samchain/econo-pairs-v1 huggingface dataset:
According to our estimates, annual inflation is expected to be higher than we forecast in April but lower than its current level. Due to the high base effect in the first half of this year annual inflation will return to the target only in the second half next year. Third. Monetary conditions remain accommodative. Interest rates on loans and deposits are low as compared to current and expected inflation. Our decisions to raise the key rate in March and April have not yet been fully reflected in banks’ interest rates. Banks’ lending and deposit rates are closely connected with yields on government bonds, OFZs. OFZs are risk-free ruble assets for banks and the pricing of all other ruble products of banks is pegged to them. OFZ yields with various maturities change together with the key rate, though to a different extent. The key rate impacts to the most extent the yields on short-term OFZs, with maturities of up to two-three years. These yields have increased significantly over the past two months. They will impact the cost of short-term loans and also deposit rates, which have already started rising. Meanwhile, yields on long-term OFZs are largely determined by long-term inflation expectations, the assessment of the macroeconomic policy stability, and external environment. The cost of long-term financing of investment projects as well as mortgage loan rates depend precisely on the yields on long-term OFZs.

This is associated both with borders closed for labour migrants and with the expansion of several industries’ need to hire more staff than before the pandemic. The annual growth of nominal wages remains within the range of recent years. Accommodative monetary policy was required to ensure a faster return of demand to its prepandemic level and to restore output. Once recovery is completed, supply cannot keep pace with further fast expansion in demand. Therefore, accommodative monetary policy would continue to step up inflation rather than expand output. This brings us directly to the second factor underlying our today’s decision. Inflation becomes a growing concern. In May, annual price growth rates reached 6%, considerably exceeding the target level. The current inflationary pressure has intensified. The average three-month (from March to May) seasonally adjusted price growth peaked up to a maximum since January 2016. Similar trends are observed for other indicators of price dynamics under our consideration. It does not seem correct to attribute this elevated price growth exclusively to the impact of transitory supply-side factors, in particular, global price movements. Let me remind you that this explanation was the main one when prices picked up in Q4 last year. At that moment, doubts indeed persisted as to the sustainable nature of demand recovery given the ongoing pandemic. Nonetheless, even then we aired fears that the rise in inflation expectations driven by these external shocks might transform one-off proinflationary factors into sustainable ones.
The type of regulation to which it should be subject is also uncertain. Irrespective of what the future may hold, banks’ classical role remains fundamental today to economic development. In the absence of deep secondary markets at the European level, where it would be possible to convert long-term funding into liquidity through the market, the banking sector is still the main vehicle through which savers’ wish to have their savings available can be reconciled with the need of those demanding funds to have stable funding over time.1 Naturally, this does not mean that credit growth should always be positive, as we were painfully reminded by the crisis. In this respect, the debt ratios of households and firms in Spain reached excessive levels of 85% and 133% of GDP, respectively, before the crisis broke. Fortunately, since their 2008/2009 peak, debt ratios have moved on a markedly downward trend, converging late last year with the average EU levels of 60% for households and 90% for firms. Bank lending has been decreasing throughout this period of household and corporate deleveraging. Nonetheless, this decrease has recently reversed. Specifically, if we look at 12-month cumulative data, the net flow of financing granted to households turned positive in June 2018, posting a year-on-year growth rate of 0.5% in April 2019. Firms’ net global financing flows have also held at positive levels since October, attaining year-on-year growth of 2.6% in April 2019.

This awareness also reflects the difficult economic and financial context in which we have been moving. Evidently, financial end-consumers, especially individuals, are the weakest party in the customer-bank relationship.4 Hence the importance of banks behaving irreproachably when it comes to advice to customers to engage their services. However, we should acknowledge that the starting point is a significant shortfall in financial knowledge among citizens, a fact that may have been conducive to erroneous decision-making. Evidently, to be able to take an economic decision properly, a customer must be in full possession of all information and capable of understanding the implications that may arise in the future from what is to be signed. For instance, the consequences of taking on a variable interest rate throughout the life of a 30-year loan need to be understood, and variable income must be assumed to be so-named because of its variability. Admittedly, the younger generations are facing growing challenges arising from labour market aspects. These include the lack of job security, the need for flexibility and mobility, and property market developments. They are also especially affected by the structural changes in society, such as increased life expectancy or the reduction in the birth rate. This all involves the need to plan carefully for the future. We should not forget that education and financial knowledge are essential for improving financial inclusion. Clearly, digital transformation may help in this respect, especially in remote or thinly populated areas.
If the incentives are low for workers to quickly change jobs and move to a new sector, at the same time as the incentives for firms to employ labour from a different sector are reduced by high initial wages, costs of sick leave and job security, there is a risk that more people will get stuck in the transition. This would entail a rise in frictional unemployment. In addition, the risk of long-term unemployment rises if more people become discouraged and stop looking actively for work. The Swedish labour market has previously functioned efficiently in these respects. Think of the closing down of almost the entire textile industry and of the shutdown of the Swedish shipyards at the same time as the paper and pulp industry and the iron and steel industry were rationalised considerably during the 1970s. Not least the trade union movement, more specifically the Swedish Trade Union Confederation, helped facilitate structural change. Read the official reports from 1941, 1951 and 1961 for the Confederation’s conferences in those years. The findings of these reports are something we need to take in today. The trade union movement realised that structural change was the prerequisite for increasing real wages and for generally higher prosperity. Conclusions I believe that it’s fully possible with the right methods to achieve both an employment rate that is sharply higher and an unemployment rate that is considerably lower than today’s level.

