samchain/econo-pairs-v1 huggingface dataset:
For the euro area I will say clearly: we need for cross-border banking institutions a European Resolution Authority, including or combined with a Resolution Fund, as well as a European Supervisor. This requirement is not only a necessity stemming from the high degree of interconnectedness among euro area banks, but  BIS central bankers’ speeches  5  constitutes also a major lesson of the present crisis. Indeed, some of the major imbalances that are besetting the euro area stemmed from uncontrolled behaviour of some banking sectors that eventually contaminated the sovereign. However, in the longer term, one can only envisage an integral EU resolution framework on a full EU basis, reflecting the highly integrated financial system in the EU. In parallel with the establishment of an EU resolution fund, we could gradually also start preparing to set up an EU-level resolution authority. Following a pragmatic approach, we could focus on the recently established Cross-Border Stability Groups. Common practical guidelines and blueprints could be prepared for them to foster a more harmonised approach for resolution across jurisdictions. With a more forwardlooking approach, on the basis of frequent peer reviews, qualitative assessments and stocktaking of best practices, we could gradually explore the possibilities of entering into more binding multilateral agreements within these groups, which in turn would pave the way for an EU-level authority. We should not forget that the supervisory reform process based on the De Larosière proposals is not yet finished. The review of the new EU supervisory authorities is scheduled for 2014.

Already today we are quite advanced in this regard, as there are 14 Crisis Management Groups for which EU authorities act as coordinators. These groups are truly global, involving authorities of numerous countries, ranging from Japan to Mexico. The issue of private financing is also addressed. The FSB standard states that jurisdictions should have in place privately financed deposit insurance or resolution funds, or a funding mechanism for ex post recovery from the industry of the costs of providing temporary financing to facilitate the resolution of a firm. Bail-in, a form of creditor-financed recapitalisation, is also an important element of the FSB standard. I consider bail-in as an apparently promising resolution tool. However, in many cases, in order to ensure the robust viability of the distressed bank after such a measure and to limit moral hazard, a bail-in mechanism will need to accompanied by a set of other restructuring (such as replacement of management) or resolution measures (like asset transfers, termination stays of contracts, segregation of troubled assets, bridge banks, etc... ) . For cross-border institutions, international cooperation to elaborate resolution plans and implement them, it would help if other measures would be adopted like enforceable  2  BIS central bankers’ speeches  netting agreements, segregation of clients positions and, specially, the move of OTC derivatives to central counterparties (CCPs) and to organised markets.
We know that rapid growth in demand tends to put upward pressure on prices. So with numbers like these perhaps it’s not surprising to see inflation going up, here and in other countries. In the UK, annual CPI inflation has risen from ½% to 2½% in the past four months. That’s more than half a percentage point higher than in late 2019, immediately before the pandemic. The MPC expects inflation to rise significantly further, to well over 3%, over the next six months. But in some ways the extent of the rise is a bit surprising. The economy may have grown very strongly over the past year but that’s only because it contracted so spectacularly in the first half of 2020, during the first phase of the pandemic. Even now, it’s still a long way from where it was before all this began. Growth of 5% in Q2 would still leave UK GDP 4% lower than at the end of 2019. And economic contractions don’t normally lead to higher inflation. We can identify a number of contributory factors, things that help to account for this contrast, right off the top. One is base effects. Arguably, comparing economic growth over the past eighteen months with the change in prices over the past twelve isn’t quite fair. One of the reasons annual inflation has risen so steeply through this spring is that prices of goods (energy in particular) fell significantly a year earlier, during the first phase of the pandemic.

The Taiwan Semiconductor Manufacturing Company, a major producer, said last week that its own production had risen 30% in the first half of 2021, relative to the same period a year earlier, and that it expects full year growth of 60% (in response to what have been much milder price rises I think this counts as relatively “elastic” supply). The Chief Executive of the company said “we expect the shortage to be greatly reduced for TSMC customers starting this quarter”.10  One would expect this to take some of the heat out of semiconductor prices, and those of the goods that rely on them. As for shipping, which has affected the time and cost required for all international goods trade, expectations of future prices, as indicated by forward contracts (Chart 15), imply material declines over the next year or so. See, for example Winkelried (2021), ‘Unit roots in real primary commodity prices? A meta-analysis of the Grilli and Yang data set’. Journal of Commodity Markets, article in press. 10 See “TSMC signals global chip crunch may be easing”, Financial Times, 15 July 2021. 9  12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  Chart 15: Forward contracts suggest material declines in shipping costs  Sources: Baltic Exchange and Bank calculations. Panamax is a sub-index covering mid-sized vessels travelling on 5 of the 23 shipping routes of the full index. It co-moves quite closely with the overall Baltic Exchange Dry Index.
Chart 5: Sterling three-month interbank rates relative to future expected policy rates  Chart 6: Oil prices  Sources: Bloomberg and Bank Calculations  Sources: Bloomberg and Thomson Datastream  8  BIS Review 145/2008  Chart 7: CPI inflation projection based on market interest rate expectations  BIS Review 145/2008  9

