Paper. 6 See Ulrike Malmendier and Stefan Nagel, Learning from Inflation Experiences, The Quarterly Journal of  Economics, Volume 131, Issue 1, 1 February 2016, Pages 53–87. 7 See John C. Williams, Monetary Policy in a Low R-star World, Federal Reserve Bank of San Francisco Economic  Letter 2016–23, August 15, 2016. 8 See John C. Williams, Preparing for the Next Storm: Reassessing Frameworks and Strategies in a Low R-star  World, Federal Reserve Bank of San Francisco Economic Letter 2017–13, May 8, 2017. 9 See Thomas Mertens and John C. Williams, Monetary Policy Frameworks and the Effective Lower Bound on  Interest Rates, Federal Reserve Bank of New York Staff Reports 877, Revised January 2019. 4/4  BIS central bankers' speeches

Our domestic Islamic financial system is one of the most developed, with its diversity of players and financial products and services in Islamic banking, takaful and the Islamic capital market. Today, we are witnessing the establishment of another dedicated Islamic banking subsidiary that will contribute towards further strengthening the Islamic financial institutional infrastructure in Malaysia the launch of Affin Islamic Bank Berhad as an Islamic banking subsidiary of Affin Bank Berhad. With the domestic Islamic financial infrastructure in place, the emphasis is now to become more internationally integrated with the international Islamic financial system, thus increasing our economic and financial linkages with other parts of the world. Our efforts are to position Malaysia as an international Islamic financial centre and thus facilitate this international integration process. In this regard, the establishment of an Islamic subsidiary also increases the opportunity for entering into strategic partnerships with foreign interests, thereby increasing the potential for greater interface with more extensive markets beyond our domestic borders. On the domestic front, while tremendous progress has been achieved, much more needs to be done. The Islamic financial industry needs to allocate more resources toward investment in research and development to create more innovative products. Consumer awareness and consumer education also needs to be enhanced to support the growth of the Islamic financial industry.
Filled with pride for the economic development of our country over the past decade, we must now concentrate more on the future. Estonia’s goal is not only the sustainable economic growth target of 5.5-6 per cent per annum but also the preparedness to join the European Union and to make maximum use of the opening opportunities. What should we then focus on especially? B.1  Challenges facing Estonian economy on its way to the European Union - overall economic policy stance  Estonian economy is already strongly integrated into the European economic area. From the perspective of the central bank I would like to refer to the clear convergence of the interest rate fluctuations and inflation cycles in Estonia and the European Union. The share of current and future EU member states in Estonia’s export is about 81%. In 1994-2001 Estonia’s export to the European Union increased on the average 25% per annum. Our exports to the European Union have steadily grown quicker than imports from the European Union. It means that we have been steadily increasing our market share in the European Union - although it is small. The export structure also characterises our competitiveness - exported goods reflect changes that have taken place in the economy. Our traditional export items are timber, textile and foodstuffs, but also, for example, parts and components of electric motors, cables, mobile phones, antennae and the like.