The fact that employment depends on a number of other factors than monetary policy decisions and cyclical variations is illustrated, among other things, by the miscalculations of the National Labour Market Board just prior to 2004. In November last year the Board estimated that Swedish economic growth would be 1.4 per cent in 2003 and 1.9 per cent this year, while unemployment was forecast to be 5.1 per cent this year. Moreover, the Board believed that the repo rate should be cut from 2.75 to 2.25-2.5 per cent. These forecasts were roughly in line with those of the Riksbank at that time, with the exception that we, as usual, based our forecasts on the assumption that the repo rate would be kept unchanged. A year later we can say that economic growth has exceeded both the National Labour Market Board’s and our expectations at the same time as the monetary stance has become looser. Nevertheless, labour market growth has been weaker. This shows both that forecasters can be surprised by unexpected developments in the economy and that unemployment at present is not chiefly due to insufficient demand for goods and services owing to low growth and tight monetary policy.
CHALLENGES FOR THE HUNGARIAN BANKS As I said right at the outset, it is now time to look ahead and begin to address some major issues for the Hungarian banks - issues which, thanks to the progress made over the past few years, are no longer totally dissimilar from those facing banks in western Europe. I intend to make a few comments on these, since they are issues on which I can possibly throw some light on the basis of my own professional experience. 1. The first is about the specificity of banking, i.e. about the possibility or desirability of clearly distinguishing banks, through rules and regulations, from other financial intermediaries. I noted that the recent changes in Hungarian banking law have implied a movement towards the de-specialisation of banks, notably in the field of securities transactions. I believe that a development towards the universal banking model is justified - on certain conditions. It is justified for two groups of reasons. First, because financial innovation in general, and securitisation in particular, are breaking down the traditionally neat distinction between banks and other financial intermediaries, indeed even between financial intermediation and financial markets, all over the world. Some time ago, banks were defined as financial intermediaries whose liabilities (mainly sight and short-term deposits) were equivalent to the money supply, and the money supply was defined as the total sum of bank liabilities.

We are already seeing, for example, an expansion of partnership models with non-traditional intermediaries such as e-commerce and e-hailing platforms, which has enabled the offering of 'sachet insurance' or bite-sized insurance covers to consumers at 'point-of-sale'. I am intrigued at how consumer wearables with glucose monitoring technology are being used as data points to overcome traditional pricing barriers for specialised medical cover to diabetic patients. There can be no mistake – innovation is occurring across multiple dimensions, spanning beyond the product level towards the whole business operations, even birthing entirely new digital-only institutions. At our end, Bank Negara Malaysia is doing our part to ensure a progressive and dynamic market – one that is welcoming of these novel business models and new entrants. The Digital Insurance and Takaful Operator Framework Discussion Paper published earlier this year emphasises inclusion alongside competition and efficiency as  2/6  BIS - Central bankers' speeches  value propositions that we look for in assessing prospective applicants. As we work towards issuing the Exposure Draft by the midyear point, I encourage applicants who can demonstrate strong capabilities in these three areas and meaningfully close critical protection gaps in Malaysia to come forward to be part of the journey. Beyond new entrants, we also envision data sharing platforms to be a key enabler in making critical protection solutions affordable, through better cost control management and price transparency. Highlighted in our recently launched Financial Sector Blueprint, the cost of private medical care in Malaysia is among the highest in Southeast Asia.
Mario Draghi: Sovereignty in a globalised world Speech by Mr Mario Draghi, President of the European Central Bank, on the award of Laurea honoris causa in law from Università degli Studi di Bologna, Bologna, 22 February 2019. * * * It is a great honour to be speaking here today at the University of Bologna. As Europe’s oldest university, it has been at the heart of education and learning in Europe for over 900 years. It has a long history of welcoming students from across the continent, including Thomas Beckett and Copernicus. Erasmus studied here in 1506, and the University of Bologna is today a leading participant in the student exchange programme that bears his name. The Erasmus Programme is one of the many examples of the benefits of the close cooperation within the European Union that enjoy widespread popularity. But we know that other elements of European integration are more contested today. At the root of this debate is the inherent tension between the clear gains of economic integration, and the cooperation that is necessary to bring it about, which can sometimes be politically difficult to achieve or explain. I would like to argue that, in many ways, this tension is illusory. Rather than taking away countries’ sovereignty, the EU offers them a way to regain it. This does not mean we need the EU for everything. But in the face of globalisation, the EU is more relevant than ever today.