Your input has been valuable in designing the strategies and approach to advance VBI as a key thrust in propelling the Islamic finance industry further forward. Today, I would like to share some of my thoughts on the concept of value-based intermediation. I will begin by giving an account of the achievements of our industry within the past decades. I will then touch on the role of VBI as a catalyst for growth with positive impact and the call for Islamic finance to lead the way in realising the visions and objectives of VBI. Islamic finance in Malaysia has evolved and grown by leaps and bounds over the last 30 years. Today, we have a well-developed and regulated Islamic finance industry. There are diverse industry players, both local and foreign. Prior to 2000, there were only two Islamic banks and two takaful operators in the country with total market share and takaful penetration rate of less than 5%. Islamic banking assets have now grown to capture more than a quarter of the total banking system while the takaful sector has increased its penetration rate to 14.6% of the population. This is indeed very good progress. In the sukuk segment, Malaysia is also the market leader with market share of more than 50% in sukuk outstanding since year 2000. On the Bank’s part, the Islamic Financial Services Act 2013 was introduced to modernise our regulatory and legal framework in adapting to changing needs of the industry.
In New Zealand, the inflation target is formulated as growth in the consumer price index, but the mandate specifies factors for which adjustments may be made. These factors include price changes due to substantial changes in commodity prices, changes in indirect taxes, considerable changes in economic policy which directly impact prices, as well as natural disasters. There are no continuous, fixed indicators that make adjustments for these factors, but adjustments are made if the effects are substantial. In Sweden and Canada, the inflation target is formulated as growth in the consumer price index without special exclusions. However, in practice, indices for underlying inflation are used in the implementation and assessment of monetary policy. Sweden’s Riksbank often refers to an indicator that adjusts for the direct effects of interest rates and net indirect taxes. The Bank of Canada has now defined a new indicator as the operational target of monetary policy. This indicator is the consumer price index excluding the eight most volatile components: fruit, vegetables, petrol, heating oil, natural gas, domestic air travel, tobacco products and interest rate costs. Adjustments are also made for the effect of indirect taxes. The consumer price index is compiled to show developments in the cost of living. To some degree, the consumer price index overestimates developments in the cost of living. This is partly related to the fact that the measurement method does not adequately capture quality changes in the service industry.

Under framework conditions of this nature, it will not be very fruitful to provide detailed estimates of the various demand components in the economy. In some cases, the inflation projection itself may lose some of its informational value. In the UK, there is at times greater interest for the uncertainty surrounding the projection, illustrated by the fan charts, and in the minutes of the monetary policy meetings, than in the inflation report and the actual inflation projection. Detailed projections may increase the possibility of checking the consistency of projections over time. They also provide a basis for evaluating whether short-term indicators are in line with the developments expected by the central bank. On the other hand, very detailed projections may suggest that the central bank is more certain about developments than there is actually reason to be. Norway  BIS Review51/2001  9  has a long tradition of making detailed forecasts. Economic agents know from experience that point forecasts are very uncertain and presumably regard them with a healthy scepticism. The analysis and projections in the Inflation Report are conditional on a number of economic variables such as fiscal policy, exchange rates and the interest rate. A different trend in these variables could also result in a different course for both the real economy and nominal developments. The assumptions on which the inflation forecast is based must be reasonable and fairly realistic if the forecasts are to function as a basis for decision-making.
On 8 October, six of the world’s major central banks, including the ECB, cut official interest rates by half a percentage point in a coordinated move. Later in the month, the Eurosystem shifted the conduct of its monetary operations toward the injection of liquidity at fixed rates, with full allotment at the minimum bid rate, to ease funding concerns and to drive money market rates closer to official ones. A further half-point interest rate cut by the ECB followed in November, and yesterday we reduced rates by a further 75 basis points amid growing evidence that inflationary pressures are diminishing further. The crisis has so far had a limited impact on the domestic financial system and on the Maltese economy. While the latest data point to continued, if slower economic expansion in the third quarter, Maltese banks continue to benefit from an approach based on traditional intermediation between retail depositors and borrowers. Their funding model, therefore, eschews reliance on wholesale markets; they have substantial liquidity, adequate capital and prudent lending policies. Exposures to asset-backed securities or failed institutions are small, while lending in foreign currency to residents is limited. It would be naïve, indeed dangerous, however, to expect that the turmoil abroad will leave the Maltese economy and its financial system unscathed. First, Malta has a small open economy, highly dependent on trade. As the recession grips our major markets, Maltese exporters will be increasingly affected.

