samchain/econo-pairs-v1 huggingface dataset:
But if activity were rather to show signs of freshening, there is a risk of the existing high inflation continuing and being incorporated in our  2  BIS Review 15/2002  perceptions of inflation in the longer run, with possible effects on, for example, future wage negotiations. That of course must not happen. A scrutiny of the current cyclical picture reveals a growing number of signs that activity abroad, above all in the United States, is on the way to improving. This is something that also affects conditions for the Swedish economy. A majority of leading indicators point in that direction. Although the upward phase does contain risks to which I shall be returning, there is still a good deal of evidence that a recovery in the rest of the world as well as in Sweden may be on the way to materialising later this year. A factor that often contributes to a cyclical swing is movements in stocks. When stocks are plentiful and sales are falling, firms often cut back production so that this falls more than demand. In this way, stock adjustments initially accentuate the cyclical downturn. When the reduction of stocks ultimately comes to an end, firms may step up production again even though demand has not yet started to recover. This drives a cyclical upturn and perhaps it is just such a positive effect that may be on the way. There are signs of this in the United States in particular but also in Sweden.

Suppose such a price shock occurs in a particular month; it will then leave its mark on the annual inflation rate in the coming year and then drop out of the statistics. As we normally count on a time lag of more than a year before monetary policy has its full effect on inflation, countering such temporary price impulses is both difficult and not particularly meaningful. Monetary policy accordingly focuses instead on the forecast of inflation one to two years ahead. Occasional shifts in the price level can, however, affect inflation prospects more permanently if they alter the general perception of inflation’s path in the longer run. To put it briefly, if temporarily high inflation induces a general belief that inflation will also be high in the years ahead, then monetary policy must intervene. Even if the economic situation as such does not give grounds for worrying about inflation, in such a case resolute action may be called for so that the higher inflation does not become entrenched via inflation expectations. This is quite simply because, in terms of decreased output and employment, preventing inflation expectations from rising is less costly than pushing them down once they have become established at too high a level. BIS Review 15/2002  1  These, then, are the types of assessment from which we, as members of the Riksbank’s Executive Board, form a picture of the prospects for inflation. We look at them from various angles, consider the risks and opportunities.
With these measures, one needs to take into consideration the fiscal support through a broad range of Page | 4 Document Classification: Public  government measures aimed at helping households and businesses, which also indirectly sustain the banks by mitigating the effects of the crisis on bank balance sheets. The negative implications from the pandemic will continue to be felt in the near term and this is why the Central Bank encourages all financial institutions to preserve capital, while at the same time continue to lend prudently and avoid unnecessary forbearance measures. I will repeat: the banks are sufficiently liquid, with strong capital ratios and financial resources, and these, coupled with their technological infrastructure and human resources, is enabling them to meet the challenges that the pandemic presents. To conclude, although the pandemic has been around with us for some nine months, the uncertainties surrounding it are still high, although recent news of the rollout of a vaccine in the very near future have surely given hope that we are closer to the end of the pandemic. Nevertheless, its effects will not go away any time soon, and 2021 will be a challenging year, both from an economic perspective and for the banking sector. Therefore, both fiscal and monetary authorities will need to remain vigilant and monitor closely the situation to avoid untimely withdrawal of support measures. Finally allow me a footnote. I would have welcomed this opportunity to say something about Brexit.