Ajith Nivard Cabraal: Macroeconomic background and outlook for 2007 Presentation by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the Sri Lanka Development Forum – 2007, Colombo, 29-30 January 2007. *  *  *  Your Excellency President Mahinda Rajapaksa, President of Sri Lanka, Hon Chairman, Hon Ministers, Your Excellencies, Development Partners and friends, In the next few minutes, I will endeavour to give you a quick update of Sri Lanka’s macroeconomic achievements in 2006 and also share with you, some thoughts on the outlook for 2007. As we now know, the Sri Lankan economy recorded a growth of 7.8 per cent in the first three quarters of 2006 and according to current available data, it is very likely that the economic growth in 2006 would be well over 7 per cent. Unemployment recorded its lowest level of 6.3% during the year. Our international reserves increased by nearly 5 per cent. Exports, imports and FDI grew significantly. Many major infrastructure development projects commenced. A large number of village development projects were implemented. Migrant worker remittances reached the highest ever level of over US dollar 2.3 billion. These achievements by any standards, would have been considered significant. But, in the light of several major challenges faced by the country during 2006, these achievements could very well be even considered quite remarkable.
On the fiscal front, the consolidation process has paused somewhat and, according to the Spring-2016 European Commission’s forecasts “fiscal policy is expected to be slightly supportive to growth this year”. There are also important political challenges ahead. The management of the flow of refugees, the referendum that the United Kingdom will hold next month on its EU membership, and, more recently, the negotiations with the United States to sign the Transatlantic Trade and Investment Partnership (TTIP) are leading sometimes to heated debates on the institutional framework of the EU. In connection with these, and other, challenges, I would like to recall the roadmap drawn up in the Five Presidents’ Report published last year, which delineates steps for further economic integration within the euro area through both real convergence and some mutualisation of risks. Making progress along the lines suggested in the Five President’s Report would not only improve the resilience of the euro area to future shocks, but would help building up the necessary confidence to create employment and lifting growth potential. Monetary policy I would like now to make a few comments on the main features of our monetary policy scenario. Since the beginning of the crisis weak domestic demand in the euro area has pushed down core inflation well below the medium-term objective. The subsequent fall in oil prices has 2  BIS central bankers’ speeches  aggravated this situation and core prices have grown in the last years at very moderate rates, around 1 % or less.

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31.07.2017  The European economy and monetary policy Inauguration of La Granda courses Luis M. Linde Governor  Mr Chairman of the La Granda courses, Mr Rector of the University of Oviedo, Mr Mayor of Gozón, Mr Secretary of the La Granda Courses, Authorities, dear colleagues: Let me begin by thanking Professor Velarde for his invitation to me to participate in the inauguration of the thirty-ninth edition of the now-classic La Granda courses. But first I should like to congratulate Professor Velarde on the Menéndez Pelayo International Prize he has recently received and which is just one in a long list of accolades. Juan Velarde is much more than an eminent academic. He is a true humanist whose work, anchored in different areas of the economy, has always included historical and social concerns where his deep-seated and – I would say – benign liberalism prevails. Professor, my warmest congratulations on your Menéndez Pelayo prize. The European economic recovery Moving on to the subject of my address today, I should like to share with you some thoughts on the euro area economy and monetary policy. I shall begin by reviewing the key features of the current expansionary phase in the European economies and the fundamental role that monetary policy has played in providing for its take-off. I shall then refer to the main challenges over the course of these difficult years for the European economy and to the need to complete the institutional architecture of the monetary union.

In the euro area economies, the high unemployment levels and the need to reduce significant debt ratios curbed the expansion of demand, while the fragility of banking systems hampered the transmission of monetary policy measures to the real economy. These factors obliged the ECB to take a different tack and turn to so-called nonconventional measures. Firstly, the interest rates on ordinary monetary policy operations were successively cut, placing the deposit facility rate at a negative level of -0.4%, which currently remains in place. Secondly, the ECB introduced a new long-term financing facility for the banking system, which was linked to the granting of loans to households and firms. Thirdly, in 2015, the ECB took the historic step of launching a quantitative easing programme by means of the large-scale purchase of public and private assets. Currently, purchases are being made at a monthly pace of € billion, and this is expected to continue at least until next December, whereby at the end of the current year the scale of asset purchases will be drawing close to 22% of euro area GDP. Lastly, communication has become a most important instrument for influencing agents’ expectations and heightening the effectiveness of measures. Specifically, the ECB has incorporated forward guidance on interest rates and the purchase programme into its communication.
In recent years, in the developed countries, but also in a number of developing countries, the financial regulators have established and implemented various initiatives (innovation facilitators) aimed at promoting the use of financial innovation in different segments of the financial system. Given the importance of the issue and responding to the rising challenges, our central bank has recently established an Innovation Hub – a small expert group of the central bank, dedicated to closely monitoring and supporting fintech developments. The scope of work of the Hub is directly related to the mandate of modern central banks in the field of maintaining financial stability and monitoring systemic risks. This body will support National Bank’s efforts to deepen the financial inclusion, contribute to consumer protection and to providing operational and legal certainty in the financial markets infrastructure. We strongly believe that the Hub will be a central point of contact with the industry, including the fintech firms, and will enable building internal capacities for adequate implementation of the new technologies and monitoring of the associated risks, as well as serve as a platform for sharing information and discussing best practices. Finally, the Innovation Hub will also bring the prospect of using digitalization for supervisory purposes, as a complement to our current supervisory methods, principles, and judgement. Suptech is becoming synonym for exploring new technologies, especially in the area of supervisory data collection and analysis.

