samchain/econo-pairs-v1 huggingface dataset:
Lee Hsien Loong: Financial sector liberalisation - going global  Speech by Mr Lee Hsien Loong, Chairman of the Board of Directors of The Monetary Authority of Singapore and Deputy Prime Minister, at the Monetary Authority of Singapore Work Plan Seminar, held in Singapore on 3 April 2000. * 1. *  *  Introduction  Since 1997, while the Asian region was undergoing a traumatic crisis followed by a sharp recovery, the international financial scene has not stood still. Financial innovation has continued unabated, institutions are rationalising and consolidating, and transactions and services are rapidly going electronic and online. Singapore has been directly affected by these global trends. It is as well that we pressed on with our financial liberalisation programme despite the crisis. MAS and the industry have had a busy two years. It is timely now to take stock of what has been achieved, and map out the tasks ahead. Our objective has been to open up the financial sector, progressively but decisively. We have aimed to allow market forces greater free play, get investors to take full responsibility for their decisions along with the outcomes, and shift MAS’ emphasis to setting the framework and upholding standards of integrity and supervision. Ultimately, we aim to become a vibrant and dynamic global financial hub. How much of this vision have we so far realised? 2. Financial sector reform - concrete changes  We have made many concrete changes across the financial services industry.

The officers responsible for supervision will naturally be more conservative than those promoting the financial sector. Managed well, this tension is constructive. Officers must continue to speak up and express their views, even though they may sometimes be overruled. With this approach to regulation, it is imperative for MAS to foster closer cooperation with the industry. We have made a serious effort to build a constructive exchange and dialogue with the private sector. We must continue to strengthen this culture of openness. Central bankers must treat some matters with the utmost discretion, to be discussed only in hushed tones among a select priesthood. But we cannot do all our business this way. In our day-to-day dealings with the financial institutions, we have to be constantly willing to explain the rationale for decisions and policies. At the same time, we must listen to proposals and ideas from the industry and feedback. As we continue to liberalise, we will need inputs from industry participants on many issues. We have to understand the industry’s point of view, and yet not be captured by the industry we are regulating. This mindset must permeate the whole of MAS, to every staff member. 5. Industry specific issues  Banks The first priority for banks is to upgrade their capabilities and strengthen their management teams. This is the only way for them to hold their own in the new environment, either by themselves or linked up with others in a strategic alliance or merger.
Our decision to shift the focus of the presentation to market rates was coupled with a decision to publish forecasts for three years, rather than two, as was previously the case. This did not reflect a change in policy horizon – we are required to meet our 2% target ‘at all times’. But it did provide useful context for interpreting the gradient of inflation forecasts at the two year horizon, and hence a clearer indication of future policy, if the economy evolves in line with the central projection. The shift to using a market rate assumption was a very modest step towards greater transparency. At a technical level, it is a non trivial task to translate any market rate yield curve into a conventional forecasting assumption which is a genuine reflection of market expectations of future official interest rates.18 And markets are themselves uncertain about the path of future rates so we publish a fan chart for market interest rate to help quantify that uncertainty, based on options prices. There is a big difference between a conditioning assumption and a commitment, not least because there is a big gap between anyone’s current guess at where rates might need to go to meet the inflation target, conditional on the data available at any point in time, and where the MPC will actually take rates given the information it may have in the future.

