samchain/econo-pairs-v1 huggingface dataset:
After spiking over the next few months, inflation is, we believe, likely to drop below our 2% target due to the downward pressures from a weak level of demand on wages and prices (Chart 6). But it is then likely to climb back towards the target as the economy recovers. Compared with our previous collective forecast last November, there are differences of nuance in the “most likely” and “mean” paths for growth and inflation, but frankly to my mind those nuances are small beer compared to the main risks. My take on those risks is that, on the downside, the headwinds to demand and activity could prove stronger than currently foreseen. And, on the  1  See Tucker P M W (2009e), “The Debate on Financial System Resilience: Macroprudential Instruments”, Barclays Annual Lecture, London, 22 October, 2009. BIS Review 21/2010  1  upside, that we (and our peers) could prove too slow to withdraw monetary stimulus if animal spirits revive across the economy or further spikes in inflation outturns raise medium-term expectations. Meanwhile, the data are bound to be mixed. Four aspects of the conjuncture Against that background, I shall briefly review a handful of the issues that, one way or another, the MPC will face over the coming months. A balance sheet recession? I have a good deal of sympathy for those who argue that the current downturn owes a lot to stretched balance sheets – in the private sector, public sector, and the national economy as a whole.

The Bank of England’s own November Discussion Paper was only one manifestation. Another is the IMF’s recent review of the macroeconomic policy framework. 11 The basic question is whether the authorities could lean against credit-fuelled booms by tightening capital or liquidity requirements for lenders or, as some economists have advocated, by raising the amount of collateral that borrowers have to put up. 12 In principle, this could be aimed at aggregate or sectoral credit conditions, and it could have a goal of making our banks more resilient. It would need to be pursued by executive agencies under clear mandates from legislators, and it would benefit greatly from transparency. A painful lesson for the Bank of England is that our warnings of “underpriced risk” and system-wide fragilities in our Financial Stability Reports were perhaps admired by some but made no difference. And, alongside our domestic and international peers, we are not in this for plaudits! People – the markets, firms, households – take notice of our Inflation Report, MPC minutes and speeches on monetary policy not, essentially, because they might sometimes be interesting or well done, but for the simple reason that the MPC is the body that sets sterling interest rates in the real world. If the authorities were able to deploy credible macroprudential tools, their stability warnings would probably be taken more seriously in future, because they would be able to follow up words with actions. Monetary policymakers would need to be attentive to the use of such instruments, as they would affect credit conditions.
It is true that the signalling has been discussed in several speeches by Executive Board members. But as the idea behind these hearings is that I shall give an account of what has happened since the last time I was here, it seems appropriate to take up this issue again. Earlier the Riksbank applied something that I have on a couple of occasions described as “signalling by degrees”. Between the monetary policy meetings the individual Executive Board members sometimes held speeches where we more or less explicitly indicated how we thought the interest rate should be set at the next meeting. The idea was that sufficient  2  BIS Review 132/2007  information on how the Executive Board reasoned should have come out by degrees to prevent economic agents being taken by surprise when the interest rate decision was made. But since we began publishing our own interest rate forecast the need for this type of signalling between the monetary policy meetings has declined. Now that we will also be publishing our interest rate forecasts every second month, the need has declined further. The general public and the financial markets will now receive at fairly regular intervals a detailed description of how a majority of the Executive Board members consider that the repo rate should be set in the future. This is one of several reasons why we have stopped signalling in speeches prior to coming interest rate decisions, unless there are special circumstances.

