samchain/econo-pairs-v1 huggingface dataset:
About our external scenario, incoming data show improved performance of exports across sectors (figure 9). Still, examining numbers of the first half, we foresee that the export volumes will contract during the year. However, by 2018 they should recover thanks to improvements in the world economy, which coupled with better prices increase our estimated 5  trade balance for next year. The low comparison base due to the Escondida mine strike downtime early this year will also result in higher mining exports in 2018. Thus, in 2018, the current account deficit should be lower than we expected in September, close to 1% of GDP, similar to our 2017 projection. At trend prices, the current account deficit remains at 2.6% on average in 2017-2018 (table 1). Aside from the scenario I have just described for domestic activity and spending, the convergence of inflation to the target also considers a mild depreciation of the real exchange rate that will cause it to converge from where it was at the closing of this Report to its longterm equilibrium within the projection horizon. The baseline scenario also contemplates that the prices of foods, particularly fresh fruits and vegetables, will return to their normal patterns, so their annual inflation will be rising over the course of 2018. About monetary policy, the Board estimates that in the baseline scenario the surprises that have pulled inflation down below expectations do not compromise the convergence of inflation to the target.

In the past few months, domestic activity has evolved as expected. The stronger external impulse has consolidated, with still favorable financial conditions, trading partners that, on average, are somewhat more dynamic and better terms of trade. Nonetheless, inflation has stayed below the forecasts of the September MP Report. Most of the difference is related to the more volatile items in the basket, as core inflation —which we  measure with the so-called CPIEFE1— is near expected levels. The projections that I will present to you in a moment assume that the convergence of inflation will take somewhat longer than we anticipated in the last MP Report. This considers the effect of the recent surprises and the evolution of the exchange rate up to the Report’s statistical cutoff. It also assumes that activity growth will gradually speed up its pace, from its bounded present levels to above potential in the second half of 2018, yielding the way to close the output gap that will help inflation to converge within the projection horizon. In any case, there are still significant risks surrounding the baseline scenario depicted in this MP Report. On the one hand, some sectors still lag behind in the recovery process, especially some relating to investment. On the other hand, a scenario in which the economy does not return to higher growth rates in the coming months, can affect the recovery of growth in the medium term.
If the private sector wants to hold more in their bank accounts for a given level of spending – if the extra deposits held not as a “medium of exchange” but as a “store of  Page 21  wealth” – this needn’t have any implications for inflation. One clear example is the experience of the first few years of the 1980s. After years or extremely high inflation, the incoming UK government – which in those days set monetary as well as fiscal policy – was determined to reduce it. To this end it set itself intermediate targets for broad money growth. These were repeatedly overshot – as you can see from Chart 12, broad money growth remained stubbornly high – and eventually abandoned. Yet inflation fell sharply anyway. Chart 12: During the first half of the 1980s broad money growth remained very high but inflation declined anyway  Sources: ONS, Bank of England and Bank calculations. At least with the benefit of hindsight, one can see that these differing trends reflected strong growth in the demand for money, alongside stronger supply. After the financial liberalisation of the early 1980s banks had started to pay interest on deposit accounts, making them more competitive relative to securities like gilts (the orange line in Chart 13 plots the spread between the two). So it would make sense if the private sector wanted to allocate more of its financial assets to deposits. Because they’re held as stores of value these extra deposits were not inflationary.

But the upshot is that the efficient organisation of production at the global level is a public good that needs to be preserved. The role of multilateralism after the COVID crisis Trade aside, the present juncture is, in fact, a particularly suitable one for giving fresh impetus to multilateralism. Healthwise, the crisis will clearly not be resolved until immunity against the virus has been achieved in all countries. On the economic front, divergences in the rate of recovery may be particularly harmful for economies that are in a more vulnerable situation. Concerted global action is fundamental both for accelerating vaccine production and for making distribution affordable and fair for everybody. In the economic arena, we need some coordination of crisis exit strategies and, in parallel, support for the most vulnerable countries. Here, international institutions have a crucial role to play, in coordination with regional institutions and mechanisms. The aim is not only to entrench the global economic recovery. We must also combat the backsliding in inequality and poverty as a result of the pandemic, and jointly address the common structural challenges arising, for example, from digitalisation and the fight against climate change. And, more generally, as former ECB President and now Italian Prime Minister – Mario Draghi – put it: “one of the main reasons why multilateral institutions exist is to create regulatory convergence, and therefore to increase trust between countries”.2 A role for multilateral institutions that goes way beyond their pure economic mandate.
First, with the help of a PRA robot they have for the first time been able to map all the barriers, and show how complex our rules are.1 And second, together with our credit union supervisors they have taken a fresh look at capital requirements for that sector and proposed some quite radical changes in order to promote the growth of successful firms.2 Barriers The first thing we’ve done is take a fresh look at the various thresholds which arise in our regulations. To date this debate has been massively dominated by two features of the regime: the ability of firms to model their capital requirements (using IRB) rather than use a standardised approach, and the need for firms to issue bail-in debt (MREL) once they reach a certain size. These are both very important issues. On credit risk, we have taken three very important steps in recent years: the introduction of our modular approach for IRB applications; the introduction of our “holistic” approach to P2A-setting for eligible firms on standardised; and our success in getting Basel to agree to lower the Standardised Approach risk-weight for low-LTV mortgages very substantially, from 35% to 20% for firms on standardised. MREL, set by the Bank as Resolution Authority, is set to ensure that a bank in resolution can meet going concern regulatory capital standards, so any change in regulatory capital standards will automatically be reflected in MREL.