[3]John Locke, An Essay concerning the true original, extent and end of civil Government, 1690. [4]UNCTAD (2018), World Investment Report 2018: Investment and New Industrial Policies. [5]There is some debate as to whether technology will evolve in the future in ways that make  global value chains less important. Technologies such as 3D printing or robotics could allow the local production of many more goods. Some scholars find that technological change has so far only mildly slowed offshoring, while others see a more significant reversal ahead. See Koen De Backer, K., Menon, C. Desnoyers-James, I. and Moussiegt, L. (2016), “Reshoring: Myth or Reality?”, OECD Science, Technology and Industry Policy Papers, No 27, OECD Publishing; and Baldwin, R. (2016), The Great Convergence: Information Technology and the New Globalization, Harvard University Press. [6] 8 / 10  BIS central bankers' speeches  [6]OECD (2018), OECD Economic Outlook, Volume 2018, Issue 1, Chapter 2. [7]in ‘t Veld, J. (2019), “Quantifying the Economic Effects of the Single Market in a Structural  Macromodel”, European Economy Discussion Paper, No 094, European Commission, February. [8]This scenario assumes a counterfactual in which trade reverts to WTO-rules, and applies  Most Favoured Nation (MFN) rates as tariffs on goods. For non-tariff barriers, it relies on estimates calculated for trade between the EU and the US. See in ‘t Veld, J. (2019), op. cit. [9]As measured by PPP-adjusted GDP. [10]Excluding intra-EU trade. [11]For further details, see ECB (2015), The international role of the euro, Frankfurt am Main, July.
Re-reading Lord King’s article from today’s perspective, I am struck by the concerns he identified in his conclusion. He expressed a fear that relegating money to a behind-the-scenes role in the formulation and analysis of monetary policy entailed three dangers: (1) by obscuring the classical dichotomy, people would be misled into thinking that there is a permanent trade-off between inflation, on the one hand, and output and employment, on the other; (2) by discussing monetary policy in terms of real rather than monetary variables, the impression would be given that monetary policy can be used to fine tune short-run movements in output and employment, in denial of the ‘long and variable’ lags in monetary policy transmission; and (3) by dropping money, those parts of the monetary transmission mechanism that operate through the impact of monetary quantities on risk and term premia – which would necessarily come to the fore as policy rates reached their effective lower bound – would be neglected. With all the caveats of the preceding discussion, circumstances have dictated that the lattermost danger has been managed. Following the financial crisis, central banks have reduced policy rates to their effective lower bound, and become dependent on monetary transmission via precisely the risk and term premia channels that might otherwise have been neglected.

