samchain/econo-pairs-v1 huggingface dataset:
In contrast, the need for adjustment is less in those large corporations whose growth has largely been based on increased geographical diversification. All the foregoing factors will influence the pattern of exit from the recession. The need to reduce debt levels will, coupled with fiscal consolidation demands, continue to limit the possibilities of expanding domestic spending, meaning that the recovery should turn on net external demand. At the same time, it is necessary to begin to reverse the dynamic of external debt, which will require further progress in attaining a more balanced foreign trade position, overcoming the obstacles posed by the high investment income component and the dependence on energy imports. A pick-up in competitiveness will thus be pivotal if external demand is to stand in for the shortcomings of domestic demand and boost growth on the supply side, which in the current circumstances is the only way forward. To overcome the crisis an economic policy geared to the medium term is needed to help complete the correction of the macroeconomic imbalances still in place, to further the restructuring of all sectors and to allow the structural reforms outstanding to be tackled. BIS central bankers’ speeches  3  Fiscal consolidation is unavoidable if growth in the medium term is to be restored, despite the fact the scale and timing of the adjustment required may have adverse effects in the short term. This is the only strategy available for restoring market confidence.

They are indispensable to avoid any room that may be used for abusive actions that would impair the institution. I therefore request that you take the necessary measures in terms of financial, human and technological capacities in order to ensure the safety of each banking operation. In pursuing its supervisory function, the Bank of Albania will have this matter under close focus and I assure you that any decision that may have hampered the safety of the activity will be handled with utmost stringency by the law. In a broader context, banking activity, in addition to operational risks, is faced with other financial-related risks. We will therefore increase the regulatory requirements for banks to be engaged in an integrated process of risk evaluation and management proportionate to the level of development and sophistication. In a more practical approach, this implies that banks should have specific functional structures that monitor risks in the main activity areas and endeavour to anticipate their possible evolution and impact on banks’ activity. These structures must be  2  BIS Review 174/2010  in place in the largest banks and their products should be an integral part of the decisionmaking process. Dear participants, We are leaving behind a challenging year but other numerous challenges will follow for banking activity. They provide us the opportunity to put our vision into practice, in order to ensure a stable banking activity as a precondition for conducting an efficient intermediation activity with remarkable contribution to economic development at home.
It’s perhaps informative to contrast this kind of program with one that has historically been the main mechanism by which the supply of affordable housing has increased. The program I have in mind here isn’t a housing program, but, in my view, it has extremely important effects on the housing market. I’m talking about intra-urban transportation, which can serve to dramatically increase the locations available for development, and thus promote the availability of affordable housing.13 I believe that safe, reliable, affordable and efficient transportation to job locations should be a crucial element in an effective housing policy. Such a program indisputably increases the supply of sites available for development, which is a key way to get the benefits of lower prices to a broader set of families. Indeed, it is clear that cities’ ability to grow and attract new residents requires them to either increase density – essentially meaning taller buildings – or to expand outwards by increasing transportation access. Access to affordable credit is yet another pillar of a policy program that promotes housing affordability. We at the Federal Reserve have long worked to ensure that credit flows equitably and that financial services are available to all U.S. citizens. The Fed’s research on these subjects ranges from the pioneering study of redlining by a team of Boston Fed economists, to a very recent New York Fed study on “banking deserts” that appeared in our Liberty Street Economics blog just last month, as well as ongoing community credit work.

