samchain/econo-pairs-v1 huggingface dataset:
But we do know that there will be new processes and products and that the industry structure will change in directions that cannot be foreseen now. Nor can we exclude the possibility that Norway may enter a lengthy period of stagnation, for example when the petroleum sector is scaled back. Another lesson is that price stability is not self-generating. In the event of substantial disturbances and an unsuccessful economic policy, the economy may lose its nominal anchor. As a result, inflation may accelerate or be too low or negative, and production may become very unstable. As the country’s central bank, we take our work to safeguard price stability very seriously and we will continue to work towards this end. We set the key rate from month to month while keeping in mind the three-year horizon, but the objective is to generate confidence in stability in the value of the krone in the long term. Those of us who are still alive at the turn of the next century, will see if we achieved this objective. 2  BIS Review 43/2005

Alan Blinder has deftly set out 1 a spectrum of decision taking structures ranging from one individual, the Governor; through committees that are more or less collegial, with either a clear leader or a more collective approach; to committees, such as the Bank of England’s MPC, that are individualistic. Blinder and others identify advantages in a committee approach of some kind, essentially on the grounds, based on analysis or experiment, 2 that committees will generally make better decisions. That may leave out something rather important. Which is that in some countries a committee structure has been a pre-condition for achieving central bank independence in the first place. And that is a useful reminder of the political economy conditions in which monetary regimes are constituted and operate. Context matters, including possibly to some of the issues on your conference agenda. The UK’s post-war journey to monetary credibility illustrates that rather neatly. Environmental preconditions for independence: ideas and values For a long time, price stability simply was not the core objective of macroeconomic policy. A Bank of England piece in the late 1960s 3 described government’s twin goals as having been to improve trend growth and maintain high employment, to which was subsequently added balance of payments sustainability. When, in the mid-1970s, the UK suffered the indignity of having to borrow from the IMF, the Cabinet split over the Fund’s stability-oriented programme.
There is considerable uncertainty surrounding the calculation of the output gap, and there is no simple relationship between developments in the output gap and developments in inflation. It cannot therefore be claimed with any great certainty that it is possible to identify one particular interest rate forecast that provides the indisputably “best” trade-off in monetary policy. More often than not, there will be a number of possible interest rate paths that might be said to provide a reasonable balance, in view of the uncertainty involved. Norges Bank’s treatment of the interest rate in forecasting has changed over time. In 1999 and 2000, forecasting was based on the assumption that the interest rate would develop in line with market expectations as indicated by forward interest rates. In 2001 and 2002, the Bank based its forecasting on the assumption that the interest rate would remain constant to the end of the projection period. The constant level of the interest rate was calculated on the basis of historical averages, although the historical period on which the calculations were based could vary from one period to the next. On some occasions, the interest rate assumption reflected the average for the interest rate over the previous three months, on other occasions, the average for the previous month. From mid-2003, the interest rate assumption was again linked to market expectations, and in autumn 2005 we published our own interest rate forecast.

I would like to note that like other central banks, we also have considerations regarding the temporary nature of price movements resulting from supply shocks. While maintaining the tight monetary policy focusing on demand factors and their consistency with our medium-term inflation target, we will be giving more weight to decomposing the effects of supply shocks in the upcoming period. Before I finish my evaluations on inflation, I would like to make a few notes on the pricing behavior. Recently, price increases in certain products have exceeded their historical averages. When we look into the products that made the highest contribution to inflation, we observe that in August, annual price increases in those products exceeded the average price increases of the last 10 years by more than three to four times. Although one reason for this situation, as I mentioned before, is developments such as the pandemic-led increases in commodity prices and supply constraints, these factors alone may not fully explain the price increases in some products. However, we consider that such pricing behavior will converge to its pre-pandemic level as the economic and social normalization gains pace in the upcoming period. Lastly, when we look into exchange rate developments, we see that the improvement in our reserves is consistent with our forecasts. Reserves increased by USD 30 billion from USD 85-90 billion to USD 115-120 billion. Swap agreements, rediscount credits, gold ore purchases and reserve requirement steps have been the primary factors contributing to reserves.
This is how the Riksbank formulated the inflation target when it was announced in 1993. One can say that the task of ensuring that prices remain stable has been delegated by the Swedish people through the Riksdag (Swedish parliament) to the Riksbank. And this is actually not merely an objective, it is also a means. By keeping inflation low and stable, monetary policy is to help to create the best possible conditions for good and sustainable economic growth. Delegating monetary policy to the central bank in the way the Riksdag has done in Sweden also reduces the risk of political pressures, short-sighted actions and rapid changes in monetary policy. Our focus – what governs our interest rate decisions – is on attaining the inflation target within a couple of years in a way that provides the most balanced development of the economy possible. This was also the case at our most recent monetary policy meeting in September, when the repo rate was raised to 4.75 per cent. It was a difficult situation in which to make a decision, with high inflation both in Sweden and abroad at the outset and a very uncertain world economy. Although we Executive Board members agreed on many things, our assessments differed with regard to the interest rate path needed to bring inflation back on target at a suitable pace. Although the differences in our assessments were actually fairly modest, it is extremely important to be clear about both the common and individual motives behind the stances taken at the meeting.

