samchain/econo-pairs-v1 huggingface dataset:
Conclusion Interest in the issues I have touched on this morning must not ebb when peacetime is eventually regained. Parochially, there has been massively more public interest in the Bank of England’s financial stability role during the period of turmoil than over the preceding years. But what we all do in peacetime will affect how the next “war” plays out. We must not forget that. Central banks can play a role because they can bring together and synthesise analytical and practical expertise in macroeconomic conditions, financial markets and the financial infrastructure. That synthesis is rather special, and should be at the service of the system as a whole. 4  BIS Review 77/2008

In the early phases of the upturn, output growth primarily reflected a strong increase in the number of person-hours worked partly owing to the marked increase in average working hours when sickness absence fell in 2004. A high level of inward labour migration after EU enlargement in 2004 also contributed to increasing economic capacity. Historically, there has been a close relationship between the change in prices for domestically produced goods and services and the level of capacity utilisation, here measured by the output gap. This relationship broke down in 2006. Surprisingly low inflation through 2006, despite appreciably stronger output and employment growth, may indicate that developments have been influenced by conditions on the production and supply side of the economy. The present economic expansion differs from previous upturns in that inflation has remained low so far despite strong growth and increasing capacity utilisation. There are probably several reasons for this. First, low import prices and high prices for our commodity exports have improved Norway’s terms of trade considerably. Prices for oil and gas, shipping, fish, industrial commodities and engineering products have increased considerably. Moreover, Norwegian importers have gained access to new markets in central Europe and Asia which offer considerably cheaper consumer goods. The terms of trade have improved by about 40 per cent since 2002. A similar situation has not been seen since World War I when earnings in the shipping industry and other export industries were exceptionally high for a period. Second, an ample supply of labour has boosted output growth.
So far, there is no indication that the US has problems in financing its deficit. If creditors begin to fear a fall in prices and withdraw from the market, substantial corrections may nevertheless be triggered. This may lead to higher interest rates and perhaps also a fall in US equity markets that spills over to other countries’ financial markets. In that case, the dollar will also depreciate. The household debt burden in the US may be another source of instability if households abruptly reduce both housing demand and consumption. Strong demand in the US has sustained growth in the world economy. We assume that growth will slow somewhat in the US in the period ahead. A more pronounced downturn cannot be ruled out, however. An abrupt and pronounced downturn might fairly rapidly lead to declining growth in the entire OECD area. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and largely export-based growth in Asian countries. Therefore, countries other than the US must also contribute in order to prevent a decline in world economic growth. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower demand from the US. The challenges are perhaps particularly demanding in  3/7  some large European countries, whereas it appears that the Japanese economy is becoming more self-driven.

Consumer interest groups and business associations also need to be proactive in updating and disseminating information on the availability of financing options such as guarantees, special schemes, and other forms of alternative financing. There are many micro enterprises that still rely on personal loans to finance business operations due to the lack of information and awareness on the existence of such financing options in the market. As a result, these enterprises are required to pay high interest rates to settle personal debts taken, while more cost-effective financing facilities remain underutilised. Business associations should strengthen their role by deepening understanding on the underlying causes before raising issues on access to funding. More often than not, the issues raised by business associations are channeled in the form of general complaints that have yet to be studied thoroughly or specifically. This compounds the difficulty of resolving the issues given 2/4  BIS central bankers' speeches  the lack of supporting details. In addition, business associations can act as an important point of reference in advising members on matters concerning efficiency and competitiveness, the use of technology and the adoption of electronic payments to achieve greater security and cost efficiencies. For consumers, priority should be placed on taking charge of their financial futures and ensuring that the financing options available are utilised responsibly. This can be achieved by conducting due diligence and research on the features of a potential financial product, which will lead to better understanding to facilitate informed decision-making.
The recent European Council meetings in Stockholm in March 2001 and Gothenburg in June 2001 confirmed these guidelines and even added a number of important issues such as the consequences of the ageing population in the European Union, the role of biotechnologies in economic growth, and the environment. The European Heads of State and Government, meeting in Ghent a couple of weeks ago, called for an acceleration of the whole process. All European countries must resolutely pursue the reforms they have already initiated. It must be acknowledged that much has already been done, in particular with the implementation of the single market. However, continental Europe is still experiencing levels of unemployment that are too high, despite the fact that the unemployment rate has been declining significantly in most of its economies for the past three years. According to the IMF, the OECD and central banks, 75% of unemployment is of a structural nature, i.e. generated by an environment which handicaps job creation. There is no doubt that EMU stimulates structural reforms on the labour market. With increased capital mobility and the smooth functioning of the single market, firms will become increasingly sensitive to the general environment in terms of their competitiveness when choosing a particular location in the euro area. The actual process of selecting an investment location within the euro area will be a major incentive for undertaking the necessary reforms. b)  Besides structural reforms, a strong emphasis must be placed on competitiveness.