Rachel Lomax: Inflation targeting in practice - models, forecasts and hunches Speech by Ms Rachel Lomax, Deputy Governor of the Bank of England, to the 59th International Atlantic Economic Conference, London, 12 March 2005. I am most grateful to Jens Larsen, James Bell, Fabrizio Zampolli and Robin Windle for research support; and to Charlie Bean, Peter Andrews, Spencer Dale, Phil Evans, Laura Piscitelli and other colleagues at the Bank of England for helpful comments. *  *  *  Introduction Five and a half years ago in his Monnet lecture Charles Goodhart1 was able to talk with some confidence of the features that particularly distinguished the UK’s approach to inflation targeting. Today with over 20 countries, in every habitable continent, formally operating some variant of inflation targeting and many more adopting some parts of the framework, all actively sharing experience and best practice, I suspect that most aspects of our approach would find a counterpart somewhere else in the world. But Charles’s focus on the Monetary Policy Committee’s (MPC) personal engagement in producing a published inflation forecast still seems to me to capture the essence of the UK’s approach. Today I want to talk about the role that forecasting has come to play in helping the MPC to take and communicate its decisions. In what sense does the Committee really ‘own’ the published forecasts that go out under its name? How much use do we make of models, and what models do we use?
To get an idea of what is possible, however, we can compare the results in other countries that have had a fixed inflation target as long as Sweden, that is, since the early 1990s. It is also reasonable to exempt the very first years of the new inflation-targeting regime for Sweden and other countries. Canada has had an inflation target since 1991, which from the end of 1995 is 2 per cent and its average inflation rate during the period 1996–2011 is 2.0 per cent. The United Kingdom has had an inflation target from the end of 1992, which was however modified in 2003/2004. Up to the end of 2003, the UK inflation target was 2.5 per cent, when measured using the RPIX price index, and the average inflation rate in 1996–2003 was 2.5 per cent. With effect from 2004 the United Kingdom has had an inflation target of 2 per cent for the CPI, which cannot be regarded as any significant change in level as inflation measured as the CPI is on average 0.75 percentage points lower than when measured using RPIX. 12 The average inflation rate for the period 2004–2007 was 2.0 per cent, while the average for the crisis years 2008–2011 is higher, at 3.4 per cent. However, given the higher rate of unemployment in the United Kingdom stemming from the crisis, a well-balanced monetary policy means that inflation should overshoot the target.

With regard to real economic stability, it is not as simple as merely focusing on employment and unemployment. It is actually not clear which real-economy target variable should be used. The other kind of objection ultimately entails sustainable growth in mortgages and financial stability being separate objectives for monetary policy. One can then neglect the objective of price stability and highest sustainable employment for a while in an attempt to slow down mortgage growth, promote financial stability and maintain a higher interest rate, as it is assumed that low interest rates would build up unsustainable financial imbalances. Clear targets mean that monetary policy is less arbitrary and easier to assess In response to these objections I would like to state that several and unclear targets for monetary policy risks making it arbitrary and difficult to assess, which the work on formulating the Sveriges Riksbank Act aimed to counteract. Delegating monetary policy to an independent Riksbank requires that monetary policy has clear objectives. 7  6  See the discussion of the “normalising argument” in the minutes of the monetary policy meetings and Svensson (2011). 7  “In the opinion of the government, a delegation of monetary policy to an independent Riksbank cannot take place unless the objective of the activities is clear. An independent Riksbank must therefore be given a democratically-anchored objective for its activities. If no objective is formulated, there would be scope for an arbitrary conduct of monetary policy.
Page 1  Bringing inflation back to the 2% target, no ifs no buts − speech by Andrew Bailey Given at the Mansion House Financial and Professional Services Dinner  Page 2  Published on 19 July 2022  Andrew Bailey talks about the impact of four recent shocks on our economy. These shocks have pushed inflation up, he says, but we will set monetary policy to bring it back down to our target. Speech Lord Mayor, it is a great pleasure to be here at Mansion House this evening. The return to more normal times allows those of us from the Bank to pop round to our neighbour for an informal light dinner. It is also pleasing that you have been able to resume travelling in pursuit of your important role of promoting the UK and in particular the services of the City. We thank you for that important work. Quite appropriately you have also been keen to ensure that there is a suitable number of events to mark your Irish roots, the strong connections between the City and Ireland, and the rich vein of form of the Irish rugby team. I would like to join you [and the Chancellor] in welcoming Paschal Donohoe. It’s always good to see you Paschal. Chancellor, congratulations on taking up the office. I know from a lot of experience that you will find a warm welcome in the City. In my experience, you will find that people in the City want to get things done.