According to the World Development Report of the United Nations, of the world’s 6 billion people, 2.8 billion (almost half) live on less than two dollars a day, and 1.2 billion (a fifth) live on less than a dollar a day. Also, the average income in the richest 20 countries is 37 times the average in the poorest 20, a gap that has doubled in the past 40 years. Hence, the distribution of global gains is extraordinarily unequal. Worldwide inequality persists even on the socio-human front. Although in general, human conditions have improved more in the past century than in the entirety of previous history, particularly in health and technological capabilities, several inequalities still exist. For example, in the poorest countries, only 4 out of 5 children live to celebrate their fifth birthdays, while in rich countries this ratio is over 99 per cent. While in rich countries fewer than 5 per cent of all children under five are malnourished, in poor countries as many as 50 per cent are. Hence, there is a huge imbalance and inequality in distribution of socio-economic gains as well. In this context, it is also heartening to note that strategies of reducing poverty have evolved over the past several decades in response to broadened understanding and rethinking of the complexity of development. As we are aware, in the 1950s and 60s, many economic and political planners viewed large investments in physical capital and infrastructure as the primary means of development.
That explains why we are always ready to welcome overseas financial institutions to London, why we rigorously avoid discrimination on grounds of nationality in our financial market dealings, and why we have greatly welcomed the decisions by German, French and Swiss banks in particular to concentrate many of their wholesale market activities in London in recent years. Europe needs a broad and deep market like London to rival those in Tokyo and New York. I would not wish, today, to talk at length about the preparations being made in the City for EMU. Partly because this afternoon, in London, we shall be releasing our latest quarterly report on Practical Issues Arising from the Introduction of the Euro, which sets out in some detail the progress that has been made over the last three months, and how we propose to take things forward. In short, we are confident that London will be as well prepared for EMU as BIS Review 1/1997  -5-  any market, when the time comes. As we say in that paper, we are fully involved in preparing the wholesale financial sector of the economy for the euro and, of course, in the extensive work being undertaken at the European Monetary Institute. For the most part that work is proceeding successfully and we are happy with the decisions made. Some are, inevitably, compromises. But that is what building Europe is all about, and we are always ready to seek compromise solutions.

Mr. Davies gives his personal view of EMU Speech by the Deputy Governor of the Bank of England, Mr. Howard Davies, at the EFMA Conference on the Single Currency in Brussels on 16/12/96. Like many British men of my generation, I spent a good part of my spare time as a boy involved with the Scouting movement, first as a Wolf Cub, then as a Boy Scout. I have to confess that I have forgotten many of the useful things I learned in the Boy Scouts. I can no longer light a camp-fire using only two sticks. I can no longer tie a clove hitch. But I can remember the Boy Scout’s motto - ‘Be Prepared’. And that motto strikes me as a useful injunction to bear in mind, as we approach the D-Day for Economic and Monetary Union of 1 January 1999. It applies, I think, just as much to those who may, for one reason or another, find themselves outside the first group of EMU countries, as it does to those who firmly intend to surf on the first wave. The preparations, though, may be slightly different in each case. Now some of you may think, if you read the British press, or hear echoes of the British political debate on EMU through the media elsewhere in Europe, that in present circumstances one of the other pieces of advice which Lord Baden-Powell handed down to Boy Scouts who followed him would be more appropriate.
This results in lower production costs. 6  BIS Review 47/2007  The strong growth in labour productivity does not seem to reflect an increase in the real capital behind each person-hour worked, but rather a considerable improvement in labour and capital efficiency. 2 Intensified competition in product markets may have contributed to the subdued rise in prices. New operators have entered markets that were previously fairly sheltered from competition, for example in the grocery trade, building materials, telecommunications, banking and insurance. With general confidence that inflation will be kept in check and that petroleum revenues are only gradually phased into the economy, low import prices, high prices and good market opportunities for our export goods, an ample supply of foreign labour and high productivity growth have made it possible to combine high growth with low inflation. It is possible that some of the driving forces that have boosted the growth potential of the Norwegian economy and restrained inflation may now diminish. Prices for imported goods are now falling at a slower pace. The shift towards imports from low-cost countries was less pronounced in 2006 than in previous years. The rise in prices for oil and other commodities over several years has resulted in a somewhat faster rate of increase in producer and export prices among our trading partners. Measured in foreign currency, prices for imported consumer goods rose in 2006.