Thomas Jordan: Monetary policy and the business cycle Summary of a speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 75th anniversary celebrations of the KOF Swiss Economic Institute, Zurich, 23 September 2013. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Monetary policy contributes to the prosperity of an economy by ensuring price stability in the medium and long term. This makes it possible to put resources to more efficient use, from an economic point of view, and also promotes investment and, with it, long-term growth. Price stability also helps to avoid undesirable distribution effects. Households with lower incomes derive particular benefit from this. Monetary policy can be used to dampen cyclical fluctuations. However, it is not suitable for short-term fine-tuning of the economy. From the point of view of the business cycle, the goal of monetary policy must rather be the reduction of larger risks and the alleviation of extreme situations. An example of one such measure is the minimum exchange rate, which the Swiss National Bank (SNB) set on 6 September 2011 to halt the Swiss franc's upward trend, thus averting a deflationary spiral and warding off the danger of a serious economic crisis. Monetary policy decisions are always subject to uncertainty. It is therefore of key importance that the SNB has a sound decision-making basis.
Overall, there has not been any major change in medium-term forecasts and the monetary policy stance, since economic activity has evolved in line with the outlook presented in the October Inflation Report. However, all the main variables affecting the short-term forecast have been subject to an upward revision. In this respect, while short-term forecasts were revised upwards significantly, there has been no major change regarding medium-term forecasts. The revised forecasts indicate that there will be no significant upside pressures on inflation, even if policy rates remain at low levels for a long period. However, as depicted in the slide, inflation is likely to display a significant increase over the next two months due to tax hikes and strong base effects (Figure 34). Moreover, the annual inflation rate may post a limited increase in the second quarter of 2010, due to the low base effect generated by the Consumer Price Index in the first half of 2009, when the downside effects of the global crisis on prices became more pronounced. Accordingly, even if inflation remains above the target for some time, parallel to the gradual phasing out impact of the tax hikes, inflation is expected to trend downwards, stabilizing at around 5 percent over the medium term. BIS Review 31/2010  15  As you may have noticed, I have frequently referred to the base effect today. The reason for this is that the base effect will influence the course of annual inflation throughout 2010 to a large extent.

You will find our detailed explanatory evaluations regarding the base effect and its effects on 2010 inflation outlook in a box under the third chapter of the Inflation Report to be posted on our website shortly. I strongly recommend that you read these evaluations carefully. The fact that inflation is expected to stay at elevated levels for some time due to tax adjustments and strong base effects highlights the importance of expectations management. In this respect, with the awareness of these temporary factors, it is critical that economic agents focus on the medium-term inflation trend, and therefore, take inflation targets as a benchmark for their pricing plans and contracts. I would like to emphasize once more that any new data or information regarding the inflation outlook may lead to a change in the monetary policy stance. Therefore, assumptions regarding future policy rates underlying the inflation forecast should not be perceived as a commitment on behalf of the CBT. 4. Risks  Distinguished Members of the Press, In the last part of my presentation, I would like to talk about the risks with respect to the inflation outlook in the upcoming period and provide some information pertaining to the probable monetary policy strategy should these risks materialize. The outlook for the domestic economy and the risks thereto has been largely shaped by global developments in line with the intensification of the global crisis as of the last quarter of 2008.
Nina Stoyanova: Adaptation and management of digital portfolios, digital banking services and client contacts in a pandemic crisis Speech by Ms Nina Stoyanova, Deputy Governor and Head of the Banking Department of the Bulgarian National Bank, at the opening of the videoconference "Adaptation and Management of Digital Portfolios, Digital Banking Services and Client Contacts in a Pandemic Crisis", organized by the Banker newspaper, 17 November 2020. * * * I would like to welcome you to the video conference on “Adaptation and management of digital portfolios, digital banking services and customer contacts in a pandemic crisis", organized by the Banker newspaper. In its “Strategy for the Digitalisation of EU Financial Services", the European Commission states that the future of finance is digital. However, we can safely say that not only the future but also the present of finance is inextricably linked to digitalisation. This was clearly seen in the unprecedented situation caused by the coronavirus, in which it was through digital technologies that the continuity of the provision of financial services to consumers and businesses was ensured. The pandemic is about to permanently change our way of life, accelerating the processes of digitalization in all spheres of life – work, entertainment, shopping, administrative services.

As I noted earlier, that reflects the preponderance of adverse cost shocks, which we have largely accommodated, whether by accident or design. But the concentration of such shocks runs the risk that the MPC is no longer seen as taking the target seriously. Having a target in which the acceptable deviations from target are in effect hardwired in might reduce that risk. 6  See, for instance, the forecast errors box on pp.48–9 of the August 2010 Inflation Report. 7  See Bean (1998). BIS central bankers’ speeches  3  Against that, a nominal income growth target has two drawbacks. The first is that the data for nominal income is less timely than that for inflation and subject to revision, sometimes significantly so. Chart 2 shows the first estimate of nominal income growth, together with the current vintage of data; one should not take comfort from the concordance between the two series in the recent past, as the recent data have not yet had much opportunity to be revised! The average absolute revision over 1993–2009 is a full percentage point. Now the susceptibility to revision is hardly a knock-out blow. After all, the data on growth and employment are also subject to revision and recognising that the data are an imperfect guide to reality is part and parcel of setting policy. But the susceptibility of the data to revision would make it somewhat harder for the public to understand the MPC’s objectives and for Parliament to hold us to account.
The figures for the third quarter are unlikely to be dramatically different from what we have seen so far. Unemployment is still rather stable at a relatively low level. We have, of course, started to see the first signs of a slowdown in our major markets with some companies reducing the number of work days and letting go of some employees. We are a very open economy, we depend on external demand and it is only natural that we will be affected. Has personal debt in Malta increased in the last years? As you would expect in a growing economy, household debt has been rising. It is currently estimated at € billion or 48 per cent of Malta's GDP. It was 31 per cent in 2002, but the ratio remains below the euro average of 60 per cent. The interest burden on Maltese households arising from this debt as a proportion of disposable income is comparable to the euro area average at three per cent. Are we saving more? It is unlikely. There has been a declining trend because habits and cultures change. The existence of a very extensive social safety net has acted as a disincentive to save for one's old age. It is appropriate for households to borrow funds to smooth their consumption patterns as long as this is backed by reasonable income expectations. The number of non-performing loans has been coming down for some years in the household sector though it has risen slightly recently to 2.5 per cent.

