samchain/econo-pairs-v1 huggingface dataset:
A monetary policy stance that is aimed at stabilising inflation will thus also contribute to stabilising aggregate output and employment. The impact of monetary policy occurs with considerable and variable lags. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Two years is thus a reasonable time horizon for achieving the inflation target. It is nevertheless conceivable that in a situation with a high rate of inflation and weak economic developments, Norges Bank may decide to apply a somewhat longer time horizon than two years to reach the target of 2½ per cent. Nor do we need to be in any hurry to raise the level of inflation in a situation where inflation is very low, while economic activity is high. By influencing inflation over time, monetary policy will not in itself cause unnecessary disturbances to the economy. A precondition for applying a longer time horizon is that financial market participants have strong confidence in low and stable inflation over time, and that wage formation has a nominal anchor. Frequent and marked interest rate changes can keep inflation under tight control, but will lead to wide variations in output and employment. This can be called a strict inflation target. Theoretically, we could also have chosen to stabilise output without taking into account variability in inflation. This can be called a strict output target. In Norway, as in a many other countries, we have chosen an intermediate solution.

The up-to-now data indicate that credit to the economy has increased by about 3-4 percentage points of GDP, giving clear signals for a promissory excitement of the economy financing in the future. Till August 2005, compared to last year’s end, the system assets increased further by 14.5 per cent, while there was augmentation of banking products as well as extension of their network. Compared to yearend of 2004, the banking system has attained an increasing profit level, at ALL 4.65 per cent. Return on equity (ROE) has resulted 24.8 per cent, while credit quality expressed as a ratio between (net) bad credit and total credit portfolio is only 2.39 per cent, from 4.2 per cent it was at the end of 2004. However, there is no room to be excited by figure euphoria, because credits are still new and their quality will have to carefully be examined. Another significant development of the banking system relates to the client’s service, which through the electronic terminals is being obviously accompanied by the increased number of electronic cards in circulation. Banks already provide debit and credit cards in cooperation with international companies such as Visa Card, MasterCard and Diners Club. Six banks provide the ATM service and ATMs  1/4  reached the number of 180 by the end of August 2005, while points of sale reached the number of 391. Of course, an important aspect remains also the further expansion and consolidation of the banking system.
As the representative of a central bank, I must add that it is interesting to at least toy with the idea of how a global currency and global monetary policy would look. But for the time being this will probably remain no more than an intellectually stimulating vision. At global level, integration needs to go much further, and the economies become more synchronised, if the long-term gains of fixed exchange-rate cooperation are to outweigh the risks. In the long term, it is not inconceivable that a trend will arise towards large regional currency blocs with single currencies, but with flexibility between them. Within these blocs, it will be possible to reap the advantages of integration fully, while the risks will be limited by increasingly similar conditions in the countries taking part in the common currency. Competition between these areas regarding which has the dominant reserve currency may increase gradually. The dollar’s unique position will weaken, just as we are seeing today with a number of Asian central banks planning to increase their assets in euro and reduce those in dollars. Let us hope that there will also be cooperation between the regions, so as to give the world greater stability, development and continued integration. BIS Review 47/2003  5

[4] At the same time, we know that capital releases implemented by authorities, such as Countercyclical Capital Buffers (CCyB) cuts, did support lending, even for firms that were not close to breaching their nonreleasable buffers. [5] What does this evidence imply for policy? First, let me recap two key concepts: usability and releasability. A regulatory buffer is said to be usable if banks are permitted to operate normally even if their capital ratios decline below it. In some cases, firms may be subject to some consequences such as automatic constraints on capital distributions, although this is not always the case. [6] A regulatory buffer is releasable when the authorities can reduce it – including down to zero if need be – freeing up the capital resources. In the current Basel framework, only the CCyB is releasable. All other buffers that sit above minima are in theory usable but not releasable, as Sam noted in ‘Bufferati’. And the evidence suggests that firms would rather deleverage than use non-releasable buffers. The CCyB represents an effective tool to ensure firms continue to provide credit to households and businesses during times of stress or when particular risks crystallise. Varying the buffer – both up and down – in line with the evolution of economic conditions, underlying vulnerabilities and the overall risk environment allows jurisdictions to match the resilience of the banking system to the changing scale of the risk it faces. The CCyB is set using a range of indicators as well as forward looking judgement.
In this regard, private sector’s improvement in technology and innovations, in tandem with other infrastructure development, can become a tailwind to support the GMS to overcome technology stagnation and provide a competitive edge to the private sector. This should also enhance the intra- regional trade and investment capabilities. 13. Last but not least, financial system can act as a blood-vein that nurtures the economy. We might not realize the necessity of having a healthy blood- vein system in our body. But if there is a blockage, one could experience a detrimental malfunction of the brain, and stroke may occur. The same applies to our economy; efficient and accessible financial system will ensure smooth and solid transformation of the economy. At this juncture, financial institutions are a key in keeping the efficacy and health of the financial system in check. On one hand, financial prudence through enhanced risk supervision and management will provide a strong backdrop for improvement in financial system. On the other hand, the favorable financial system should also be underpinned by financial inclusion, which is analogous to having the blood-vein reaches all organs in our bodies. As I previously pointed out, increasing access to financial services will bolster economic dynamism where vast financial opportunities can be better tapped by private sectors. Ladies and gentlemen, 14. To end my remarks today, allow me to reiterate that these key enablers will be necessary to support the areas of transformation for the GMS.