As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 The Federal Reserve’s employment objective can be viewed both narrowly and broadly. Narrowly, we focus on the degree of slack or tightness in the labor market. This leads to discussion of many measures of the labor market such as the unemployment rate, the participation rate and the growth of wages. Broadly, the economy’s potential growth rate depends on effectively investing in and taking advantage of all of the resources in the economy – in particular, we need to achieve the full potential of the human capital of all Americans. For the United States to reach its maximum economic potential, all Americans must have the opportunity to reach their potential. The United States has always prided itself on being “the land of opportunity.” Parents hope that their children can achieve more than they did. Over the course of our history, immigrants have journeyed to America in search of a better life, a chance to live the “American Dream.” What defines the American Dream?
With that background, I would like to comment on some of the criticism of Fed policy decisions. Some of the commentary surrounding the FOMC’s June decision to raise the federal funds rate 2/6  BIS central bankers' speeches  target by 25 basis points illustrates the current tension between “too low” inflation and “too buoyant” financial conditions. On one hand, some observers question the decision to reduce policy accommodation given that inflation has fallen somewhat further below our objective. I would respond to these concerns by noting that monetary policy is still accommodative and that financial conditions have eased. In addition, the long and variable lags between monetary policy adjustments and their impact on the economy imply that the FOMC may need to remove accommodation even when inflation is below its goal. In particular, if the unemployment rate were already below its longer-run natural rate, as may be the case currently, the impact on wage growth and price inflation would still likely take some time to become evident. This would be particularly true if inflation expectations were well-anchored at or slightly below our 2 percent objective, as is the case currently. On the other hand, some Fed watchers have argued that we are helping to create financial asset bubbles by not removing accommodation more quickly. My view is that asset valuations are not particularly troublesome given the economic environment in which we’ve been—that is, a long period of moderate growth, low inflation, low interest rates, and low recession risks.

The element that marks a growing concern with regard to restrictiveness relates to the capital of banks. Clearly, the considerations in respect of the need to replenish capital are starting to exert a strong influence on the decisions of banks to grant new credit. This dynamic is worrying. It indicates that the banking system is interpreting the new regulations restrictively for credit. This approach is undesirable and out of line with the objectives so far followed by the economic policy authorities of supporting the financial system, not as an end in itself but as an essential function of savings intermediation. The outcry surrounding the effects that future capital standards and risk management – the so-called “Basel 3” – will have on credit developments in the short term seems unjustified. The new rules are specifically intended to ensure a more orderly and sustainable flow of credit, not a reduction. Moreover, as I said earlier, a gradual process of adaptation to the new requirements is foreseen. The new capital requirements may be attained in two different ways, although they have opposite effects on banking activities: reduction in banking activities, particularly in credit to firms, on the one hand, and capital increase on the other. The alarm that seems to be widespread in the banking sector concerning the new rules seems to mask the intention of adapting to them via a reduced exposure to the real economy, rather than via a capital increase.
Thomas Jordan: Comments on Swiss monetary policy Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 106th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 25 April 2014. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests The Swiss National Bank (SNB) has a mandate to ensure price stability, while taking due account of the development of the economy. The monetary policy decisions needed to fulfil this mandate have a direct impact on the size and composition of our balance sheet. As a result of the current size of our balance sheet and the nature of our investments, it can be assumed that the annual results will continue to fluctuate significantly in the foreseeable future. Since summer 2007, the global economy has experienced a series of crises. At times, it was on the brink of the abyss, and the threat to the Swiss economy was correspondingly great. In order to fulfil our statutory mandate, we have been obliged to resort to unconventional measures, rather than operating solely with the familiar monetary instruments. The most exceptional measure was certainly the introduction and enforcement of the minimum exchange rate against the euro. However, the creation of the stabilisation fund to take over illiquid assets from UBS was also a special measure. In 2013, this episode was successfully concluded. By contrast, the minimum exchange rate remains the SNB’s key monetary policy instrument.

We do not know yet how the initiative will be implemented and what effect it will have on our relationship to the EU. Consequently, the economic impact of the popular decision cannot really be properly quantified at the moment, and this is why it has not been included in our forecast. For 2014, we continue to expect economic growth of around 2%. Inflation in Switzerland and the SNB’s monetary policy The greater economic momentum which we are forecasting will gradually lead to a better utilisation of production capacity. The underutilisation which still prevails continues to restrain consumer prices in Switzerland. Declining inflation abroad and the slightly stronger Swiss franc are having a similar impact by dampening imported inflation. Thus the SNB’s inflation forecast shows that there is no risk of inflation in the foreseeable future. In 2014, inflation in Switzerland is likely to amount to only 0%. In addition, the international environment is still giving rise to high levels of uncertainty. Consequently, the danger that the Swiss franc, as a safe haven, might suddenly be subject to further upward pressure has not been averted. Short-term interest rates are practically zero. For this reason, the minimum exchange rate is the right tool to avoid an undesirable tightening of monetary conditions, since an appreciation of the Swiss franc would lead to a further decline in import prices and a renewed threat of deflation. Given this situation, the SNB is maintaining the minimum exchange rate of CHF 1.20 per euro.
I believe that there is a broad understanding among households, companies and market agents that we need to adapt monetary policy and reconsider how we should set  BIS Review 106/2007  3  the repo rate in future when new information changes the economic picture. We have been clear about the fact that a forecast is by definition uncertain and that it becomes more so the further ahead it stretches. And the interest rate path presented in the Monetary Policy Report is indeed a forecast. It is not a promise! The fact that we do not have perfect knowledge of the future is no reason to refrain from being as open and clear as possible with regard to what we believe will happen. We must form an opinion of how the policy rate should develop in the future regardless of whether we publish it or not. If it turns out that we have made an incorrect assessment in our forecast, it would not have been less incorrect just because we had refrained from telling anyone about it. It is hardly reasonable that we should try to gain greater credibility by hiding things or sending unclear signals about one of the most important variables in our analysis. I believe it is better that we are open about what our decisions are based on, now that the inflation target is so well-established that we are able to be open.

