samchain/econo-pairs-v1 huggingface dataset:
At the end of the new forecasting horizon in the third quarter of 2007, inflation would stand at 2.6%. The lower long-term inflation forecast suggests that there is currently more room for manoeuvre in maintaining an expansionary monetary policy course. 4. Exchange rate  The dollar has plummeted since October. It has lost 7.9% vis-à-vis the Swiss franc. Notwithstanding the sharp fluctuations of the dollar, the franc has remained virtually unchanged against the euro. The depreciation of the dollar has a direct impact on the Swiss economy in that it undermines the price competitiveness of the export industries. Moreover, a weak dollar also exerts an indirect influence by clouding growth prospects in Europe, our largest sales market. The appreciation of the franc has tightened monetary conditions. At the same time, the weaker dollar has a dampening effect on import prices and, consequently, on inflation prospects. 5. Continuation of expansionary monetary policy  I will now come to my concluding remarks. The inflation forecast shows that the process of normalisation of monetary policy has not yet ended. In light of my comments it should nevertheless not be difficult to understand our decision to leave the three-month Libor rate at 0.75%. Since inflationary pressure is expected to ease in the long term, there is no need to take a further step toward a normalisation of interest rates at this point in time. In addition, the stronger franc has already resulted in more restrictive monetary conditions.

With our decision to keep the three-month Libor rate on hold, we are adhering to our current monetary policy course: we are making use of our monetary policy leeway to support growth without jeopardising long-term price stability. Every forecast and every decision is fraught with uncertainty. Should unexpected events delay economic recovery or push up the Swiss franc sharply, we shall take appropriate action. For such cases, the Swiss National Bank keeps all its options open. 2/3  Observed inflation December 2004  Inflation forecast on September 2004 with Libor at 0.75% and of December 2004 with Libor at 0.75%  3/3
In contrast to the stagnant consumer, business spending on inventory accumulation and fixed capital together contributed 2½ percentage points to GDP growth last year. The contribution from stockbuilding cannot be expected to persist and indeed has already waned somewhat. As far as capital spending goes, on the one hand, there seems little rationale for businesses to expand capacity while activity is weak and there is still a margin of spare capacity. On the other hand, business investment is still about 20% lower than its pre-crisis peak (Chart 3). Some of that shortfall reflects replacement investment postponed during the recession, which is likely to be re-instated at some juncture. Moreover, even though overall demand may remain depressed, the rebalancing in activity towards the internationally tradable sectors of the economy will probably necessitate some expansion in capacity in those sectors, while achieving cost savings and efficiency gains also often requires investment. Finally, many large companies are presently cash-rich and can access the capital markets. So a shortage of finance should not prevent them increasing their investment spend, though some smaller businesses relying on bank credit may have more trouble. But, overall, it seems reasonable to expect further recovery in business investment. Given the past substantial depreciation of sterling and the associated improvement in the competitive position of UK suppliers, the performance of net exports has so far been somewhat disappointing. That is less to do with exports, which grew by more than 5% in 2010, reflecting both strong global growth and improved competitiveness.

And, indeed, wage growth has been, and remains, subdued (Chart 9). But other factors have conspired to push inflation well above the MPC’s 2% target. First, the substantial depreciation of sterling, though helpful to the necessary re-balancing of the UK economy, also simultaneously raised import prices. We initially underestimated how strong this impact would be, but we now think that the rise in import prices as a result of depreciation has added somewhere between 4¼% and 6½% to the level of consumer prices. Second, commodity prices – especially oil prices (Chart 10) – have been on something of a roller-coaster, rising sharply on the back of strong growth in the emerging economies up to mid-2008, then falling back sharply as global activity collapsed at the end of 2008. They have subsequently rebounded, reflecting both the recovery, especially in the emerging economies, and temporary adverse supply factors (bad weather affecting agricultural commodities; unrest in the Middle East and North Africa affecting oil). Finally, the increase in the standard rate of VAT has also boosted inflation. The blue swathe in Chart 11 shows our estimate of the combined contribution of these three factors, for a range of plausible assumptions, together with the actual inflation rate (the red line). The green swathe is the implied contribution from all other influences on inflation.
Nonetheless, as in the case of budgetary policies, a common framework for action is only effective if accompanied by the sufficient political resolve to adopt the measures that enable programmed objectives to be met. In the case of structural policies, these are chiefly oriented to stepping up the use of the labour factor and to increasing the pace of productivity through the promotion of knowledge, innovation and the incorporation of new technologies. As earlier mentioned, the phase of more dynamic economic growth initiated around mid-2005 continued in the opening months of 2006. The main international organisations have forecast a rate of increase in GDP in the euro area of slightly over 2% in 2006, i.e. around potential. This recovery will foreseeably be underpinned by the strength of domestic demand, among whose components investment is expected to post a high rate, while private consumption will probably trend more moderately, albeit at a somewhat higher rate than in recent years, in step with the gradual improvement expected in the labour market. However, there are some factors of risk clouding this outlook. In the external environment, such factors comprise the existing global imbalances and the persistence of high oil prices. On the domestic front, employment and consumption are the factors subject to most uncertainty. The inflationary outlook for 2006 and 2007 indicates that the rate of change of the HICP may be close to the price stability benchmark of 2%, or might even exceed it again.