The Kijang Emas Scholarship is distinct from the Kijang Scholarship in that the recipients are given the freedom to pursue any field of study at top universities in any country of their choice. The Bank also does not impose any bond on the recipients except that they return, contribute and partake in the development of our nation. To date, 44 high potential talent have been awarded the Kijang Emas Scholarship. The recipients have graduated or are currently pursuing their studies in diverse fields of study including Medicine, Engineering, Law, Economics, Dietetics, Actuarial Science, Accounting, Dentistry, Biochemistry, Genetics, Architecture, Psychology and Geophysics in top universities around the world such as MIT, University of Pennsylvania and the University of Cambridge. Thus far, 11 Kijang Emas scholars have completed their undergraduate studies and have returned to serve the nation, while another seven scholars are expected to complete their studies in the next six months. For the 2015 Kijang Emas Scholarship, we received a total of 212 applications from top SPM students scoring straight A+ for their 2014 SPM. From this, the Bank shortlisted the top 24 students based on their SPM results and also on their level of involvement in co-curricular and sports activities. The students then underwent a rigorous evaluation process under the Bank’s “Kijang Academy” which assessed their technical and leadership competencies, as well as their values. We are pleased to award four outstanding students the Kijang Emas Scholarship this year. Having just completed their SPM, they will be enrolled into the respective pre-university programmes.
The latter episodes have typically been associated with periods of rapid technological th  th  th  change, as after the three industrial revolutions of the mid-18 , mid-19 and mid-20 centuries. In each case, there was a significant lag between the arrival of new technologies and their impact on productivity. Rates of technological diffusion were relatively slow and sedate. This is typically felt to have reflected the time it takes for new technologies to find widespread use and become General Purpose Technologies (GPTs). 34  After the first Industrial Revolution, it took around 70-100 years for technological  diffusion to occur, GPTs to emerge and TFP and living standards to rise. 35  Subsequent industrial revolutions have also seen a lag between the emergence of new technologies and their impact on productivity. But there is evidence this diffusion lag may have shortened. Comin and th  th  Mestieri (2014) estimate the diffusion lag during the industrial revolutions of the late 19 and 20 centuries to have been 20-30 years, roughly a third of that during the first industrial revolution. This may have reflected increased flows of labour, capital, ideas and information between firms, regions, sectors and countries. Table 1 looks at average rates of UK TFP growth over the past 2000 years. It tells a tale of long waves of productivity stagnation and innovation. The historical data do not reject either hypothesis. Table 1 also puts into historical perspective the UK’s recent productivity slowdown.

As we recognize in the sensitivity and risk scenarios of this MP Report, this is one possible outcome and its implications for the economy should be carefully monitored. While this is a matter in progress that we must follow closely, inflation has remained high for a long period of time and continues to be a complex and high-impact problem. The costs of this situation are evident. We have all felt the effects of rising prices in our daily lives, and a part of the population has suffered the hardest. Inflation introduces risks and distorts the information contained in prices, thus affecting investment, growth and employment. It is not possible to contemplate sustained growth in employment and activity if inflation is not kept under control. Therefore, bringing inflation back to the 3 percent target is an unavoidable task. I want to insist that, even if total inflation is on a downward path and will soon return to single-digit figures, the problem has not been solved. The convergence of inflation to 3% has not yet been consolidated and as long as it remains above that figure, the task of the Central Bank will not be complete. The causes of inflation have been discussed at length. The main one was the excessive increase in spending that led to the liquidation of social security savings and across-the-board fiscal transfers. In addition, there was the pandemic and its consequences on the local economy and in global production chains, plus the effects of the war in Ukraine.
The experiences indicate that financial crises are something we will have to live with. But to reduce the risks of financial crises, with major socioeconomic costs, central banks and other players need to have the mandates and tools to prevent financial crises, along with flexibility and liquidity when a crisis actually occurs. The challenges facing the Riksbank and other central banks, and which I have tried to describe in this speech, are partly the result of the experiences gained during the latest crisis. But they also have to do with more long-term structural changes in the financial system, such as globalisation and innovations in the mediation of payments and credit. The challenges also relate to monetary policy, and this is something that often receives a great deal of attention in the debate. But, as I hopefully have shown, there are many other and perhaps even more important areas where the need for new thinking is even greater. If you’ve been in the business since 1668, it’s important to think in new ways now and again. BIS central bankers’ speeches  17  References Acharya, V. (2015), “Financial Stability in the Broader Mandate for Central Banks: A Political Economy Perspective”, Hutchins Center Working Paper #11. Archer, D. and P. Moser-Boehm (2013), “Central bank finances,” BIS Papers, No. 71, Bank for International Settlements. Ball, Laurence M. (2014), “The case for a long-run inflation target of four percent,” IMF Working Paper, WP/14/92, International Monetary Fund.

Linked to this shift, a property debt overhang is leading businesses with such property exposures to experience more constrained access to finance, something that, other things equal, will take time to work through. Our evidence tends to support this dichotomy between the position of companies where commercial property is either the source of their business or the source of their security for borrowing, and those where there is no such dependence. The conclusions I draw from this are that as well as our part in creating the right incentives for credit to be on offer, there is a need to extend the work done by Kate and her colleagues, to consider information flows in terms of particularly of credit assessments, and the issue of whether some types of commercial property are acting as a restraint or access to finance. It is also consistent with comments I hear from businesses and banks that the “distribution” capacity of SME lending lags a long way behind the mortgage market. In conclusion, we are determined to put behind us the legacy of issues that have called into question the capital position of banks during the crisis. We are approaching the sixth anniversary of the start of the crisis, so this is hardly overly hasty action. The resilience of the financial system is our objective, but this is not just for its own sake but also to support the economy and credit creation.