Co-ordination is stressed in the Treaty itself, which requests that Member States treat national economic policies “as a matter of common concern” and subject them to a multilateral procedure. Naturally, this economic co-ordination can in no way undermine the independence of the ECB and the Eurosystem. Even more importantly, the euro area possesses institutional mechanisms which are conducive to an appropriate policy mix: the Stability and Growth Pact includes, on the part of the Member States, strict fiscal requirements. I will cite three economic justifications for the Treaty provisions that gave rise to the Stability and Growth Pact: –  First, by keeping a rein on the fiscal policies of the EMU Member States, the Pact ensures a satisfactory policy mix within the euro area. This is essential for monetary policy, in order to counterbalance the fact that Europe does not have a federal government and hence no significant “federal” budget. Mutual surveillance and close co-ordination of fiscal policies are the responsibility of the "Eurogroup" and of the Ecofin Council. Keeping the deficit below 3 % of GDP, and achieving budgets that are "close to balance or in surplus" in the medium term, ensure a balanced policy mix throughout the euro area. –  Second, the Pact helps to prevent well-managed economies from having to bear an unjustified risk premium on interest rates, resulting from the poor management of other EMU economies, by setting up a penalty system for excessive deficits.
We were unanimous on the one decision to raise the interest rate by 0.25 per cent, but not on the other decision regarding the interest rate path. The majority of the Executive Board members considered it reasonable to have an interest rate path that involved a substantial probability of a further two increases during the year, while the minority considered it reasonable to have an interest rate path that involved some probability of one further increase. The minority’s assessment was that the slowdown of the economy that is now  BIS Review 100/2008  5  taking place would dampen inflationary pressures to a greater extent than assumed in the main scenario. There would therefore be less need to continue increasing the interest rate. 4. Developments during the summer  I have earlier discussed what happened during the summer in the world around us. The trend of falling growth and rising inflation has broadly continued. One important change is that the oil price and other commodity prices have begun to fall, which may further slow down price increases. The dollar has risen in value against the euro and the krona, which also means that the krona has weakened against a weighted average of other currencies. The financial market turmoil has also continued. I intend to conclude by summarising the important new information on developments in the Swedish economy since the monetary policy meeting at the beginning of July.

But if secondary effects arise, or if inflation expectations rise, monetary policy may need to be tightened. It is important for monetary policy that what started as increases in oil and food prices in the world market does not spread to other areas and that inflation expectations in the slightly longer term do not become entrenched at a higher level, but fall back towards the inflation target once again. We know that inflation expectations can be largely explained by the actual rise in inflation. However, we do not know very much about how monetary policy affects inflation expectations over and above the effect via inflation, and how inflation expectations in their turn affect long-term inflation. There is an interesting approach in the academic research which involves the general public looking at outcomes and gradually learning how the economy functions and how the central bank reacts. If households are to believe that the central bank focuses on low and stable inflation they must be able to observe such behaviour. But such a process may take time, which we in Sweden could conclude in the mid-1990s when our own inflation target was established. This is an area we need to study more. Wage costs rising more than before In the Monetary Policy Report we assumed that hourly wages would increase by an average of around 4 per cent a year during the three-year agreement period. This is around 1 percentage point a year more than during the previous three-year period.
Dr Abbas is also the recipient of several awards from several governments and from the Islamic Development Bank, he received the Annual Prize for Research in Islamic Economics in recognition of his service in advancing the knowledge in Islamic finance. He has published books and research articles on a wide range of areas including microeconomic theory, mathematical economics and Islamic economics. During his tenure at INCEIF, Dr. Abbas will also engage in research and consultancy in on Islamic finance, including guiding academic research and supervising dissertations and theses of INCEIF students. He will also present lectures abroad organised by INCEIF as part of the efforts to strengthen the international alliances that have been established with INCEIF BIS Review 9/2010  1  from other centres of learning in other parts of the world. His appointment as the inaugural holder of INCEIF Chair of Islamic Finance would certainly give INCEIF the opportunity to raise its capacity to become a world class learning institution dedicated to Islamic Finance. Dr Abbas valuable knowledge and insights and his extensive experience in both academia and at the IMF, will benefit and enhance the knowledge and expertise of INCEIF graduates as well as the academia and financial community. Since its establishment in 2006, INCEIF has grown from strength to strength and has been recording a steady increase in the number of students for its three programmes, the Chartered Islamic Finance Professional or the CIFP, Masters in Islamic Finance and PhD in Islamic Finance.