For this reason, parallel to decisions adopted with respect to internal management and the promotion of a risk-awareness culture, we continued to work on strengths already present in key areas of the Bank, namely the Research, Financial Policy and Financial Operations Division. In this sense, it is good to recall the whole process of reorganization introduced by the Board to improve the Bank’s efficiency, taking advantage of economies of scope and reducing transaction costs. Our policy of transparency and diffusion crystallized in the creation of a Department of Communications, that later evolved into a Department of Institutional Affairs and a Department of Communications Advise, with the purpose of providing an organized structure to all the information that stems from the Central Bank of Chile and that is intended to emphasize equity and depth in the delivery of information, as well as to give the Chilean people a boost in their knowledge of economic matters. Regarding internal management, we have perfected a human resources selection mechanism through external head hunting firms for managerial posts, and open, informed contests published on the website for other job positions. We have made great progress in our job appraisal policies, compensation structures to every employee and the setting of clear, measurable goals for levels 7 and up of the organizational chart. Along the same lines, we have recently approved new labor policies oriented at integral development, in order to contribute to the institution’s increased efficiency in achieving its goals and the personal fulfillment of the people who work in the institution.
Eddie Yue: Hong Kong – challenges and opportunities ahead Speech by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Institute of Bankers Annual Conference 2012 “The year of transformation – heading into a new era”, Hong Kong, 13 September 2012. *  *  *  Financial Secretary, Patrick, distinguished guests, ladies and gentlemen, Good morning. It’s my great pleasure to be here at the fourth Annual Conference of the Hong Kong Institute of Bankers. The conference title behind me talks of “Heading into a New Era”. That’s a grand and ambitious statement. But, I believe, a fair one. The opportunities ahead for the banking sector are vast, particularly in terms of the offshore renminbi (RMB) market and asset management services. Today I’d like to discuss with you the reasons for my optimism. In doing so, I will detour slightly through some of the policy, regulatory and organisational priorities I think we will all need to work on. To start out, though, I should first acknowledge that, as with any journey, the travelling may not always be smooth. There is likely to be some occasional turbulence. I’m referring, of course, to the external economic challenges. So let me start there. The challenges It has now been five years since the start of the global financial crisis. Yet low growth and high volatility remain key features of the global economy. So much so that some commentators have asked whether these represent “the new normal”.

Nor can it be ruled out that the external scenario will see a reduction in global cost pressures and inflation easing in most 6  economies, including Chile. In this case, the Fed's monetary policy response would be less restrictive than in the central scenario, which would give way to better financial conditions, a less appreciated dollar globally, and lower external inflationary pressures (figure 14). The central scenario projects that the pace of price increases will decrease in the coming months and that annual inflation will begin to decline. However, the risk of a much more persistent inflationary phenomenon is a concern for the Board. If materialized, it could lead to further monetary tightening, outside the upper limit of the MPR corridor. This risk is especially important in a context where inflation has been unexpectedly high for several quarters and inflationary expectations remain above 3% in the two-year horizon. Quickly recovering macroeconomic balances will help reduce this risk, while allowing the Chilean economy to appropriately address a further deterioration of the external scenario. Final remarks Our country is facing many important challenges. One of the most relevant macroeconomically is to reduce inflation, a problem that is putting a heavy burden on all of us. For more than two decades, inflation was not a matter of public concern and there were generations to whom it may have seemed an unknown issue. But in recent quarters it has become a complex issue, which is at the heart of our responsibility as an institution.
If this tendency persists in the coming months, the impact of oil prices on the 2006 end-year inflation will start to be felt. The effect of oil price increases has not yet gone beyond the relative price changes and has not led to pricing change in the sectors that do not utilize petroleum products as direct input. In other words, the secondary effects remained at a limited level. Nevertheless, expectations have adopted a position that requires more careful monitoring compared the previous quarter. At this point, it should be underlined once more that the CBRT would provide the necessary response, if the increases in oil prices persist and the secondary effects manifest themselves. Another factor that leads to a slowdown in the disinflation process is unusual price increases in some items, such as rent, due to the persistence of the supply gap in the housing sector. Services price increases, especially rent-originated price increases in the services sector, are expected to realize significantly above the general inflation tendency throughout 2006. It is considered that this development has resulted mainly from the structural factors specific to the transition period and will continue for a certain period of time. But it is also believed that at this stage it does not require any monetary policy response. It is predicted that this situation will gradually be back to normal with the harmonization of housing supply. The contribution of the increase in the services group to 2006 inflation is forecasted to be around 2.3-3 points.