In practice what that would be likely to mean in our present situation is substantially lower interest rates: the intended effect would be to stimulate external demand, but it would inevitably also involve further stimulus to domestic demand. In effect, it implies that we should acquiesce in increasing overall demand pressure leading inevitably to faster inflation. That might conceivably even BIS Review 31/2000  2  provide some relief to the suffering sectors in the short term. But increasing demand pressure, including labour market pressure, and accelerating inflation would - as we’ve repeatedly seen in the past - ultimately need to be brought back under control, involving a more abrupt tightening of policy. That frankly would not do the suffering sectors themselves much good at least for very long - and it would have a potentially serious destabilising effect on the economy as a whole. That is precisely what we are trying to avoid. And there, I do rest the case for the defence - at least in relation to the principal charge of malice aforethought - or even malice as an after thought. Just as some of you would like to see the euro strengthen from your microeconomic standpoint, so too would I, from a macroeconomic perspective, because it would help to restore a better, more sustainable, balance within the economy.
For purposes of comparison, the (dash-dotted) green curve shows the conditional inflation forecast published in March, which was also based on the assumption of a three-month Libor of 0.25%. Until the beginning of 2012, the path of the SNB’s new conditional inflation forecast lies above that of the previous quarter’s forecast. This is attributable to the assumption of higher oil prices compared to the previous quarter and somewhat higher import prices. The significant increase in the third quarter of 2011 is due to a base effect, because inflation in the corresponding quarter of 2010 was comparatively low. In addition, a one-off statistical effect can be expected in the third quarter of 2011. This is attributable to more frequent data collection in the case of prices for clothing and shoes; it also accounted for an increase in inflation in the first quarter. During the course of 2012, the path of the new forecast falls below that of March, due to the slowdown in inflation attributable to the latest appreciation in the Swiss franc. Towards the end of the forecast period, inflation rises briskly and exceeds the upper bound of 2%. This shows that the current expansionary monetary policy cannot be maintained over the entire forecast horizon without compromising price stability in the long term. Due to the risks mentioned previously, the conditional inflation forecast is, however, associated with a high level of uncertainty.