We will have many opportunities during the course of this work to discuss with the Committee on Finance how we can develop and improve our analyses. BIS central bankers’ speeches  3
Given the undeveloped nature of Zambia’s financial system, it is evident that the diversification and strengthening of financial institutions, instruments and markets must be regarded as a prerequisite to further economic development. In this regard, the  10  BIS Review 99/2008  Government approved the Financial Sector Development Plan provides a framework for focused development of the financial system. Bearing the foregoing, the BoZ continue to closely monitor the financial condition and performance of the financial sector. References 1. FinMark Trust (2005). Measuring Financial Access in Zambia: Summary of Topline Findings, FinScope™(2005) Survey. 2. GRZ (2004). Financial Sector Development Plan for Zambia. 3. Honohan P., and T. Beck (20070. Making Finance Work for Africa. World Bank, Washington DC. 4. Jefferies. K. Enhancing Access to Banking and Financial Services in Botswana. Appendix I containing contact details of banking and other institutions in Zambia can be found on Bank of Zambia’s website www.boz.zm. BIS Review 99/2008  11

In these conditions, foreign exchange swap markets can speedily be used to convert liquidity from one currency to another at spreads that closely reflect the differences in domestic money market rates in the two countries concerned. But as we saw so clearly in 2008, this mechanism has a tendency to break down in a time of a financial crisis – precisely when it is most needed. Central banks can lend out their foreign exchange reserves, of course, but there is a well-known limit to that process. Some form of global liquidity provision is therefore needed. The swap lines granted during this crisis were precisely that, and most studies seem to support the conclusion that they made the crucial difference in relieving strains in banks’ foreign exchange funding. To a significant degree, this was the domestic LOLR process replicated at the international level. We have a solution, then, at least at the conceptual level. But it is not clear that it is a robust solution in practise. The swap lines are not at present a permanent and a reliable feature of the international monetary system; for instance, they have been strongly challenged in political discussion in the US. Furthermore, there are important unresolved governance issues, such as who should decide which countries get a swap line and which do not. It is thus an important item on the reform agenda to clarify the extent to which standing foreign currency LOLR facilities for solvent cross-border banks can be set up without going through national governments.
Interest rates must focus on the economy-wide inflation target. But macroeconomic stability benefits all sectors of the economy. That stability, upon BIS Review 111/1999  4  which the aspirations of parliamentarians, both at Westminster and in Edinburgh, depend, is fundamental to the future prosperity of the United Kingdom. And to maintain stability, interest rates will sometimes go down and sometimes go up. For a quarter of a century, my generation – the inflation generation – suffered from the instability created by high and unpredictable inflation. To the next generation, I would like the Prime Minister, whoever he or she is at that point, to be able to say, “You’ve never had it so stable, not just for one year, or two years, or even three, but for a whole generation.” It is well known that many, if not most, of the great British economists were Scottish. One of the few English economists to rival the Scots was John Maynard Keynes. His view was that, “If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!”. So perhaps the fate of the MPC is, rather like dentists, to perform an important service but one which does not make people happy. Regular monitoring and early treatment, while rarely pleasurable, prevent more unpleasant symptoms later. So it is with a pre-emptive monetary policy.