We have so far only presented two forecasts for the policy rate, and as I mentioned earlier, there is a fairly large measure of ”learning by doing” for all those involved before everything falls into place. Everything does not always work perfectly from the start. But as I said, the purpose is that our communication will become clear and more efficient. And I am fairly convinced that we will get there, once the new system has been established. Clarity in the way we express ourselves in speeches and press releases The Riksbank has also changed its method of signalling monetary policy in speeches and press releases. In a broad sense, signalling means that we communicate in some way what we are intending to do with the repo rate. A narrower – and perhaps more common – interpretation of signalling is that it is when representatives of the Riksbank describe in speeches and press releases how they consider the interest rate should be set at the next meeting, and perhaps slightly further ahead. Previously, the Riksbank signalled ”by degrees”. Between the monetary policy meetings the individual Executive Board members held speeches on the theme of "the current situation” or something similar. There we indicated, more or less explicitly, how we thought the interest rate should be set.
The contribution of the Central Bank to this transition has been a more expansionary monetary policy that has smoothed the cycle and supported the depreciation of our currency, within a flexible exchange rate scheme. Although such depreciation has transitorily increased inflation, it has aided the necessary resource allocation across sectors. All this has occurred in a context where inflation expectations and monetary policy credibility have remained intact. As I mentioned, this Report’s baseline scenario foresees inflation declining further, to converge to 3% somewhat sooner than we thought in June. This assumption estimates that, in the short term, the exchange rate will remain around its levels prevailing at the last statistical cutoff date. But of course, there are significant degrees of uncertainty, so the risks are still there. One of our concerns in June regarding the external scenario was the so-called Brexit. However, and quite unexpectedly, its approval increased the markets’ perception that the developed world’s monetary policies would stay highly expansionary for a longer period of time, driving global financial conditions, particularly those facing the emerging world, to be more favorable than we assumed in the first half of the year. Despite a partial reversal in recent weeks, the mood of the markets is better than anticipated, even considering that the Federal Reserve is expected to raise its monetary policy interest rate again. Services inflation—typically associated with non-tradables—has not changed much and is expected to continue decelerating gradually.

This is the main reason for the expansionary nature of our policy making in recent years, even with inflation being persistently above the target range. Keep in mind that the fiscal rule determines a generally acyclical public expenditure, meaning that it runs independent from the business cycle. Why? Because fiscal policy is typically slow to react and any change in spending decisions are much more difficult to undo. Thus, monetary policy is essential to deal with the economy’s cyclical fluctuations. That explains our actions. Since late 2013 we have implemented a clearly expansionary monetary policy, indeed one of the most expansionary among emerging market economies. Real short-term interest rates have been negative or barely above zero for all this time, helping medium- and long-term rates to be nearly as low as they have ever been. This policy has not only helped the economy to adjust smoothly by providing support to aggregate demand; by letting the exchange rate move freely it has also contributed to the adjustment of relative prices—a key element to address in these conjunctures. The contrast with other episodes is evident. Suffice it to recall the costs associated with the defense of the exchange rate in the early 1980s and, to a lesser extent, during the Asian crisis and its aftershocks in the late 1990s.
While not establishing a statistically reliable trend, these figures provide at least tentative support to the hypothesis of an upward level shift in the equilibrium price range of oil (see Figure 2). For a central bank concerned with maintaining price stability, it is important to examine such a hypothesis in some detail. My remarks today will initially focus on a number of factors that support the equilibrium price level shift argument. I will then briefly examine to what extent information extracted from the oil market confirms the hypothesis of a persistent level shift in oil prices. Finally, I will discuss how higher oil prices affect aggregate output and inflation and consider their consequences for monetary policy with a brief reference to the current economic situation and monetary policy challenges in Switzerland. 2. Oil price level shift hypothesis  Demand and supply of oil are strongly affected by increasing global integration. Throughout the 1980s, the relationship between oil prices and economic output was characterized by a largely one-way causal effect from oil prices to economic growth. Today, the opposite dynamic appears to have become more relevant. The demand for oil and the price of oil is increasingly a function of global economic developments. In other words, an increase in the price of oil can be viewed as a consequence associated with an acceleration of global economic growth. A simple statistical calculation provides evidence of a structural break in the relationship between world GDP and the price of oil in 1995.