That made me very proud. Thank you. I am grateful to Jamie Bell, Alan Castle, Rashmi Harimohan, Jonathan Haskel, Bob Hills, Karen  Page 6  Jude, Nick McLaren, Rhys Phillips, Huw Pill, Andrea Rosen, Michael Saunders, Martin Seneca, Fergal Shortall, Silvana Tenreyro, and Laura Wallis for their assistance in helping me prepare these remarks.
For those reasons, we have actually approved internal models with credit components that do not meet our QIs, where the firms in question demonstrated that their exposure is atypical and hence warrants a non-standard calibration, or provided off-setting conservatism in other aspects of the model. PRA’s approach to insurance supervision I’d like to turn now to some broader thoughts about what it means for the PRA to supervise insurance 9  companies. I’ve previously spoken about the history of insurance regulation in the UK and won’t re-hash that here, since I’ve not yet reached the age where it is acceptable simply to repeat myself. Happily, according to our longevity QI I should have plenty of time for that further down the track. But I would like to provide some insights into why and how the PRA operates in the way it does. The UK insurance industry is the fourth largest in the world. It employs 300,000 people in the UK, provides 10  cover for nearly 27 million households , and has £ trillion  11  of assets. It is therefore unsurprising that Parliament has given the PRA a General Objective of delivering safety and soundness of insurers, as well as banks. But for insurers only, Parliament has also given us an additional Insurance Objective – of equal weight to our General Objective – which is to contribute to securing an appropriate degree of policyholder protection.

In fact, the PRA’s resourcing model already works to focus our resources on those areas of most concern. We categorise each regulated firm according to its size and the potential harm customers would suffer should it fail. The majority of firms we regulate are assigned the lowest category, reflecting the low level of risk they pose to our objectives. Firms in higher categories receive more supervisory and specialist resources, and decisions for those firms are approved at more senior levels within the PRA’s decision – making framework. The IEO have challenged us to look at this system again and we will do so. Our Executive Director for Insurance Supervision, David Rule, will take forward discussion of all of these issues with the Prudential Regulation Committee. We will then revise our Approach to Insurance Supervision document to explain any changes we decide to make. In doing this we will of course need fully to factor in our third objective, to facilitate effective competition – 12  which was also recently reviewed by the IEO . Although this is a secondary objective, it is given a high priority in the PRA and is also quite rightly a topic in which the Treasury Select Committee takes a strong interest. Our competition work spans banking and insurance, but there has been much more public debate about the former.
I think we have helped to contribute to the considerable progress made on a number of fronts, including making the financial system more resilient and robust and helping make monetary policy more effective, even at the zero lower bound. But there is much more work to do. In particular, I think we have just scratched the surface in understanding how developments in one area, such as capital and liquidity requirements for large, complex financial institutions, affect other areas, such as effective monetary policy implementation. We still don’t have well developed macro-models that incorporate a realistic financial sector. We don’t understand fully how large-scale asset purchase programs work to ease financial market conditions – is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling? There are many other riddles that remain to be solved. How does one design an effective reference rate that is informative, verifiable and not vulnerable to manipulation? If you manage to come up with one, how do you migrate the trillions of dollars of existing contracts to the new standard? The U.S. unemployment rate has declined more sharply than one might expect given the economy’s growth rate over the past few years. Is this permanent or will it reverse if the economy continues to grow and the pressure on labor market resources increases in the coming years? How does one end “too big to fail” for large global firms operating across different jurisdictions? The list goes on and on.

Irma Rosenberg: The objective of monetary policy Speech by Ms Irma Rosenberg, Deputy Governor of the Sveriges Riksbank, at a meeting arranged by Öhman Fondkommission, Stockholm, 14 February 2006. *  *  *  A discussion has recently taken place in the media on the objective of monetary policy. Some have argued that we should have more objectives while others considered that we already work with too many objectives and that this has created a lack of clarity. In my opinion this discussion is a bit misleading. We have one objective: keeping inflation low and stable. However, in our efforts to achieve this objective, we have, like many other central banks, opted to be flexible to avoid exposing the economy to strain. Our statutory objective is to maintain price stability. It has been left to the Riksbank to decide on the detailed interpretation of this objective. We have defined it as meaning that inflation should be 2 per cent. However, monetary policy affects the economy with a time lag and is simply not precise enough to maintain inflation at a constant 2 per cent. The inflation target includes a tolerance interval of +/one percentage point to underline that temporary deviations are permitted, provided that these are not too large. For further clarity, we apply the principle that in the event of any deviation, inflation should normally be brought back to the target within a two-year period. When we set the interest rate, we must accordingly base our decision on an inflation forecast.
Hence, the overconcentration on agriculture in pro-poor growth strategies appears to be principally supply driven and there are no demanders who actually wish to utilise them to derive benefits. Hence, the continuation of providing state support for rural agriculture, however much it is well intentioned, would trap an unwilling rural population in agriculture, thereby delaying the adjustment which has to take place by way of transferring the excess labour to other gainful areas of the economy and improve the productivity and efficiency of the agricultural sector of the country. This means that the growth strategy should focus on providing gainful employment to the rural poor in other growing areas such as the services sector and integrate it with the global economy so as to ensure income sustainability 14 . Two main issues have been present in Sri Lanka’s state sponsored poverty alleviation programmes in the past. One was the moral hazard problem and the other was the adverse selection problem. Since the poverty alleviation programmes anticipated providing benefits to selected poor individuals free of charge, those individuals did not have to work hard to receive such benefits. Hence, the schemes did not provide any incentive for participants to work hard and get out of poverty. As a result, individuals who were taken into the schemes preferred to be in the scheme forever, thereby perpetuating poverty and raising the cost of its eradication significantly 15 .