Only a further sharp rise in sterling, and further falls in commodity prices, could maintain these rates of decline of import prices and their benign effect on retail price inflation. And we see that these effects are now coming to an end. Import prices are beginning to rise, partly because of the recent rise in oil prices, but also because the rate of decline in other prices is slowing with sterling no longer appreciating as fast as it was. BIS Review 111/1999  2  It was possible to allow domestic spending in the economy to grow rapidly in recent years because the appreciation of sterling led to weak net trade. In real terms, the deficit in trade of goods and services has deteriorated sharply. But just as the one-off effects of lower import prices will not continue to hold down retail price inflation, so the rapid growth of domestic spending is itself unsustainable. In 1998 the increasing trade deficit reduced output growth by more than 2%. So modest output growth in the economy as a whole was consistent with rapid final domestic demand – that is spending by households, governments and business on consumption and investment. But the pace at which the trade position is deteriorating is itself now moderating, and final domestic demand grew at 4½% in the first half of 1999.
Finally, I think it is worth noting that if so-called macro-prudential policies are to be used successfully to improve the resilience of the financial system and to moderate the credit cycle, financial data collection will need to be more flexible in future. Almost certainly the seeds of the next financial crisis will sprout in a different corner of the financial system from this one. Collecting data dedicated to helping fight the last war will not serve, if those emerging risks are to be identified early and dealt with appropriately. Thank you. 6  BIS Review 142/2010

It is already clear however that it will amplify the headwinds to the strong recovery that the euro –area has been experiencing in 2021, and that it will intensify inflation pressures in a context where inflation has already increased significantly and will remain high over the coming months. The general uncertainty that marks the euro-area macroeconomic environment has implications for the conduct of monetary policy. In these conditions, it is important to balance carefully the risks of waiting too long to act as opposed to those of normalizing too soon. In any case, the  commitment of the ECB is clear: the Governing Council will do what is necessary to bring inflation firmly and durably to around two per cent over the medium term. The forward guidance, relying on state contingent criteria and the “sequencing” are instrumental to this goal. Policy normalization will follow a clear order: the ECB will end its asset purchases first, likely in Q3 2022, then raise the key interest rates, eventually reducing its balance sheet in a third step. All along this gradual process of normalization, the Governing Council of the ECB made it clear that it will maintainoptionality; gradualism and flexibility in the conduct of monetary policy. In that context, financial markets are currently considering that the rise in interest rates might start in the near future, with a first 25 bps hike almost fully factored in (90 %) as of next July, followed by two others by the end of this year.
And if adjusted for the cost of living the purchasing power parity (PPP) adjusted GDP doubled over the period to $ The sustainability of the economic growth momentum has been derived from the diversified economic structure that has evolved, as the flexibility of the economy has yielded the continuous ability to shift to new areas of comparative advantage. It is this diversification in the economy that has also reduced vulnerability to shocks and increased resilience. Malaysia has also taken advantage of globalisation to strengthen its economic and financial relationships with the major trading blocs in the world. This year we expect our trade value to exceed RM1 trillion for the first time. Foreign direct investment has been sustained, in particular, into the new areas of growth. There has also been an increase in Malaysian corporates and financial institutions venturing abroad. This has strengthened our inter-linkages in the global economy and our integration in the international financial system. Amid the environment of favourable growth and strong fundamentals, Malaysia has taken the opportunity to further deregulate and liberalise the Malaysian financial sector, with a view to enhancing its contribution to efficiency and growth. The sector has also continued to be progressively transformed through rationalisation amongst existing financial institutions and the introduction of new institutions. These developments have contributed to the strengthening of the international dimension in the financial system. This has been particularly the case for the Islamic finance sector.

As a compromise, the legal status of the new central bank was situated somewhere between that of a public and a private sector institution and it was given two head offices, one in Berne and one in Zurich. From the beginning, it thus occupied a special place in Switzerland’s political landscape. This special status has hardly changed over the years. In the 1930s, when devaluations and the abandonment of the gold standard often resulted in tighter government controls over central banks, the National Bank Act remained unchanged. Likewise, at the end of the Second World War, when many central banks were nationalised, the SNB remained a stock company open to private shareholders, and it has maintained this status to this day. Since 1973, following the abolition of fixed exchange rates and the introduction of an autonomous monetary policy, the circumstances under which this principle of independence is implemented have changed progressively. A growing need for transparency vis-à-vis the public and the authorities has emerged. This is why we have developed a strategy of active communication, and our relationship with the federal authorities has been gradually institutionalised. Nowadays, transparency and accountability have become principles of good governance for all independent central banks. In Switzerland, the revised National Bank Act of 2004 obliges the SNB to present an annual accountability report on the execution of its mandate to parliament. Application of rules Independence is not merely a theoretical concept, it must be lived constantly.
And, on the price front, they note that the disinflationary pressures of 2009 and 2010 have given way to inflation rates closer to what I and the majority of Fed policymakers see as the Fed’s objective of 2%. These considerations lead many to say that when adding up the costs and benefits of further accommodation, the risk of over-shooting our inflation objective through further policy accommodation exceeds the potential benefits of speeding the improvement in labor markets. I would argue that this view is extremely, and inappropriately, asymmetric in its weighting of the Fed’s dual objectives to support maximum employment and price stability. Suppose we faced a very different economic environment: Imagine that inflation was running at 5% against our inflation objective of 2%. Is there a doubt that any central banker worth their salt would be reacting strongly to fight this high inflation rate? No, there isn’t any doubt. They would be acting as if their hair was on fire. We should be similarly energized about improving conditions in the labor market. In the United States, the Federal Reserve Act charges us with maintaining monetary and financial conditions that support maximum employment and price stability. This is referred to as the Fed’s dual mandate and it has the force of law behind it. The most reasonable interpretation of our maximum employment objective is an unemployment rate near its natural rate, and a fairly conservative estimate of that natural rate is 6%.