The SNB is concerned about exchange rate developments. The SNB forecasts are based on the premise that the exchange rate developments will stabilise in the medium term. Should the exchange rate again be subject to significant changes, a reassessment of the inflation outlook would be required. Since the last monetary policy assessment, the M2 and M3 aggregates have been growing at about 7% year-on-year. Some of this high growth rate is attributable to the current low interest rates. Overall, ample liquidity is available in the economy and this means potential risks for price stability in the long term. Mortgage lending has also continued to increase substantially, growing at a rate of 4.7% in April. In an environment of low interest rates and substantial advances in real estate prices, a high rate of growth in mortgages can harbour risks for financial stability. In the speech that follows, my colleague Thomas Jordan will outline for you the SNB’s Financial Stability Report. In view of the potential risks for the financial sector, the SNB continues to closely observe the situation on the mortgage and real estate markets. 2  BIS central bankers’ speeches  Chart of conditional inflation forecast The (dashed) red curve on the chart represents the new conditional inflation forecast. It shows the future path of inflation, assuming that the three-month Libor remains constant at 0.25% over the next twelve quarters, and it covers the period from the first quarter of 2011 to the first quarter of 2014.
Josef Bonnici: Lessons from the crisis Address by Professor Josef Bonnici, Governor of the Central Bank of Malta, at the annual dinner of the Institute of Financial Services, Saint Julian’s, 25 November 2011. *  *  *  Hon. Minister, Excellencies, Members of the Institute, Distinguished Guests I would like to thank the Malta Institute of Financial Services for inviting me to address this distinguished audience. Mr President, I am aware of your Institute's leading role in banking and financial education in Malta and of its endeavours to establish forms of collaboration with other educational institutions with the aim of increasing the variety of courses offered to professional staff within the financial services industry. I understand that a notable development over the last year was the relationships you established with the University of Bangor and other strategic partners in order to launch a Chartered Banker MBA course locally. This is certainly an achievement and I augur you further success in expanding your reach to all members of the financial community through the activities that your Institute organises and the training facilities it provides. This evening I shall dwell on the sovereign debt crisis in the euro area, a topic which has persistently made news headlines over the past 18 months, and unfortunately continues to do so today. There are lessons from this period of crisis that are relevant for both policymakers and the banking community.

Ardian Fullani: The current performance and development prospects of the Albanian economy Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Bank of Albania’s forum with representatives of main businesses operating in Albania, Tirana, 23 November 2009. *  *  *  Dear Ladies and Gentlemen, It is my pleasure to be among you today, to share with you our views on the current performance and development prospects of the Albanian economy. As the most dynamic part of the Albanian economy, your contribution has been tangible in the country’s economic development during transition. Your incentive, your willingness and devotion have brought about tangible results in the country’s development. In a single figure, the Albanian economy performance may be summarized in the growth of above 65 percent of gross domestic product and well-being per citizen during these years of transition. Our development prospect remains as much positive. The country’s macroeconomic stability, the continuation and deepening of structural reforms as well as the geopolitical reality of approximation to developed economies of the European Union, would help in a fuller release and remuneration of your potential and energies. Today’s forum aims to highlight the economic development of the country and initiate a broad public discussion on alternatives of the future economic growth models. Now, let me start by making a brief statement of the latest developments of the Albanian economy, and further dwell upon our viewpoints on the country’s economic development in the future.
As I have already implied, it was not possible to draw any more precise conclusions on an exact figure, but their conclusion was that an inflation target of between 1 and 3 per cent is a good choice. If it is lower than 1 per cent, it can have a negative effect on economic growth. However, if it is above 3 per cent, it is too high for most people to perceive prices as being stable. This is why countries with an inflation target have often chosen a measure of inflation of around 2 per cent, which was of course also the case in Sweden. Must the inflation target be defined in terms of the CPI? One question that often arises in the debate on monetary policy is whether it might not be better to replace the target for the CPI with a target for some other measure of inflation. One suggestion that came up during the autumn, for instance, when energy and food prices rose  2  BIS Review 2/2008  substantially, was that the inflation target should only apply to domestic inflation – that is increases in prices of goods and services produced in Sweden. Energy prices and many food prices are determined on the world market in any case and are outside the reach of the Riksbank. This is true, but the price of, say, rice in our shops is not the same as the world market price of rice.

