samchain/econo-pairs-v1 huggingface dataset:
The ECB orients monetary policy to maintain price stability, which has been defined as inflation of less than 2 per cent. 8  BIS Review 19/2001  In recent years, cost inflation in the euro area countries and among trading partners has been relatively low. Growth in labour costs in Norway has been roughly 11 percentage points higher than in the euro area and 10 percentage points higher than among trading partners for the past three years. A number of other small, open economies have recorded a decline in unemployment and lower growth in labour costs than Norway. In Sweden, unemployment has shown a substantial decrease over the past five years and wage growth is below 4 per cent. Three-year wage agreements are now being concluded, underpinning the basis for low cost inflation. In the Netherlands, unemployment has fallen to a very low level. Wage growth has picked up, but is lower than in Norway. In Denmark, unemployment has come down without an increase in wage growth. In Finland, unemployment has fallen sharply from the high level that took hold in the 1990s, and wage growth has slowed. In the euro area, unemployment has dropped without an increase in wage growth. In Norway, the high growth in labour costs may be a source of rising unemployment. Interaction with fiscal policy It is important that the annual budgets are based on a long-term strategy that takes into account possible fluctuations in oil revenues from one year to the next.

Local banks' upgrading and consolidation Since the first liberalisation package was announced, the local banks have made progress in building up their capabilities. They have generally strengthened their management teams, and invested heavily in infrastructure to provide banking services more efficiently, especially via electronic channels. They have improved their customer relationship management systems, which will allow more effective data mining of their customer databases and cross-selling of multi-sector products. Local banks have also been seeking opportunities and expanding their presence in the region. An important and more visible sign that local banks are gearing up for competition is of course the process of consolidation that is underway. The opening gambit was made on 12 June when OCBC announced that it was making a voluntary general offer for Keppel Capital Holdings which owns Keppel TatLee Bank. Ten days later, DBS made an unsolicited bid for OUB. And just three hours ago, UOB made a competing bid after reaching agreement with the controlling shareholders of OUB. All the local banks are now busy reassessing their positions. It is likely that a new configuration will quickly crystallise. MAS views this as a very positive development for the banking industry, and more importantly for Singapore. If the consolidation is well executed, a stronger group of local banks will emerge, able to hold their own domestically, provide Singaporeans with better services, and compete in the region. Let me elaborate. The importance of consolidation Economies of scale have become critical in banking today.
In addition, the fiscal 2016 budget package passed at the end of last year, which extended a number of tax breaks and eased caps on spending, means that fiscal policy should provide a moderate stimulus this year. I believe that these positive factors should be sufficient to offset weakness in manufacturing and business-fixed investment. Putting this all together, I expect real GDP growth of about 2 percent in 2016, slightly below the average pace of growth in this expansion, and a bit above my estimate of the potential growth of the U.S. economy. If this materializes, then we should see some further reduction in the unemployment rate to around my estimate of the rate – about 4¾ percent – that I view as consistent with stable inflation over the long term. Turning to the outlook for inflation, headline inflation on a year-over-year basis has begun to rise as the sharp falls in energy prices in late 2014 and early 2015 are removed from the calculations. However, inflation still remains well below the Federal Reserve’s 2 percent objective. As the FOMC has noted in its statements, this continued low inflation is partly due to recent further declines in energy prices and ongoing impacts of a stronger dollar on nonenergy import prices. Although energy prices will eventually stop falling and the dollar will stop appreciating, these factors appear to have had a more persistent depressing influence on inflation than previously anticipated.