The outlook for the Spanish economy over the next few years According to the latest economic projections published by the Banco de España, the upswing is expected to continue until 2019, although activity will tend to slow on account of, among other factors, the less expansionary fiscal policy stance and steady or rising prices for oil and other commodities, which are expected, in any event, to be higher than over the last two years. With regard to the composition of spending, the less expansionary fiscal policy stance and the squeeze on the income of resident agents, resulting from the rise in inflation associated with the increase in energy prices since early 2016, will somewhat reduce the growth of private domestic demand. Net external demand will continue to make a small positive contribution, against a background in which exports are expected to remain dynamic while imports remain relatively weak. The risks surrounding the central scenario The favourable outlook for economic activity I have described is subject to risks originating essentially in the external environment. First, although there has been an improvement in the outlook for world activity and trade, it has been accompanied by an increase in global uncertainty stemming from the greater strength of restrictive positions on trade, migratory movements and international policy coordination, in the area of financial regulation, for example. Second, we should not forget that, despite the significant progress made in deleveraging in recent years, our level of debt is still high.
I prefer to talk of “gradualism” rather than the “sandbox” approach, which is another frequently mentioned solution: when precisely should fintechs be placed inside or outside of a regulatory sandbox? Segregation may be less manageable than a process of proportionate adaptation. That said, both approaches may be combined. Moreover, fintech companies, which mainly operate on the Internet, are not bound by borders. This raises questions as to the efficacy of regulations which are still largely domestic or based on residency criteria. The cross-border nature of technological innovation in the area of banking and financial services is a strong incentive for the regulatory authorities to coordinate their policies at the international level. Constructing the possible trinity between innovation, stability and regulation for digital finance requires the regulator to improve vulnerability analysis, enhance the security of transactions, adapt regulations and relax supervision, while all the time remaining vigilant. More precisely, the need to adapt supervision to the specific features of fintech companies will require setting up dedicated teams to assist them in obtaining the necessary authorisations and to organise their supervision: this will be the case in France thanks to the creation of a Joint Unit by the ACPR (the French regulator for banks and payment institutions) and the AMF (the French market regulator). However, this is only the first stage. In the long run, it will be necessary to  2  BIS central bankers’ speeches  ensure that the same rules apply to the same activities, irrespective of the players performing them.

François Villeroy de Galhau: Financial stability in the age of digital industry Introducing speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Paris Europlace International Financial Forum, New York City, 18 April 2016. *  *  *  Ladies and gentlemen, I would like to introduce this third round table by presenting the latest issue of the Banque de France Financial Stability Review entitled “Financial Stability in the Digital Era”. This new edition of the FSR addresses a very topical issue in the financial world, the impact of digitalisation and how to regulate such changes where necessary. I am keen to hear today’s exchange of views. In this FSR, we have gathered contributions from prominent academics, practitioners and policy-makers in order to shed light on the impact of innovation on financial stability. I would like to express my sincere thanks to all the contributors who have provided their views and analyses on such a technical and forward-looking topic. I cannot list all the contributors just now but I would like to give a special mention to Ms Karen Gifford who is with us today. The contributions presented in the FSR are very diverse in nature. The aim of the FSR is to help readers form an opinion; it is not designed to convey the explicit message of the Banque de France. The core aims of our Review are to exchange ideas, explore a given theme from various angles, and juxtapose different analyses and opinions.