[23] This result is qualitatively in line with Joyce, M., Tong, M. and Woods, R. (2011), “The United Kingdom’s quantitative easing policy: design, operation and impact”, Bank of England Quarterly Bulletin 2011Q3 who find that “the fall in gilt yields cannot primarily be attributed to signalling effects […] Instead, it is consistent with the main effect coming through portfolio rebalancing”. Bauer and Rudebusch (2014), op. cit., by contrast, find up to one half of the US LSAP effects on yields coming through signalling, challenging earlier literature giving less weight to this channel. In addition, Broadbent (2018) op. cit. argues that the effects of asset purchases and the relative importance of the channels through which they work can vary over time. [24] Duration extraction was highlighted also as a prominent channel for the Federal Reserve’s LSAP, see the seminal paper by Gagnon, J., Raskin, M., Remache, J. and Sack, B. (2011), “The Financial Market Effects of the Federal Reserve’s Large-Scale Asset Purchases”, International Journal of Central Banking, 7(1), pp. 3-43, which stresses exactly the type of mechanism that ECB staff tried to quantify for the euro area: “The LSAPs have removed a considerable amount of assets with high duration from the markets. With less duration risk to hold in the aggregate, the market should require a lower premium to hold that risk. This effect may arise because those investors most willing to bear the risk are the ones left holding it.
Mitigating measures would be most effective if they involved both monetary and fiscal restraint, as well as internal adjustment of the national economy, including a rise in the exchange rate. The more restraint shown on the fiscal side, the less need there will be to raise interest rates. A higher króna exchange rate also means less cause to raise interest rates. The exchange rate was fairly stable from the spring of 2002 until early this winter. It then began to rise and continued to do so steadily until early February of this year. The Central Bank has stated its view that the exchange rate rise in recent months has been primarily due to the effect of the proposed major construction projects in East Iceland. The operations of the aluminium smelter will likely cause the equilibrium exchange rate for the króna to be higher than otherwise. Furthermore, it appears evident that the influx of foreign currency in connection with these projects will be considerable, with higher domestic interest rates than otherwise. All of this affects market expectations and makes the króna exchange rate higher than it would be in the absence of plans for major development in East Iceland. The economy could thus be said to have already begun adaptation to the coming projects, i.e. the exchange rate adjustment has begun and is even well on its way.