Thomas Jordan: The Swiss National Bank’s monetary policy and the Swiss financial centre Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the first meeting of the “Rencontres économiques de Genève”, organized by Fondation Genève Place Financière, Institut National Genevois, Investment Strategists Association of Geneva, Geneva, 3 November 2015. *  *  *  The speaker would like to thank Samuel Reynard and Rina Rosenblatt for their valuable support in preparing this speech, and Katrin Assenmacher, Petra Gerlach and Rita Kobel for their helpful comments. Introduction It is a great pleasure for me to be here with you tonight in Geneva, a key pillar of the Swiss financial sector. I also feel very honoured to be addressing you at the very first meeting of the “Rencontres économiques de Genève”. Indeed, the financial centre of Geneva is also important from an international point of view. Its roots as a financial centre go back several hundred years. In the early 18th century, the minute Republic of Geneva was one of six major international financial centres, together with London, Paris, Amsterdam, Frankfurt and Brussels. It owed its ascent to its cosmopolitanism. Several factors bear witness to this, including the city’s political neutrality and the fact that it welcomed protestant Huguenots who had been persecuted in France. In the 18th century, close personal relationships were established with the leading Parisian banks and the French court. In this way, Geneva bankers were eventually among the main financiers of France.
Andrew Bailey: Progress on prudential regulation and three areas to complete Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the City Banquet, Mansion House, London, 22 October 2015. *  *  *  My Lord Mayor, Ladies and Gentlemen – it is a great pleasure to be here again at the regulators dinner, and it is very good of you to entice so many people here tonight with the prospect of an evening with regulators. I won’t speculate on how this ranks on the scale of evenings spent in our cosmopolitan capital city. It is also a great pleasure to be speaking here tonight with Tracey. This evening I want to describe the progress we have made on prudential regulation and then examine a number of topical issues for the PRA and the Financial Services industry: the Senior Managers and Certification Regime; structural reform and ring fencing; and what the PRA is doing to pursue its secondary objective on competition. A common theme here is getting the incentives right to support good outcomes in relation to both prudential and conduct objectives. Progress It is over eight years now since the financial crisis began in this country. And to continue Tracey’s theme for a moment, it is possibly salutary to recall that amidst the many bad events of Autumn 2007, England reached the Final of the Rugby World Cup.

Interest rates which determine savings and investment decisions and therefore have a stronger impact on the economy typically have longer maturities. In order to impact the economy, monetary policy impulses must therefore first be transmitted from the money market to the capital market. The money market and the capital market are linked by expectations. Neglecting transaction costs and risk premiums, the expectations theory of the term structure views the long-term interest rate as an average of the shortterm interest rates expected to prevail until the maturity of the respective bond. Although current shortterm interest rates have some effect on longer-term bond yields, the expectations theory of the term structure tells us that it is primarily expected future short-term interest rates which determine bond yields. In practice, due to uncertainty about the future evolution of short-term interest rates and due to time-varying risk premiums, the longer the maturity, the weaker the link between current short-term rates and long-term rates. Therefore, in practice, a central bank would often find it difficult to guide longer-term interest rates to a level commensurate with what it considers to be the optimal monetary policy stance. Assuming a flexible exchange rate regime, the exchange rate is arguably the quickest transmission channel for monetary policy, particularly in open economies. Exchange rate movements rapidly affect prices (via import prices) and subsequently demand (by boosting imports and slowing down exports, or vice versa). In theory, monetary policy impacts exchange rates via the yield curve and from there via interest rate parity relations.
The economies of Southeast Asia are particularly exposed to such reconfigurations as they have high participation in global value chains, but are located mostly downstream in those value chains, and thereby face higher risks of being left out. •  At the same time, greater importance attached to ESG considerations have led to new standards and expectations--new global rules of the game--about how countries can participate in international trade. •  For small open economies, the challenge is to find their place in the rapidly evolving international trade landscape. How should they position themselves between the major trading powers? To what extent can regional trading blocs help to increase their voice in the international arena? Where are the best opportunities to plug themselves into a new configuration of global supply chains? •  Small open economies can best navigate and benefit from the shifting trade landscape by keeping their outward orientation, strengthening domestic institutions, and undertaking structural reforms that enhance flexibility. This would allow them to harness technology to upgrade their production capabilities and adapt to new trade patterns, including integration into evolving global supply chains. Services trade, especially in intermediate services such as telecommunication services and IT management, offer large growth potential. As world trade bounces back following the pandemic, opportunities for exports of services are likely to exceed those in goods. Active engagement in bilateral and regional free-trade arrangements will also help to diversify the trade base. •  Our economies must also quickly adapt to the new global rules of the game.