Zeti Akhtar Aziz: Expanding further understanding of Islamic finance Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the INCEIF's (The Global University in Islamic Finance) Public Lecture by Dr Abbas Mirakhor, the First Holder of INCEIF Chair of Islamic Finance, Kuala Lumpur, 29 January 2010. *  *  *  It is my great pleasure to welcome you to the INCEIF's Inaugural Public Lecture by Dr Abbas Mirakhor, a distinguished scholar and the first holder of the INCEIF Chair of Islamic Finance. The INCEIF Public Lecture Series aims to provide a forum for promoting intellectual engagement to discuss the issues, developments and challenges in the area of Islamic finance. The global financial crisis that has dominated the headlines across the world for more than two years has brought to the forefront the fundamental issues in the international financial system that need to be addressed. Now, as the growth prospect resumes, the debate is focussed on the priorities and direction needed to reshape the post crisis world to ensure that the recovery will be sustainable. While Islamic finance has demonstrated its resilience during this period, the industry is now entering into an environment that is fundamentally different in this post crisis era. The international financial reform agenda will result in new structures, standards and regulatory regimes for the global financial industry. Greater financial inter-linkages and integration will also require greater cooperation and collaboration in the endeavour to preserve global financial stability.
253-257. Bernanke, B.S., Gertler, M., Gilchrist, S. (1999), “The financial accelerator in a quantitative business cycle framework”, in J.B. Taylor and M. Woodford (eds.) Handbook of Macroeconomics, pp. 1341-1393. North-Holland. Buiter, W. H., and Panigirtzoglou, N. (1999), “Liquidity traps: How to avoid them and how to escape them”, NBER working paper 7245. Brunner, K. and Meltzer, A. (1972), “Money, debt and economic activity”, Journal of Political Economy, vol. 80, pp. 951-977. Brunnermeier, M. K. (2009), “Deciphering the liquidity and credit crunch 2007-8”, Journal of Economic Perspectives, vol. 23(1), Winter, pp. 77-100. Caballero, R. J., Farhi E. and Gourinchas, P-O (2008), “An equilibrium model of global imbalances and low interest rates”, American Economic Review, vol. 98(1), pp. 358-393. Caballero, R. J., and Krishnamurthy, A. (2008), “Collective risk management in a flight to quality episode”, Journal of Finance, vol. 63(5), pp. 2195-2230. Cecchetti, S., Genberg, H., and Wadhwani, S. (2002), “Asset prices in a flexible inflation targeting framework”, in W. Hunter, G. Kaufman and M. Pomerleano, eds., Asset Price Bubbles: The Implications for Monetary, Regulatory and International Policies. Cambridge, MA: MIT Press, pp.427-444. Chen, N. K. (2001), “Bank net worth, asset prices and economic activity”, Journal of Monetary Economics, vol. 48(2), pp. 415-436. Christiano, L. J., Motto, R. and Rostagno, M. (2008), “Financial factors in business cycles”, mimeo, Northwestern University. Clarida, R., Gali, J. and Gertler, M. (2000), “Monetary policy rules and macroeconomic stability: evidence and some theory”, Quarterly Journal of Economics, vol. 115(1), pages 147-180.