In Sweden, the Riksbank has regularly highlighted many of the risks in the financial system. We did so most recently in our Financial Stability Report. There we pointed out, for instance, that the financial turbulence might worsen and that the banks' access to funding could deteriorate. At the same time, we have all along made the assessment that financial stability in Sweden has been satisfactory. We make the same assessment now, and the Swedish banks are financially strong. 2  BIS Review 115/2008  As we have seen, a lot has happened on the financial markets recently. We are following developments closely, constantly updating our analyses and we are prepared to take action if necessary. We have regular contacts with banks, market participants and other government agencies, as well as our central bank colleagues in other countries. There is a generally high level of uncertainty in the world economy at present and this will probably persist for a good while to come. I would therefore like to return now to what I mentioned at the beginning – the inflation target and the stability it offers to the economy, particularly when storms are raging all around us. Monetary policy – focus on the inflation target The objective of monetary policy is to maintain price stability and this has been established by law since 1999. To be more precise, inflation measured in terms of the consumer price index, CPI, is to be held at 2 per cent, with a tolerance interval of +/- 1 percentage point.
Real GDP  percent  10  percentage change  8  -2  6 -4 4 -6  2  -8  0  -10  –2 –4  -12 –6 -14  –8  -16  *) including reinvested profit  2011*  2010*  2009*  2008  2007  Source: National Institute of Statistics, National Commission of Prognosis  4. Real exchange rate  3. Inflation rate (Dec./Dec.) percent  2006  *) forecast  **) forecast  Source: National Bank of Romania, National Institute of Statistics, National Commission of Prognosis  12  2005  2004  2011**  2010**  2009**  2008  2007  2006  2005  2004  – 10  lei/EUR; real percentage change, percent 25 based on CPI  *) forecast Source: National Bank of Romania, National Institute of Statistics  16  2009*  2008  -5 2007  0  2006  0  2005  2  based on PPI  2004  5  2010*  4  2009*  10  2008  6  2007  15  2006  8  2005  20  2004  10  *) forecast (-) appreciation / (+) depreciation Source: National Bank of Romania, National Institute of Statistics, National Commission of Prognosis  BIS Review 5/2010  References Backé, Peter, Égert, Balasz, and Zumer, Tina: “Credit Growth in Central an Eastern Europe: New Overshooting Stars?”, ECB Working Papers, No. 687, 2006.

Banking integration In banking, the key achievement is the establishment of the ASEAN Banking Integration Framework (ABIF). •  ABIF provides a platform for Qualified ASEAN Banks to enjoy greater market access and operational flexibility. •  Banking liberalisation under the ABIF can be done on a bilateral basis and customised accordingly. •  Two ASEAN countries can agree on specific areas to be liberalised based on the Qualified ASEAN Banks’ commercial interests. ABIF will complement the broader economic integration of ASEAN. •  As ASEAN economies develop further, their corporates will expand their operations into the region. •  The banks who have been servicing these corporates in their home markets are well placed to follow their customers and support them as they regionalise. BIS central bankers’ speeches  3  •  ABIF will provide them an enhanced vehicle to do so. More importantly, ABIF will be a vehicle to help grow a group of strong pan-ASEAN regional banks with the scale and the capability to compete alongside the global banks. As ASEAN becomes an economic powerhouse, so must our ASEAN banks. Looking ahead, a key priority for banking integration will be to help banking groups with operations in several ASEAN countries to share and transmit information across borders. •  For banks with pan-ASEAN operations, the segregation of data and systems in multiple countries due to data on-shoring requirements may hinder effective group risk management and raise data security concerns.
That said, there are measures that should be studied to reactivate credit for the entire economy and, in particular, to SMEs and to the exporting sector. The European Investment  4  BIS central bankers’ speeches  Bank has the means to stimulate loans to SMEs through an increase in its funding to European public-sector banks operating in this area. New arrangements could also be studied for risk-sharing using European funds, for example structural funds, a possibility that is already under discussion. And specific schemes to boost export credit could be studied. Within the Eurosystem, the Banco de España has always been in favour of initiatives geared to supporting more and cheaper credit, through unconventional monetary policy measures that help restore the monetary policy transmission mechanisms. But we know that the normalisation of credit will not come about, or will be slower and difficult, if we do not complete the clean-up and reinforcement of the solvency of our banking system. This is why it is important to clearly understand what has been done in 2012 to overcome the crisis and to evaluate the current state of affairs. Clean-up, recapitalisation and restructuring of the banking system and financial reform I shall focus on the six issues that afford us an overview of the situation: the clean-up efforts in 2012, the strengthening of solvency, the improved liquidity position, developments in nonperforming loans, expectations for results in the current year, and, finally, regulatory changes approved in 2012. Clean-up Firstly, balance sheet write-downs.