As the turbulence gathered strength, banks began to record growing valuation losses. The consequent erosion of their capital, and a reassessment of risk, led to a tightening of credit standards. In turn, this gave rise to concerns about “deleveraging” and a growing shortage of credit, which began to adversely affect the real economy. In the euro area, the Eurosystem’s response since the early stages of the crisis was to use the full range of instruments available to inject liquidity into the banking system. Here, the Eurosystem was fortunate in that it was already able to accept a wide range of assets as collateral and could deal with a large number of counterparties. Let us not forget, either, that the focus of the ECB’s monetary policy – correctly – was and remained price stability. Though driven by booming commodity prices, the major risk was that high levels of inflation would feed into inflation expectations and trigger second-round effects on wages and prices. At times of heightened uncertainty, the importance of price stability as the central objective of monetary policy cannot be overemphasized. As the financial crisis impacted the real economy, with the cost of financing rising and credit standards tightening, firms found it harder to raise money. Sovereign issuers, too, began to face higher borrowing costs. Evidence mounted of growing downside risks to economic activity and of moderating inflationary pressures. The monetary policy response was unprecedented.
cyber matters because the operational resilience of the sector matters to financial stability. On the ground however, we still have a lot of work to do, hence the importance of a new FPC recommendation and ensuring that cyber has a permanent footing in management of the sector’s operational resilience. 4  BIS central bankers’ speeches

Yet, according to IMF estimates, the shock intensity would have been three times higher without unprecedented monetary and fiscal policy support, both in terms of speed and scale, preventing a more devastating outcome and long-term scarring to the economies. Given the lessons learned from the global financial crisis, that is recognizing the risk of self-fulfilling cycles, central banks this time responded quickly, providing ultra-accommodative support such as policy rate cuts from already historically low levels, regulatory flexibility to prevent credit crunch and some of them even experimented with non-conventional tools. In this crisis episode, monetary policy was not perceived as "the only game in town" and since the very beginning, it was coupled with unprecedented fiscal stimulus. Average fiscal stimulus in the region amounted around 6% of GDP, which was twice as low as the global fiscal stimulus, but still on a comparable level with middle-income economies. Consequently, the pre-pandemic fiscal consolidation was ceased and the fiscal deficit hit a record high of 7.7% of GDP. Overall, during this crisis episode, policy response in the region was swifter, bolder and better balanced. Looking forward to the policy front, one of the lessons learned from the global financial crisis is that the policy support should not be rollbacked prematurely. Thus, the main challenge is how to provide further support for the recovery stage, but without further creation of vulnerabilities on the other fronts.
Building on the work of Michael Woodford in collaboration with my former colleague and mentor Julio Rotemberg (who very sadly passed away a few years ago),11 linear approximations of these models around the inflation target steady state, in conjunction with quadratic approximations of social welfare derived from the household preferences upon which the model was based, defined the system within which model-optimal monetary policy could be determined. Over the past quarter of century, a lot of ink has been spilt in academic journals, doctoral theses, and central bank working papers exploring the features and implications of this general framework in great detail. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  For those of us schooled in modern macro using Thomas Sargent’s Macroeconomic Theory textbook,12 this linear / quadratic (or LQ) framework was associated with one important result: certainty equivalence. In other words, within the LQ set-up defined by Rotemberg and Woodford, the optimal monetary policy rule governing how the policy interest rate should respond to changes in the state of the economy is invariant to distribution of shocks to that economy. This does not mean that uncertainty does not matter. On the contrary, shocks are the drivers of economic fluctuations. The welfare losses associated with inflation volatility stemming from those shocks provides a rationale for the stabilisation of inflation that underlies the adoption of inflation targeting.