We supplement this survey evidence with assessments from internal models. These models are data-driven and estimate percentiles of the distribution of possible forecast outcomes for growth and inflation. Our estimated models have indicated a greater degree of uncertainty than reflected in the U.S. SPF, and suggest downside risk to both the growth and inflation forecast. BIS central bankers’ speeches  3  But, I would caution that these models are still relatively new in terms of their development and their results need to be supplemented by judgment. Now, putting these inputs and my judgment together, I see the uncertainties around my forecast to be greater than the typical levels of the past. This assessment reflects the divergent economic signals I highlighted earlier, and is consistent with the turbulence we have seen in global financial markets. At this moment, I judge that the balance of risks to my growth and inflation outlooks may be starting to tilt slightly to the downside. The recent tightening of financial market conditions could have a greater negative impact on the U.S. economy should this tightening prove persistent and the continuing decline in energy and commodity prices may signal greater and more persistent disinflationary pressures in the global economy than I currently anticipate. I am closely monitoring global economic and financial market developments to assess their implications for my outlook and the balance of risks. U.S. Monetary Policy in a Global Environment Thus far, my remarks have focused on the U.S. outlook and the risks relative to this outlook.
It is unlikely to make sense to have 15 (and certainly not 25) teams of economists analysing the causes of changes in the velocity of euroM4. But I do not wish to give the impression that EMU, even if it comes about on something roughly approaching the current timetable, will be the ‘end of history’ as far as European central banking is concerned. I suspect that central banks in Europe will continue to display great diversity, and will continue to evolve in different directions, and at different speeds, in response to the characteristics of their local habitat. What is important is that they should be responsive, learning and self-critical organisations, ready to react quickly to changing circumstances. They must also, in my view, display their accountability, perhaps more so than in the past. With the greater responsibilities which European central banks, East and West, have assumed in recent years, comes a greater need to explain the basis on which decisions are made, and to account for the resources deployed in making those decisions. That accountability runs partly to the Treasury, who exercise financial discipline over us, partly to Parliament - whose growing interest in our affairs we welcome - and partly to the broader community. I see this series of lectures fitting within that context, and have been pleased this evening to have the opportunity to set out some more recent reflections, from within the Bank, on the way we exercise our functions on the people’s behalf.

Whereas monetary policy requires a highly trained but small cadre of economists in the head office of the central bank, large numbers of supervisors are needed, often spread across the country, to deal with a multitude of new banks with poor quality accounts. And the skills of assessing risk and the quality of management have not always come easily to staff from a bookkeeping background whose instincts are to tick boxes rather than make judgements. Staff who have acquired the skills needed are frequently enticed away to work for commercial banks at higher salaries. (iii) Managing government debt Another field in which central and eastern European central banks are generally more heavily involved than their western counterparts is in the management of government debt. (Hungary, where there is a separate debt office under the Ministry of Finance, broadly on the Irish model, is again an exception.) Under the old regimes governments relied on their state banks for finance, but the new statutes of the central banks - usually following an IMF model limit the provision of finance to government. Ceilings are mostly around 5% of government revenues, though in Estonia and Lithuania they are zero. With monetary financing restricted, new methods of financing governments have had to be developed and nearly all the central banks have taken a leading part in this process. Even where the government’s own financing needs have been small, as in the Czech Republic, central banks have been keen to establish markets in short-term paper in which they can conduct monetary operations.
Durmuş Yılmaz: Recent economic and financial developments in Turkey Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the press conference for the presentation of the Inflation Report, Ankara, 30 April 2009. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference for the presentation of the April 2009 Inflation Report, one of the most important communication tools of the inflation-targeting regime. The report typically elaborates global and domestic macroeconomic developments and presents the medium-term inflation forecasts revised in line with the previous quarter developments. It also presents six boxes examining the recent monetary policy decisions and the relevant economic developments. Now, I would like to give you a short summary of our evaluations and the Central Bank’s revised inflation forecasts in the Inflation Report, which will be posted on the CBT website today. 1. Inflation developments  Distinguished Members of the Press, The world economy has been undergoing a period dominated by dynamics quite unlike to those of previous years. With the loss of confidence resulting from the on-going financial crisis, the global economy entered a significant contraction trend after a long period of time. Impacts of the crisis on real economic activity deepened in the first quarter of 2009. Thus, inflationary pressures, which were perceived as a major concern until the last quarter of 2008, were overtaken by fears of deflation in developed countries in the first quarter of 2009.