However, the day that Sweden becomes a member of EMU and we have the euro as currency, the portfolios of the insurance companies will appear rather remarkable if a predominant part of the risks in interest-bearing securities is in five housing loan institutions. Even if housing bonds are as gilt-edged as possible, the insurance companies in this situation will feel a need of increased diversification. The main argument for enabling the Swedish housing companies to issue gilt-edged bonds is naturally that competitors in Europe issue them and they are established in the market. They would be easier to sell to investors, carry a higher liquidity and provide lower interest rates than traditional Swedish housing bonds. This would facilitate financing and hopefully give the consumers lower interest rates. There is undoubtedly something in this line of reasoning. However, the Riksbank has taken a critical attitude to this proposal more for reasons of principle. The housing institutions have every opportunity themselves – via clauses in the bond contracts or even in articles of association – to create the collateral arrangements that they consider appropriate and thus give their bonds the gilt edge that they consider necessary to facilitate financing. If the state assumes the responsibility of legislating about the design of bonds and moreover to check compliance by institutions, this is a regulation that cannot be motivated by concern for the stability of the financial system but rather aims at improving the institution’s profitability by reducing financing costs.
We can take advantage of emerging geospatial tools to monitor assets in real time, such as to track the degradation of carbon sinks or high conservation value lands. The NGFS Taskforce that I mentioned earlier will include guidance for future deep dives into nature-related metrics, data, and scenario development. Fourth, reliable, consistent, and comparable nature-related disclosures. Standards will help to guide companies in creating much-needed transition plans for nature. Key stakeholders like the International Sustainability Standards Board, the Task Force for Nature-Related Financial Disclosures, and jurisdictional standard setters must work closely together. Along with the climate crisis, the nature crisis is the existential challenge of our times. We cannot focus on one and hope the other will take care of itself. We need to address them both in a holistic manner. This is the growing conviction of the NGFS and the financial industry. With the nature crisis, the financial sector must now translate that conviction into determined action, as it has begun to do with the climate crisis. A good  3/4  BIS - Central bankers' speeches  way to start would be to harness the power of finance to help implement the post-2020 Global Biodiversity Framework. Thank you. 4/4  BIS - Central bankers' speeches

These differences in strategies are reflected in different action plans, some aimed at growth in loans or commissions, others at streamlining costs through various means, including digitalisation or externalisation. The options are varied and should be adapted to the actual circumstances of each bank. Conclusions In conclusion, my address has focused on the importance of reflecting on the banking business model as a cornerstone for being able to achieve a sustainable level of profitability over time. I have stressed certain elements central to this reflection, such as detailed knowledge of the reality of the business, a price-setting policy that reflects the risk and cost of each product, a strategy geared to strengthening capital and reducing non-productive assets, sound governance and an individualised and tailor-made strategic approach. 7/8  Banks are preparing for the future and the new times ahead, although nobody knows for sure what this will be like. What is clear is that only banks that are proactive and better prepared from the strategic standpoint will be capable of exerting influence over their profitability and sustainability over time. Thank you for your attention. 8/8
[…] a fund mechanism […] makes it easier to decouple annual spending of petroleum revenues from current revenues.”3 7/9  BIS central bankers' speeches  Returns in financial markets also vary more over time than other revenues. With the current size of the oil fund, fluctuations in the value of the fund may be considerable from one year to the next. Fiscal policy and the Norwegian economy must be shielded from these fluctuations in the years ahead. The needed decoupling that was highlighted in the Revised National Budget for 1995 has taken on a new form. Chart: Fiscal spending of petroleum revenues Combined with high oil prices and healthy returns, the fiscal rule has brought considerable fiscal leeway. This year around a fifth of government spending will be financed by transfers from the oil fund. The level of oil revenue spending has reached 8 percent of mainland GDP. There will be less leeway further ahead. Last year was the first time money was transferred out of the oil fund to finance the non-oil deficit. We can no longer assume that the oil fund will continue to grow as a share of the economy. With a high level of oil revenue spending, there is a risk of a sharp reduction in the fund’s capital. This could, for example, happen if a global recession triggers both a decline in oil revenues and low or negative returns on the fund’s capital.

Chart: Oil investment and spending of petroleum revenues Most of us might say that the economic winter has been fairly mild so far. This is partly because the economy has been provided with ample fuel. When oil prices started to fall, the economy had for several years enjoyed both strong growth in oil investment and fiscal spending of petroleum revenues. Oil investment has since declined, while government spending has continued to rise. Spending of oil revenues has increased by about as much as oil investment has fallen since 1/9  BIS central bankers' speeches  2013. Chart: Key policy rates Monetary policy has also made a substantial contribution. An already low policy rate was cut further. The key policy rate has now been kept at a record-low 0.5 percent for close to a year. In our neighbouring countries, interest rates have come down to even lower levels, but in real terms the interest rate level has been lowest in Norway. The krone exchange rate fell in tandem with the oil price and led to higher prices for imported goods, resulting in a temporary increase in inflation. Since there is confidence that inflation will remain low and stable, we have been able to disregard that increase when setting monetary policy. The social partners have shown wage restraint. The krone depreciation has thus translated into a marked decline in relative labour costs, which has helped strengthen the position of Norwegian firms exposed to international competition.