Caleb M Fundanga: Enhancing access to finance in Zambia Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the Access Bank Zambia Limited Acacia and Longacres branches and the Visa Debit Card, Lusaka, 16 February 2010. *  *  *  Your Excellency the High Commissioner of the Republic of Nigeria in Zambia, Ms Marcus Folake Bello; The Chairman of the Board Access Bank Zambia Ltd, Mr Caleb Mulenga; The Group Deputy Managing Director, Access Bank Plc, Mr Herbert Wigwe; The Managing Director, Access Bank Zambia Ltd, Mrs Mukwandi Chibesakunda; Members of the Board of Directors for Access Bank Zambia Ltd, present; Management and Staff of Access Bank Zambia Ltd; Colleagues from Bank of Zambia; Distinguished Invited Guests; Members of the Press; Ladies and Gentlemen. It is my privilege and honour to officiate at this important launch of the Longacres and Acacia branches of Access Bank Zambia Limited. As the Central Bank and regulator of the banking sector, we are always pleased to be associated with the achievements of the institutions that we regulate, particularly where these developments lead to increased access to banking services as well as convenience for the Zambian public. Ladies and Gentlemen, it is a well known fact that bank branch expansion programmes play an important role in increasing access to the banking services.
Page 4 sur 14  As a result households have started shifting towards term deposits, and so further increasing the average cost of funding for banks. Turning now to bank loans to households and firms, let me stress that this credit channel is of primary importance in the euro area - much more so than in the United States - as bank loans remain the dominant source of financing for firms, in particular for smaller firms.1 Overall, the growth rate of loans has slowed due to a combination of higher borrowing rates, lower demand, and - for firms tighter credit standards. (1) The cost of credit has risen significantly from exceptionally accommodative levels. Households in the euro area willing to buy a house at the end of 2021 could borrow at 1.3% in average whereas they have to pay almost 3.5% in March 2023, although significantly less in France (2.6%). Lending rates for firms  1  The average share of bonds in debt financing has increased over time but only makes up 30% of debt financing for firms. See Holm-Hadulla, F., Musso, A., Nicoletti G. and Tujula M. (2022) “Firm debt financing structures and the transmission of shocks in the euro area”, Economic Bulletin, Issue 4, ECB. Page 5 sur 14 have been rising still faster, from 1.3% at end-2021 to 4.2% today. Compared to 2005-2007, the increase in policy rates is much faster today.

The conditional inflation forecast is based on the assumption that the three-month Libor will remain at –0.75% over the entire forecast horizon. Despite depreciating somewhat in recent months, the Swiss franc is still significantly overvalued. Furthermore, inflation prospects have largely remained the same. We have therefore decided to maintain our expansionary monetary policy. The target range for the three-month Libor is unchanged at between –1.25% and –0.25%, and interest on sight deposits at the SNB remains at –0.75%. The interest rate differential with other currencies, even following the European Central Bank’s (ECB) mild interest rate cut, is thus still markedly higher than at the beginning of the year. The negative interest rate makes the Swiss franc less attractive, and continues to help weaken the currency. The SNB also remains active in the foreign exchange market in order to influence the exchange rate situation, as necessary. The negative interest rate and our willingness to intervene in the foreign exchange market are intended to ease pressure on the Swiss franc. Our monetary policy thus helps to stabilise price developments and support economic activity. Global economic outlook As our inflation forecast is heavily influenced by economic developments abroad, let me now present our assessment of the global economy. Global economic growth was weaker than expected in the third quarter of 2015. This was mainly due to subdued manufacturing activity around the globe and sluggish world trade.