For the gold sales it was planning, the SNB was allocated a quota not claimed by other central banks that were party to the agreement of 2004. The SNB has chosen an approach for its gold sales that will avoid market unrest, with regular sales transactions. The Swiss National Bank holds currency reserves in the form of foreign currency and gold, thereby ensuring that it has room for manoeuvre in its monetary policy at all times. As a result of the sharp rise in the price of gold, the proportion of the currency reserves held as gold has increased by about a quarter since mid 2005, from 33% to the current level of 42%. The purpose of the SNB's gold sales is to rebalance the composition of currency reserves with respect to its monetary policy requirements. Moreover, by reducing its gold reserves and increasing its foreign exchange reserves, the overall risk on SNB assets will decline. Once the sales have been completed, the Swiss National Bank's gold holdings will amount to some 1,040 tonnes. 2. Swiss Interbank Clearing (SIC) to celebrate its 20th anniversary  Over the next few days, the Swiss Interbank Clearing System SIC will celebrate its 20th anniversary. In 1987, the introduction of the SIC payment system represented a revolution for Swiss payment transactions. SIC was one of the first payment systems in the world of the type known as Real Time Gross Settlement (RTGS).
I have also pointed to a number of risks that could lead to a different development than the one we forecast in the Monetary Policy Update. We try to determine the probability of the risks on the basis of incoming statistics. This gives us a picture of what can be regarded as a main scenario and what can be regarded as an alternative scenario. How should a monetary policymaker weigh up new and often contradictory information about the economy that indicates different paths of development? I shall conclude with a few reflections on this. As an economic forecaster, one is confronted by a constant flow of new statistics that often point in different directions. Let me illustrate this by describing the circumstances of our most recent monetary policy decision in April. Statistics Sweden had scarcely published a GDP figure for the fourth quarter that was weaker than expected, when the National Institute of Economic Research published a very strong Economic Tendency Survey for March. Nor is it unusual for statistics to be revised in a way that changes history and throws new light on the initial situation in the economy. As I mentioned earlier, Statistics Sweden revised up the figures for the number of hours worked in connection with the publication of the GDP statistics for the fourth quarter of 2011. This revision entails lower productivity growth for 2010 and 2011 than was reported earlier, and thus a new outlook on the future productivity growth trend, which has significance for monetary policy.

For one, advances in technology, telecommunications, and markets have changed the way that banks collect, measure, and manage their risks. Having gained experience in quantifying exposures to market risk, leading banks today are quantifying and using increasingly reliable estimates of the credit risk associated with particular borrowers. Evolution in markets has furthermore provided banks with more tools for managing and transferring credit risk, such as through securitisation transactions and credit derivatives. Likewise, many banks seek to quantify in a more reliable manner their exposures to operational risk, or the risk of losses stemming from failures in internal processes or systems or from damage caused by an external disruption. As risk management becomes more sophisticated, the simple and static rules of the 1988 Accord are becoming less relevant. Leading banks increasingly view the old rules as a burden, constraining their abilities to administer their businesses relative to the best information and practices available today. Supervisors, for our part, have less confidence in the 1988 Accord’s measures of risk for banks that engage in the most sophisticated forms of risk taking and risk mitigation. By the late 1990s, it became clear to banks and supervisors that we needed a new capital framework. But the Basel Committee sought more than just a reworking of the minimum requirements. We wanted instead to create incentives for the industry to enhance the state of the art in risk management.
4  BIS Review 68/2007  The figure also depicts the estimated average efficiency frontier of MP for emerging economies after IT adoption, for the period of stationary inflation targets (blue line) and the observed pair of output and inflation volatilities (green dot). On one hand, the shift of the efficiency frontier toward the origin reflects the smaller shocks faced by emerging economies since they have had stationary IT in place. On the other hand, the observed combination of output and inflation volatilities has moved closer to the efficiency frontier, revealing the corresponding improvement in monetary policy efficiency. In this case, the smaller shocks explain 58% of the current performance, while the improvements in monetary policy explain 42% of the decline in volatilities. Chile also records massive improvements in monetary policy management. Not only does Chile face smaller shocks, as reflected by the inward shift of the MP efficiency frontier, but also MP efficiency has improved significantly, as reflected by the closer position of observed volatilities to the efficiency frontier (see figure 12). Contribution of central bank policy to macroeconomic stability Emerging economies have improved MP practices. However, the contribution of monetary policy to macroeconomic performance still is low. The annual Report on Competitiveness prepared by the Institute for Management Development (IMD) shows that the positions of emerging economies in the country ranking of the contribution of central bank policy to development has not changed significantly since 1998. However, Chile has recorded major improvements during the past decade.

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