And if strong worldwide demand and impaired global supply chains raise the price of a good we buy on global markets, as we’ve seen over the past year, there’s no avoiding the consequences of that for real incomes either. One way or the other, either via lower nominal pay or higher prices, real incomes will be lower than they otherwise would have been. Indeed, because suppressing nominal wages itself involves a real cost – unemployment would need to rise – real incomes would be that much lower in the first case than in the second (i.e. in the simulation depicted in Charts 5a and 5b than they actually have been this year). What policy can do – assuming these shocks are foreseeable, or persist for long enough – is to make a choice between these outcomes. Again supposing all this had been predictable in advance, in the spring of 2020, the policy maker in this simulations might have chosen not to tighten policy quite so aggressively, and to tolerate a degree of above-target inflation at the end of this year, in order to avoid such a steep rise in unemployment. But this obviously involves a trade-off. In the face of big increases in import prices of this sort, either you stick rigidly to the primary inflation objective, and suffer the greater hit to real incomes and domestic output; or you accommodate somewhat higher inflation and pay some attention to the secondary goal of stabilising the domestic economy.
During the recession we have been trying very hard to stimulate the economy – but always with an eye on inflation returning to the 2% target in the medium run, as we are required to do. If QE has contributed to inflation still being somewhat over-target at around 2 ½% now, that seems to me a much better outcome than the alternative of a deeper recession and a greater risk of deflation. We have had our critics over the past few years and an open debate on monetary policy is to be welcomed. But I have not heard anyone suggest a more convincing or attractive policy stance for monetary policy than that which we have pursued. The question now is what we should do with monetary policy as these shocks work their way out of the system. It feels as if monetary policy has done well to underpin the economy and to stop recessionary forces from gaining the upper hand. But it hasn’t been sufficient to generate a return to trend growth yet, let alone any catch up. The reason may be in the real balance sheet adjustments that I have described. Low interest rates and increases in the money base make the economy very liquid. Those with excessive debt levels can take their time to adjust in an orderly fashion.

BIS Review 161/2010  7
BIS Review 66/2004  5  The concern relates in particular to the likelihood that some households may be underestimating the risks they face. These risks are associated first, with the higher sensitivity of households to changes in interest rates. In this regard, we have seen a tendency in some euro area countries to increasingly focus on borrowing at conditions which are linked to short-term interest rates. For many households this seems to be an attractive option as it implies a rather low interest rate burden notably at the beginning of the contract. What is often overlooked, however, is the fact that the currently low interest rates could well change over time. A second risk relates to future house price changes. Some valuation measures for property prices, such as the price-to-rent ratio, are now 10-15% higher than their average levels during the period 1995-2003 in the euro area as a whole. These valuation measures have even reached levels as high as 17%. Against this background, concerns have been expressed that substantial house price increases in some countries entail risks of a reversal of this trend that may currently be underestimated. It is not the first time we have been confronted with pronounced movements in asset prices in the euro area. Indeed, current movements in house prices are small when compared to some swings in stock market prices over the last six years. We have witnessed rather substantial share price fluctuations resulting from the new economy euphoria and the subsequent disillusionment.

In real terms, this corresponds to growth rates of 4-5%, which is relatively high by historic standards. Differences across euro area countries have been considerable: while in Spain, France, Ireland and Italy, residential property prices were rising on an annual basis by between 11% and 17% in 2002 and 2003, they have been falling slightly in Germany and Austria in the last four years. The dynamism of property prices in several euro area countries is very much related to the very low levels of interest rates brought about by the introduction of the euro. For several euro area countries, the adoption of the euro marked a significant fall in real interest rates, as it implied a “regime change” towards a more stable macroeconomic environment. The fall in interest rates, in turn, allowed households to borrow more and accumulate more debt. As a consequence, household indebtedness in the euro area has increased significantly in recent years. In 2004 it is estimated at 54% of GDP, up from 46.5% in 1998 and 43% in 1995. The rise in household debt has not, however, been accompanied by higher interest payments as a ratio of disposable income in the euro area as a whole. This ratio amounted to 4.6% in 2003, similar to the 4.8% observed in 1998. However, the strong rise in house prices and the substantial increase in household indebtedness have raised some concerns. Given the differentiated path of house price increases across countries, this concern is obviously more relevant and stronger in some countries than in others.