Ravi Menon: Monetary Authority of Singapore at forty Welcome address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS 40th Anniversary Dinner, Singapore, 28 November 2011. *  *  *  Prime Minister, Lee Hsien Loong Deputy Prime Minister and Chairman MAS, Tharman Shanmugaratnam Distinguished guests, ladies and gentlemen, Staff and management of MAS are delighted to welcome you to our 40th anniversary celebrations. 1. one. An anniversary is a good time to thank all those who made the journey a successful  First, we thank the past leaders and staff of MAS 2. Economic and financial stability that Singapore has enjoyed over last 40 years is result of tireless efforts of generations of MAS officers. 3. The pioneers, led by our first Chairman, Mr Hon Sui Sen, and first Managing Director, Michael Wong Pak Shong, laid the foundations for an integrated central bank and financial regulator while navigating a turbulent global environment – the collapse of Bretton Woods, global recession, and double-digit inflation. 4. With Dr Goh Keng Swee as Chairman at the start of the 1980s and Mr Lim Kim San and Mr Yong Pung How as Managing Directors, MAS adopted the exchange rate as the principal tool of monetary policy, at a time when the conventional tools were monetary aggregates and interest rates. 5.
Philipp M Hildebrand: Monetary policy challenges – Swiss exports in a globalised world Speech by Mr Philipp M Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Mission to the European Union, Brussels, 23 November 2010. *  *  *  I would like to thank Caroline Schmidt and Rita Kobel Rohr for their valuable support in drafting this speech. 1. Introduction  I am pleased and honored to speak to you today at the Swiss Mission to the EU. Thank you for the invitation and the warm welcome. In the past few decades, globalisation has had a deep impact on the world economy. Whether the world has indeed become “flat”, as Tom Friedman put it, remains to be seen. Certainly, the notion of a “global village”, in which all aspects of life are ever more interconnected, is an apt description of our world today. One of the areas most affected by globalisation is the world economy, which has become highly integrated. This is due not only to technological innovation, but also to the fact that countries have deliberately opened up their economies; a phenomenon witnessed around the globe in recent decades. The results – greater trade and financial flows – have brought many countries enormous prosperity. This applies to the EU and it certainly applies to Switzerland with its small home market. However, the most recent financial and economic crisis has clearly demonstrated that the growing integration of the world economy also entails a number of risks.

But even for exports of processed metal goods and machinery does Switzerland have higher export unit values than, for instance, the EU. 15  Looking at developments over the last 20 years, it is primarily the prices of watch exports that have risen considerably. 16  Ireland also exports a lot of chemical and pharmaceutical products. Besides, the unit values of its exports of electronic products are also very high. 6  BIS Review 157/2010  Chart 3  Source: Eurostat. Overall, the results from a unit value analysis support the assessment that Switzerland is specialised in the production of high quality products. This is in line with previous studies. These show that Swiss export products largely compete on quality, rather than on price. 17 Given the level of know-how in Switzerland, this ought to be the case in the future as well, assuming that Swiss products can continue to fulfil the ever-growing demands on quality. To what extent could this have had a positive influence on the way in which exports developed in the most recent crisis? For the short term, at least, it can be assumed that higher quality products are more difficult to substitute than relatively homogenous goods. This applies not only to pharmaceuticals, but also to highly specialised products such as precision instruments. And this was indeed the case during the most recent crisis – Swiss exports of precision instruments receded only slightly, and have since risen to such an extent that they now already exceed their pre-crisis level.