As Andrea Enria, the Chair of the ECB Supervisory Board, recently stated when addressing how digitalization might change banking, “supervisors are technology-neutral, but not risk-neutral”.1 As banks become more digital, the IT risks, including cybercrime risks, become increasingly relevant. In addition, as the financial system adapts to the new technological trends, concerns arise regarding issues such as data privacy, potential threats to the financial integrity, clarity, and consistency of the regulatory landscape and the potential for regulatory arbitrage, adequacy of the existing financial safety nets, including the central banks’ role as a lender-of-lastresort. Furthermore, the risk of procyclicality in light of the new lending platforms with little human interaction is also accentuated. Asymmetric information and lower transparency may result in underestimation of risks by new players, which in turn may put pressure on the profitability of 1/3  BIS central bankers' speeches  traditional players (banks) and increase their risk appetite, as well. And one of the lessons from the recent crisis is that increased access to finance yields short-term benefits, but it can also lead to financial instability overtime, especially if the level of financial literacy is lagging behind. When balancing between opportunities and risks, policymakers are faced with a rising challenge to be nimble, innovative, and cooperative in enabling financial innovation, without neglecting their main responsibility for preserving financial stability and dealing with systemic policy issues.
Next year, the Swiss electorate will probably be asked to vote on the "COSA initiative", which proposes allocating the first billion Swiss francs of our current profit to the cantons, with the balance going to the state Old Age and Survivors' Insurance scheme (AHV/AVS). The National Bank has consistently taken the line of not intervening in domestic political debates unless the fulfilment of its constitutional mandate is in jeopardy. Two years ago, I mentioned to you that the COSA initiative threatened to undermine our autonomy. Linking the National Bank's profits to the financing of a key element in our country's social security system would create a mechanism that would force the SNB to manage its reserves for the purpose of generating the highest possible returns rather than for performing its monetary mandate. This would weaken our international credibility and hence also the credibility of our policies. No other central bank of an industrialised country is faced with a similar situation. All of these banks deliver their profits to the state, and the SNB is no exception. Our main argument against the COSA initiative, however, is that it rests on an illusion – namely, that a central bank is able to transfer profits of over CHF 1 billion every year. Once this illusion has been dispelled, it will become clear that the initiative makes no sense, as nothing would remain for the state pension scheme. And, as we have often stated in the past, the current disposable profit of CHF 2.5 billion Swiss cannot be sustained.

As you know, the Governing Board adopted the expert group's conclusions and indicated to the Federal Council that, based on the profit figure following revaluation, an amount corresponding to half the gold holdings could be earmarked for purposes other than monetary policy. The possible uses for the sales proceeds have been the subject of much political debate. None of the proposed solutions have succeeded in attracting a consensus among the population or in the Federal Parliament. On 16 December, the parliamentary debate was concluded without an agreement being reached. Thus, a sum of CHF 21.1 billion, corresponding to the proceeds of the gold sales, has been included in the usual profit distribution procedure. Some people fear that, following this transfer, the National Bank will no longer have sufficient currency reserves. I have a word of reassurance for them. This issue has been examined in depth and has been discussed by our Bank Council. Our currency reserves total CHF 60 billion – an amount which may be considered appropriate by comparison with other industrialised countries. BIS Review 30/2005  3  But nor are these reserves excessive. Furthermore, it is important that the currency reserves evolve over time, in tandem with the size of our economy. This is why, in accordance with Article 99 of the Constitution and Article 30 of the National Bank Act, the SNB has adopted a provisioning policy that provides for gradual growth in its currency reserves.