The lagged effects of dips in international oil prices had a favorable impact on transport services in the first quarter. Rental price movements remained quite below the averages of previous years due to the contraction of domestic demand. The prices of the restaurants and hotels group also followed a similar course owing to shrinking demand and decelerating food prices (Figure 5). I would particularly like to draw attention to the decrease of annual rent inflation. Seasonally adjusted data point to a continual and accelerating downward trend in rents in the first quarter of the year. The slowdown in services prices is expected to continue in the upcoming period as well. BIS Review 67/2009  3  Figure 4: Services Prices  Figure 5: Services Prices  (Annual Percentage Change)  (First Quarter Percentage Change)  Other Services Transportation Services Rent Restaurants and Hotels  21 18  6 2006-2007 Average  2008  2009  5 4  15  3  12  2  9  1  6  0  3 0  -1 -2  03 05 07 09 11 01 03 05 07 09 11 01 03 07 07 07 07 07 08 08 08 08 08 08 09 09  Source: TURKSTAT, CBT. Other Services  Transportation Rent Services  Restaurants and Hotels  Source: TURKSTAT, CBT. The first quarter saw a significant decline in the prices of durables excluding gold (Table 1).
A sound economy must be based on well-functioning real and financial sectors, and there can be no doubt that, in times to come, we will have to give still more thought to reducing financial risks and keeping them from interfering with the proper functioning of the system. If competition, volatility, globalization, and stresses threaten to pressure the banking industry into resorting to bad risk-taking practices, the responsible authorities and supervisors must take whatever steps are necessary to restore financial stability. 5  BIS Review 41/1999

they do not focus only on stabilising inflation but also take account of real economic developments and possibly other factors too. However, the present degree of flexibility in inflation-targeting policies has probably not always been regarded as so obvious as it is today. At least as far as Sweden is concerned, I think I am right in saying that it has been a gradual process that has brought us to where we are today. That is probably also true for many other inflation-targeting countries. Immediately after the announcement of the inflation target in 1993, the Riksbank tended to formulate policy as if the intention was to be anything but flexible. This may have been because the credibility problems in the 1970s and 1980s were considered damaging and were deemed to warrant “tough talk”. Whether it was a wise strategy to begin in this way with a one-sided focus on inflation is perhaps open to question. One could argue that it would have been better to choose a more balanced line from the outset. It might then have been possible to counteract some of the criticism levelled at the Riksbank for supposedly “focusing exclusively on inflation and completely disregarding employment”. From the mid-1990s and onwards, though, the Riksbank tried in various ways to clarify that we were not focusing solely on stabilising inflation. I believe it is correct to say that the implementation of policy also began to become more flexible around that time.
In the early days, that led to a concentration of liquidity provision amongst the largest incumbent banks, eager to grow volumes and able to afford the expensive high-speed equipment required. More recently, however, some of those firms have exited or downscaled as the scope to deliver returns from traditional business models has fallen. And a number of non-bank providers have emerged, focused less on providing balance sheet capacity to the market, and more on exploiting new technology. Taken together, this has driven a renewed dispersion of market share (Chart 2). In 2009, the number one provider in Euromoney’s annual FX survey saw nearly ten times the flows of the number ten firm. Today that ratio is just two. Chart 2: Falling concentration amongst liquidity providers  Source: Euromoney FX surveys. 3  https://www.globalfxc.org/global_index.htm, adjusting for duplicate entries reported to more than one national index. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  There’s been an even bigger revolution in trading platforms, as the share of trading routed through liquidity providers’ single dealer offerings and the traditionally dominant primary venues has fallen, and business has increasingly migrated towards multi-dealer platforms, which allow users to put multiple chosen providers into competition on a single site (Chart 3). Chart 3: Platform use as a share of spot FX turnover in the London market4  Source: London Foreign Exchange Joint Standing Committee surveys and Bank of England calculations.