The debate will be moderated by Mr. Valentin Lazea, the National Bank of Romania Chief Economist. Thank you for attending this conference, which I do hope will turn out to be a very successful one. 2  BIS central bankers’ speeches
A breakdown of banks by size Against this background, it is not surprising that banks’ balance sheet constraints played a greater role during the recent financial turmoil, leading to a tightening of credit standards by banks, as shown in Chart 2. The bank lending survey for the euro area, from which this information is taken, distinguishes between large banks and smaller banks. In particular with respect to the greater relevance of smaller banks for SME financing, it is therefore of interest to distinguish between the lending  2  BIS Review 129/2009  of large banks and that of smaller banks in the euro area. Since mid-2007, and in particular during the initial phase of the financial turmoil, large banks have overall tightened their credit standards for loans to enterprises somewhat more than smaller banks. The outlook for the economy in general and for individual firms contributed most to the tightening, in Italy as well as in the euro area as a whole. The deteriorated access to capital market financing during the financial turmoil contributed significantly to the tightening of credit standards. It played a much more important role for large banks than for smaller banks, which rely less on capital market financing. The difficult liquidity conditions in the market also played a somewhat more important role for large banks, possibly because money market financing represents a greater share of their overall financing. All this may explain why the net tightening of credit standards was greater for large banks than it was for smaller banks.

The importance of central clearing for central banks and their monetary policy mandate So precautions have to be taken to ensure that CCPs do not become a weak point for monetary policy and the currencies issued by central banks. CCPs can pose significant risks to the smooth operation of payment systems and to monetary policy transmission in times of market stress. Let me give you some examples. Market volatility or failures in CCPs’ risk management may affect liquidity within the financial system and that of CCP users, who are typically monetary policy counterparties and key 1/5  BIS central bankers' speeches  participants in payment systems. In extreme situations, liquidity shortfalls could foster contagion and lead to CCPs and banks becoming distressed. This could mean the ECB needs to provide liquidity to systemic CCPs or to their members to ensure that payment systems continue to function smoothly and that monetary policy can be transmitted effectively. It is clear that, in such cases, liability and control need to be well aligned: the ECB must be able to monitor and control the risks posed by CCPs. CCPs are also directly relevant for payment systems. Cleared markets represent a significant share of financial markets as a whole, meaning that CCPs are settling large payment volumes. In order to ensure that payment systems continue to function smoothly, the ECB must ensure that CCPs have appropriate arrangements in place for liquidity management and settlement in euro.
International support of the New Partnership for Africa’s Development (NEPAD) had led to some increase in aid in 2002; the trend was expected to continue in 2003 (OECD, ADB). The future outlook in the performance of the real sector is set to improve due to: •  low production costs (labour, electricity, and water, among other inputs);  •  comparative advantage in areas such as specialised agricultural production;  •  Numerous investment opportunities are available in the mining sector, which remains largely untapped, despite the richness and variety of minerals in Africa. The scope for improvement of environmental sustainability in Africa, hence economic growth is extremely vast;  •  Expansion of markets through regional integration within Africa with necessary networks will facilitate for increased capacity utilisation among existing and potential productive businesses; and  •  Additional areas of improvement include the expansion of hydroelectric power facilities along the major rivers such as the Nile, Congo and Zambezi to provide a viable source of clean energy to the majority of the population, which presently primarily relies on biomass fuel.3  For the African continent to embrace the potential benefits of globalisation, it is vital for African countries to implement supportive fiscal and monetary frameworks that promote investment. Prudent policies in these areas provide an important contribution to macroeconomic stability, a key prerequisite for economic growth. In addition, African countries must now commence the process of adding value to their export products as they compete and interact with a global market. 5.