The latest forecast took note of the global slowdown and foresaw a precarious recovery. Overall, at global level, it looks like we are facing a slowdown at the end of a long expansion rather than an outright downturn. However, uncertainty is rising markedly: trade tensions, geopolitical risks across the globe, political risks in Europe, etc. This makes the current juncture harder to navigate. In the US, the macroeconomic outlook has led the Fed to, somehow, pause in its normalization process. In emerging markets, potential problems could be brewing as geopolitical issues (from trade tensions to Middle East developments) are compounded with financial fragilities. Europe also has its fair share of uncertainties, with a few risks still unresolved. The macroeconomic outlook remains uncertain: last year slowdown was mostly driven by idiosyncratic developments but their consequences over the next quarters and, more broadly, the influence of the global slowdown are still unclear. According to the latest projections of the Eurosystem, GDP growth in the euro area would decelerate significantly in 2019 at 1.2% (after 1.8% in 2018) before gradually increasing to 1.4% 1/4  BIS central bankers' speeches  in 2020 and in 2021. This deceleration is mainly driven by Germany and by Italy. The Brexit situation is unsettled.
Már Guðmundsson: Iceland’s crisis and recovery and the crisis in the eurozone Address by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, in an international panel of bank governors on the European financial crisis and the Israeli economy, the Eli Hurvitz Conference on Economy and Society, Masada, Israel, 28 June 2012. *  *  *  Almost 90% of Iceland’s financial sector collapsed in the first week of October 2008, after its three private cross-border banks failed. In the panic that gripped global financial markets after the collapse of Lehman Brothers, these banks, like so many internationally active banks around the world, were faced with a wholesale run on their foreign currency liabilities and were therefore heading towards a default on those liabilities in the absence of lender-of-lastresort assistance in terms of foreign currency. However, given the size of the balance sheets involved (10 times GDP overall, with over two-thirds in foreign currency), it was impossible for the Icelandic authorities to provide this assistance on their own. Had the government made a full-scale attempt to save the banks, it would have been at serious risk of defaulting itself. The Icelandic banks’ failures were large by any criteria: the largest of them places 4th on the world list of corporate failures, and the three Icelandic banks combined rank 2nd, after Lehman. It was thus an event of systemic proportion in parts of Europe.

It is aiming at preserving and improving the situation of employees and of all our fellow citizens in the euro area. Such a responsible policy directly benefits those who are unemployed by significantly improving their employment possibilities. It benefits all our fellow citizens by supporting the purchasing power of their income, thus preserving the well-being of euro area households. And it contributes to meeting one necessary condition for sustainable long-term growth and active job creation in the euro area, which is price stability. Naturally there are also a number of other factors that are contributing to sustainable growth and job creation, in particular sound public finances and, as I already said, structural reforms that enhance competition, increase productivity and foster economic flexibility in order to elevate the growth potential of our vast euro area economy. Augmenting the growth potential of Europe is a major goal for all of us. Background information Table 1: Compensation per employee growth (whole economy) across euro area countries  2  BIS Review 52/2007  Table 2: Unit labour costs growth (whole economy) across euro area countries  Table 3. Labour productivity growth in the euro area countries  BIS Review 52/2007  3  Table 4. Employment growth in the euro area countries  Table 5. Unemployment rates across euro area countries  4  BIS Review 52/2007
And the magic happens when the two are combined, the brains and hands co-ordinated. Nothing illustrates this better than the revolution in the UK’s monetary and financial stability frameworks during my tenure. Monetary policy  I joined the Economics Division of the Bank in 1989, following the well-trodden path from Sunderland council estate to Threadneedle Street. I hoped to redesign the UK’s monetary policy framework. My first task fell a fraction short of those ambitions. It was to forecast the non-resident (“externals”) component of the asset counterparts to M4 (a measure of the money supply). Like the Schleswig-Holstein problem, only three people understood the external counterparts to M4. One was dead, the other mad and the third was not me. The external counterparts of M4 are as close to a random walk as any time-series on the planet. That makes forecasting them a mug’s game. I was that mug. Almost as thankless was the six-monthly forecasting exercise we undertook at the time. This involved every economist forecasting a component of the National Accounts in microscopic detail. My job was to forecast the Interest, Profits and Dividends component of the UK current account, another lofty task, another random walk, another game of mugs. At the end of this exhaustive process, the forecasts were sent around the Bank, as well as to HM Treasury. There, I have it on good authority, they quickly became landfill (as recycling wasn’t an option at the time). Like the UK’s entry at Eurovision, the Bank economists’ contribution was spirited but ultimately pointless.

The successes we have scored so far in this area will not have been possible without the support and contribution we have received from the Board of Trustees of this Charity. On behalf of the Board of Directors, Management and Staff of the Bank of Sierra Leone, I will like to thank them for their dedication and hard work. Within a short period of time the Board of Trustees comprising six members have worked tirelessly and assiduously to actualise the objectives of the Bank, and in the process attract  BIS Review 32/2008  1  the attention and admiration of the public. As a result, the Charity has started receiving contributions from individual members of the International Community. I therefore want to take the opportunity to single out the laudable gesture of Mr Paul Wilson and Mr Glyn Williams of De La Rue in England who in their personal capacities donated generously towards the Trust. As recent as this morning, the Trust has received contribution from Mrs Sheila Lee, mother of Mr Tom Lee. Their initiative is worthy of commendation. I therefore wish to thank them profusely through Mr Tom Lee who also is a member of the De La Rue family and who has been an effective Ambassador of the Trust, for their humanitarian gesture. This I believe should serve as an inspiration for our local collaborators to follow suit.