Table 1: Key flash episodes over the past decade  Year  Asset class  Markets  Price move  Duration (minutes)*  2010  Equities  S & P 500  -6%  5  2011  FX  USD/JPY  -4%  4  2014  Bonds  US Treasuries  +37bps  5  2015  FX  EUR/CHF  -41%  20  2015  FX  NZD/JPY  -10%  10  2015  FX  USD/EUR  -2%  4  2016  FX  ZAR/USD  -9%  15  2016  FX  GBP/USD  -9%  1  2017  Bond futures  French OAT  -11bps  1  2018  FX  ZAR/USD  -9%  1  2019  FX  USD/JPY  -4%  4  2019  FX  TRY/JPY  -10%  7  Sources: Bank for International Settlements, Bank Underground, Bloomberg Finance L.P., Cielinska,O, Joseph,A, Shreyas,U, Tanner,J and Vasios,M (2017), ‘Gauging market dynamics using trade repository data: the case of the Swiss franc de-pegging’, Bank of England Financial Stability Paper No. 41, Financial Times, International Monetary Fund, MarketFactory, Inc., Nanex, Reserve Bank of Australia, Securities and Exchange Commission and Bank calculations. *Approximate time space in which price moves from prevailing price to a new low (or high) price.
200 million Chinese will migrate from villages to cities and find employment in industry — to a large extent in export-oriented industry sectors — and in services. This means that over the next 10 years, every month one to two million Chinese on average will give up their low-paid, low-productivity jobs in agriculture and take up betterpaid and more productive work in other sectors. The monetary policy must take into account the impact that this process is going to have on the Chinese economy and on economies of other countries. As opposed to trade and capital, the flow of people within EU Member States was stable. The annual net migration to EU-15 remained at a level of less than 5 people per 1000 inhabitants over the past 40 years. Approximately 9% of EU population was born in other countries, whilst in the USA this figure was 12% and ca. 20% in Canada and Australia. However, following the EU enlargement, where 10 new members joined the structures, our part of the world has also seen an increase in migration, which is shown in Table 3 below. In some cases, a significant part of the domestic work force took up employment in other countries. The estimates show that, for example, ca. 5% of Lithuanians took up employment in countries that opened their labour markets for the new EU Member States following 1 May 2004. Table 3.

This has made fiscal policy predictable and sustainable over time as well as making it possible to keep public debt low. Indeed, thanks to a significant increase in copper revenues, this has dropped to a historically low level in recent years and gross central government debt is currently running at around 6% of GDP. All these factors have contributed to financial stability. Prudential regulation has been another key pillar of financial stability. It was completely redesigned after the severe financial crisis of the 1980s. The lessons of this crisis were learned and then incorporated into banking law and, although this has since been subject to updates and modernization, it has maintained the hallmark strictness it acquired in this period. Some of the recommendations put forward in the light of the recent crisis have, in fact, been part of Chilean regulation for some time.
Since then, the indicators have broadly tended to entrench expectations that output will continue to increase at positive rates in the immediate future; into the medium term, however, forecasts anticipate very moderate growth rates, which will be insufficient to allow a rapid reduction in euro area unemployment levels, which remain very high. The positive effects that the turn for the better in the external environment have had on the Spanish economy have been reinforced by the headway in the economic governance of the euro, enabling the serious confidence crisis that gripped the Monetary Union in 2012 to be overcome. Admittedly, though, the degree of fragmentation persisting in euro area financial markets is still high and is not allowing monetary impulses to be transmitted efficiently to all countries in the area. Indeed, the Spanish economy as a whole – households, firms, credit institutions and general government – continues to face financing costs which, though they have moderated, remain excessive when taking into account the strongly expansionary stance of the ECB’s monetary policy. In this respect we may recall that at the start of this month the ECB decided once again to cut its official interest rates, which are now at an all-time low. In combination with the continuation of the unlimited liquidity-providing policy it has maintained since the start of the crisis, the successive cuts in official rates have led money market interest rates to extremely low levels.

As a consequence, the bank capital framework de facto becomes a partial substitute means of achieving more forwardlooking provisioning, through the internal models regime for credit risk which requires the deduction from capital of expected losses in excess of provisions. A forward-looking approach to provisioning based on expected losses would help move to a more appropriate position where the accounting standard requires a prudent valuation of banking book assets and the capital regime can focus on unexpected loss. I hope that implementation of the new accounting standard for provisioning, IFRS 9, is a step in this direction. I now want to turn to the issues around risk-weighted assets in the capital framework. Basel I was a simple framework, as I described earlier. In my view, that was its strength and weakness. The strength was that it was quite easy (certainly by today’s standards) to see the balance sheets even of the largest banks laid out and broken down by broad risk weights. The weaknesses were two-fold. First, it provided little insight into how firms measured and managed risk. As a supervisor in the late 1980s and early 1990s, I remember well meetings with firms which would start by the firm reminding that while they had filled in the risk weighted assets form faithfully, it bore no resemblance to how they assessed and managed risk in the business – what is often called “economic” as opposed to “regulatory” capital.