The more efficiently euro area product and capital markets function, the greater the success of labour market reforms will be in creating employment opportunities. We are now at your disposal for questions. 2  BIS Review 15/2002
Doing so is normalization, lifting our foot from the accelerator pedal. In my view, we could be there before the end of the year, after another significant step in September. Only beyond R* could tightening—actively pushing the brakes—begin; we will then have to discuss and decide, based on our assessment of actual inflation and the future outlook, focusing in particular on its core part and on wage developments. The US is obviously closer to tightening due to several differences in the nature of inflation there. But have no doubt that we at the ECB would if needed raise rates further beyond normalization: bringing inflation back to 2 % is our responsibility; our will and our capacity to deliver on our mandate are unconditional. III. How to remunerate massive excess liquidity when it coexists with positive rates? Let me come to another issue that we practitioners must now confront: how to remunerate massive excess liquidity when it coexists with positive interest rates? This will be a new situation for most of us, and especially for the euro area. While excess liquidity was negligible until 2008, it currently stands at more than € trillion, as a legacy of our APP and PEPP assets purchase programs, but also, for one third, our TLTROs. Yet, our reserve remuneration system was designed at a time of negligible excess liquidity. The system already showed its limits in the past, when having to coexist with negative interest rates.

Being gradual is less important than being orderly As William Brainard famously argued more than 50 years ago, gradualism is appropriate in a situation where we face large uncertainty. viii However, the Brainard principle was formulated before monetary economics understood the importance of inflation expectations. Research at Banque de France shows that a central bank facing instrument uncertainty is bound to be overly cautious if it fails to appreciate that being gradual runs the risk of moving inflation expectations adversely. ix We can be gradual, but we should not be slow and delay normalization until higher inflation expectations force us into aggressive interest-rate hikes. What remains essential however is to be orderly, in order to avoid undue market volatility and ultimately economic volatility. Like a gradual normalization, an  Page 6 sur 8 orderly one has a time dimension, as we should avoid putting risks on financial stability through unnecessarily brutal interest rate changes. x But it also has a cross-country dimension, as it also implies avoiding within the euro area unwarranted country-specific spikes in borrowing costs that only emerge from the echo chamber of financial markets. In this respect, our new Transmission Protection Instrument (TPI) is a very powerful tool for an orderly path forward. II.C. How to deal with surprises: a reaction function So far, so good about being orderly or predictable… but uncertainty means surprises, and we have had to deal with many bad ones on inflation figures.
16.11.2018  Remarks - First panel: “Central banks, macroeconomic stability and economic growth” Banco de España and European Institute of the Mediterranean with the support of the Central Bank of Tunisia Pablo Hernández de Cos Governor  In this first session of the conference we will focus on the role of central banks on both shores of the Mediterranean in contributing to the achievement of sustainable growth in the long term. Before giving the floor to our distinguished speakers, let me say a few words about the current global outlook and their implications for economic policymaking. At present, the global economy seems to be approaching its cyclical peak while the process of monetary policy normalization in the advanced economies continues, particularly in the United States. This process should normally precede the tightening of global financial conditions. At the same time, tensions in international trade remain, with the risk that disputes in this area will be solved with a greater use of protectionism to the detriment of a multilateral approach to the resolution of these conflicts; and, elsewhere, the markets of some emerging economies that had significant macroeconomic imbalances have undergone episodes of severe turbulence. We are therefore facing a phase of growth moderation with limited scope for economic policies. It would seem necessary to harness the current moment in which growth records are still satisfactory in order to generate margins that allow a certain countercyclical gearing of economic policies in the future.

Norman T L Chan: Master’s degree 2009–2010 graduation ceremony Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at The Chinese University of Hong Kong master’s degree 2009–2010 graduation ceremony, Hong Kong, 17 December 2010. *  *  *  Professor Wong, Professor Lee, Faculty Members, Graduates, Ladies and Gentlemen, It is a great honour to be invited to speak at today’s Graduation Ceremony. I am so happy to see so many fine men and women graduating today. All of you have made well earned accomplishments that make your parents and families feel very proud. On this joyful day, it is clearly a time for celebrations and photograph-taking with families and friends. However, some of you may, when you have a few quiet moments of your own, ask yourselves these questions : What would I become in 10, 20 or 30 years’ time? Have I chosen the right field or career? What does it take to succeed and make a name in the society as so many of my CUHK seniors have done before me? These are very pertinent questions and certainly I did ask myself these questions when I attended my own graduation ceremony in the CUHK some 34 years ago. In talking about successful people, I am sure all of us have our own idols. But very few people will disagree with me if I refer to Bill Gates as a prime example of success.