If inflation looks likely to exceed the Bank’s target limits in a long-term perspective, the Bank will raise its policy interest rate, or cut this rate if inflation is heading below the target limit. In preparing its inflation forecasts and regular assessment of the economic situation and outlook, the Central Bank examines a wide variety of indicators. These include both statistical data and information  BIS Review 12/2003  1  obtained from interviews with representatives of industry, special interest groups, credit institutions and others. Much of this statistical data is available on the Bank’s website. Decisions by the Central Bank’s Board of Governors are made following in-depth examination of these indicators, based on the Bank’s evaluation of the situation and prospects, the premises behind the inflation forecast and the inflation forecast itself. In accordance with the provisions of the Act which entered into force in the spring of 2001, the Board adopted internal rules on the preparation of, arguments for and presentation of its monetary policy decisions. The rules were formally approved at the beginning of 2002 and published in the quarterly Monetary Bulletin. The inflation target adopted in March 2001 removed the earlier fluctuation bands set for the ISK exchange rate and the exchange rate was floated. The new monetary policy framework was introduced under rather difficult conditions, with a sliding exchange rate and mounting inflation. It is fair to say that the tight monetary stance is the main reason that inflation receded as sharply as it did in 2002.
By reducing reliance on retail deposits, it reduced barriers to entry. Lenders’ margins fell (Chart 16), and credit conditions in the UK mortgage market eased. Conversely, the painful reminder that undiversified funding and income sources may leave a bank unusually vulnerable will probably bring about another shock to the structure of the market. The persistent tightening in mortgage credit that that would bring was a factor in the MPC’s November projections. In the near term, the extent to which the big or more diversified banks fill the gap will depend on the extent to which they too preserve capital and liquidity in the face of the harsh environment I have described. Money, or bank intermediation So far I have focused entirely on credit. Where does this leave money (or Money), the starting point for much traditional monetary analysis? Well, much that I have said about banks – their capacity, in the short run, to lever up their balance sheets and expand credit at will; their role in providing liquidity insurance to investment vehicles and corporates – turns precisely on their liabilities being money. And for this reason, banks are after all decisively different from other intermediaries. As transactions balances and so the means of exchange in our payments system, the moneyness of bank deposits lies at the core of credit intermediation.

Your Honour, This conference follows a similar one held in Botswana hosted by the Botswana Central Bank from 5 to 6 February, 2007 and supported by the BIS Governance Forum and the IMF. It also comes shortly after our very successful conference held at this same venue in November last year on the theme, “Central Bank Independence, Does It Hurt the Treasury?” All these activities are part of the building blocks to a bigger project we have been undertaking in the SADC region aimed at developing a Model Central Bank Act. For us in Zambia, efforts at perfecting the governance as well as the operational efficiency of the financial sector are being done through the Financial Sector Development Plan (FSDP). Under the Plan we have already developed Corporate Governance Guidelines for the financial sector as a whole. Many of these have a lot of relevance to the Central Bank as well. Through the FSDP, even issues such as who should chair the Board of the Central Bank are being discussed. Lastly, let me say that we expect to learn from what other central banks have done, and what challenges they have faced in their quest for enhanced central bank governance. However, it should be noted that each country should establish a legal framework for its central bank governance, which best fits that country’s own history and institutional evolution. This should also take into account international best practice.
In other words, these borrowers have been permanently denied of access to formal lending institutions. BIS Review 66/2006  1  There may be others in this group such as the SMEs, the retailers, self-employed and micro borrowers who, for reasons beyond their control, have faced the same fate. Even if a few of them have the potential, in terms of their cash flows or earning capacity, to repay debt at a later time and become honourable customers, the negative label issued by the CRIB would not give them another chance of reaching formal credit institutions. The inevitable result would be to drive them back to the informal sources of borrowing or to seek political redress. There is no doubt that there could be several willful defaulters in this group who deserve to be blacklisted, but among them the influential ones will seek ways and means of getting back into the system. It is well known that the banks and the credit institutions do not report the full list of borrowers to the CRIB. It is also no secret that the institutions cherry-pick the borrowers according to the former’s preference. The affluent borrowers, multi national companies, large corporates, highly connected borrowers and the banks’ other preferred customers do not get reported to the CRIB, even if they default altogether. The credit profiles of the affluent customers will continue to have clean records of regular payments which protect their image.

Ranee Jayamaha: The financial performance of the Credit Information Bureau in Sri Lanka during 2005 Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Annual General Meeting of the Credit Information Bureau, Colombo, 23 June 2006. *  *  *  Members of the Head Table, the Board of Directors, the Shareholders of the CRIB, Chief Executives and Officials of Banks and Financial Institutions, Ladies and Gentlemen. I am pleased to present to you this evening the Chairperson’s report of the CRIB which summarizes the significant growth in business operations and the financial performances of the CRIB during 2005. Sri Lanka’s CRIB is one of the pioneer credit information bureaux in the South Asia region since its establishment in 1990. The year 2006 is a landmark in its history as the CRIB will begin to re-engineer its core business processes with enhancements and upgrades to the technological infrastructure. As indicated in the Annual Report, during 2005, the CRIB has recorded a remarkable growth in its businesses and achieved its primary objective of collecting, collating and dissemination of aggregate credit information for the use of stakeholder institutions. Reporting of credit information to, and complying with the Bureau’s requirements are mandatory and the CRIB has made a conscious effort to educate the member institutions of the reciprocal benefits of providing reliable credit information. Throughout the year, the CRIB has continued follow up work in refreshing and updating the existing credit database.