Prices for imported consumer goods showed a considerable smaller decline than in the three preceding years. Our inflation projections were revised downwards in the light of actual developments through 2006. Underlying inflation has recently picked up somewhat and is more closely in line with that expected one year ago. At the same time as inflation has been low, growth in the mainland economy has been strong, and stronger than expected. The Norwegian economy is booming, after a strong upturn since summer 2003. The upturn followed a period of slow growth from 1998 and a mild recession in 2002 and into 2003. Growth has been stronger and occurred earlier than in the cyclical upturn in the mid-1990s. When Norges Bank reduced the key policy rate in 2003, demand and output rapidly recovered. Strong productivity growth supported the upturn, which was reflected in exports, petroleum investment and  BIS Review 47/2007  3  after a period in general government demand. So far in this cyclical upturn, the mainland economy has grown by an average of a little more than 4 per cent annually. The upturn is now in a mature phase. Even though production increased rapidly, it took a long time for employment to pick up. Employment growth was lower for a long period compared with the upturns in the 1980s and 1990s. Moreover, high growth in labour productivity partly reflected a marked fall in sickness absence in 2004.
That is designed to underpin incentives for banks to manage liquidity risk prudently, in the long-run interests not only of the banking system but of the wider economy. We have published a schedule for DWF pricing with those properties, structured around four broad classes of collateral, grouped according to their liquidity/risk characteristics. 17 We plan, after consultation, to introduce an auction structure for the wider-collateral long-term repo OMOs that delivers the same broad result of counterparties having to pay up to borrow against less liquid collateral. 18  16  The Bank published its general approach to collateral valuations when it disclosed use of the Special Liquidity Scheme. It stated: “Securities are valued by the Bank using observed market prices that are independent and routinely available publicly. The Bank reserves the right to use its own calculated prices, including where such independent market prices are unavailable. Those calculated prices are designed to deliver valuations taking account of securities’ contracted cash flows and yields of comparable securities, but not individual loan-byloan analysis of portfolios. To account for the risk that a calculated price is an over-estimate of what a market price would have been had it existed, an additional haircut is added. The Bank’s valuation of all securities is binding.” For more details, see the Market Notice for the Special Liquidity Scheme released on 21 April 2008. www.bankofengland.co.uk/markets/sls/index.htm.

In other words, a central bank policy of lending against only the best assets is likely to prove time inconsistent when it comes to the crunch. This is not an ivory tower problem. It is a real problem. It is why the Bank of England confirmed last year that we do stand ready, via our public facilities, to lend against a wide range of collateral, subject crucially to appropriate haircuts and other terms. To do otherwise would be futile; it would lack credibility. And to do so is consistent with Bagehot’s dictum that central banks should lend against “everything which in common times is good ‘banking security’ ”. 12 The Bank has already published an initial list of collateral eligible in its dedicated liquidityinsurance facilities. Looking ahead, the Bank plans to expand the list, and to promulgate detailed eligibility criteria reflecting its risk tolerance and experience gained from managing  England’s Market Operations: A consultative paper by the Bank of England”, October 2008. Mark Carney, Governor of the Bank of Canada, has also set out his principles for the Bank of Canada’s liquidity provision. 10  Broadly, if the monetary authority thinks it can achieve above “trend” output growth or employment for a while by reducing interest rates, it may be tempted to let inflation temporarily rise above the rate it has promised to deliver.
Over the  16  same period, unemployment averaged 7.6%, with a  14  standard deviation of 2.8%. Soon after the adoption of  12  inflation targeting, unemployment fell by one  10  percentage point and its standard deviation was cut in  8 6  half. The volatility in economic growth rate in the  4  1970s and 1980s was also one-and-a-half times  2 -6  -4  -2  6 8 Output gap (%) Source: Bank calculations. Inflation is the annual growth rate of the retail price index (RPI) until 1975, and the annual growth rate of the retail price index excluding mortgage interest payments (RPIX) after 1975. The output gap is the percentage deviation of quarterly GDP from its trend, where the trend is measured by a Hodrick-Prescott filter. 0  0  2  4  higher than after the adoption of inflation targeting. In sum, high, volatile inflation likely contributed to a higher natural rate of unemployment and poor supply side performance. Once the UK adopted inflation targeting and granted  operational independence to the Bank, consistent with the theory of constrained discretion, the UK moved towards a better equilibrium characterised by low, stable and predictable inflation, and relatively stable employment. Moreover, by successfully anchoring inflation expectations around the target, inflation targeting helped lower UK borrowing costs for households and businesses, and has allowed monetary policy to promote short-run stabilisation of the economy.

To me, both types of institutional setup may have one important common weakness, that is, there does not seem to be the notion of a lead supervisor in either model. Allow me to elaborate on this point. In the case of separate authorities, it would be normal for each authority to assume that every authority is doing its job according to its mandate. Therefore, one would tend to focus only on its own mandate. This can be a problem if some authorities fail to do a proper job, others may not be able to take note. Worse still, if there are supervisory gaps, the chance of any one authority identifying potential adverse impact from areas outside of one’s own mandate is even smaller. Take the US as an example, the authorities and investors did not  2  BIS Review 32/2009  realize that credit rating agencies were not doing an adequate job in their rating of complex structured products. If there were a lead supervisor, would the whistle have been blown earlier? I believe that there would have been a better chance if there were a lead supervisor with a clear mandate to take the lead responsibility and who is risk focused. There would have been more dialogues through which weaknesses may have been identified and corrected. The idea of a lead supervisor has gained widespread support in the area of cross-border supervision, as it contributes to better coordination, which in turn could help to prevent or identify problems at an early stage.
We have to: −  identify potential unfulfilled need for financial services in the medium term so that we can adequately accommodate needs of our consumers and corporate in the real sector. These include financing of small and medium-sized enterprises as well as long-term financing. −  determine problems, obstacles, and bottlenecks within our financial infrastructures as well as tax issues that will constraint us from achieving our full potential;  −  revisit the existing specified scopes of businesses for each types of financial institutions and determine appropriate structures for our financial conglomerates, taking into consideration the increasingly blurring of traditional lines that have previously separated commercial banking, investment banking, and insurance businesses from one another;  −  prioritize our aims and construct appropriate benchmarks to set clear targets of development and measure our performance;  −  and, of course, re-examine the current regulatory structure once the market reform is already underway. Ladies and Gentlemen You may ask how you can be involved? In the next nine months, our staff will conduct background studies, commission additional research papers, and take inputs from relevant stakeholders through market interviews and focus groups. We invite you to actively participate in our public consultation process and encourage you to take initiatives by making public submission on topics which you feel are critical for the development of our desired financial system.

M R Pridiyathorn Devakula: Commercial Banking and Financial Services - our Vision for Thailand Speech by M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the Conference on “Modernizing our Financial System: Challenges for the New Millennium”, Bangkok, 23 January 2002. *  *  *  Your Excellencies Distinguished Guests Ladies and Gentlemen, I would like to take this opportunity to welcome all of you to our conference on "Modernizing our Financial System: Challenges for the new Millennium". I would also like to express our deep appreciation for the distinguished speakers who came all the way from Australia, Canada, Hong Kong, and South Africa to share with us their expertise and knowledge on this very important topic. And, of course, to the World Bank, our co-host, for help organizing the conference. Our financial crisis in 1997 and its subsequent impacts highlighted the lesson of critical importance that dynamic and strong domestic financial institutions are vital to sustainability of development and growth. Over the past 20 years, financial sector has been one of the major forces that support our progress and financial services share in our GDP has grown from a mere 3 percent to roughly 8 percent. It is the fifth largest industry in term of value added to our GDP, and currently employing more than 300,000 of our workforce. Nevertheless, despite such favorable development, there are some concerns: -  First, in term of competitiveness of our financial institutions, there is room for improvement.