samchain/econo-pairs-v1 huggingface dataset:
One point worth noting is that the volatility of international financial markets has diminished. In the domestic monetary policy front, a significant development of recent months has been increased inflation, which is now above 4 percent in annual terms. Although this was expected to some extent because of inflation’s previous level and especially because of the normal pass-through of the exchange rate depreciation to domestic prices, the actual figure exceeded not only our latest IPoM’s forecasts but also private expectations. Our projection scenario assumes that inflation rising above 4 percent is a temporary phenomenon and that it will return to 3 percent annually within our normal monetary policy horizon, a vision that is also reflected in medium-term private inflation expectations, which have remained at 3 percent. In this context, the Board has communicated that it will consider the possibility of making additional cuts to the monetary policy rate in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook. The slowdown in output and demand should take pressure off future prices, but in an environment of already expansionary monetary policy and where prices have risen above projections, it is necessary that the Central Bank carefully weigh the risks surrounding its decisions. Let me now share with you our baseline scenario and the main risks we have covered in the two reports I am presenting. Macroeconomic scenario The y-o-y variation of the different CPI measurements has increased significantly in recent months, and as I said, more than foreseen.

This support has taken various forms, including the following:   Salary supplementation to fifteen (15) academic staff in the Department of Economics at UNZA and nineteen (19) academic staff in the School of Business at the Copperbelt University (CBU);    Full sponsorship of five undergraduate students at third and fourth year level at CBU and five students at Masters Degree level at UNZA;    Financial support in the acquisition of books and periodicals;    Purchase of equipment such as computers and computer software. The Bank of Zambia acknowledges the various efforts being made by the University to improve its infrastructure and the delivery of quality university education and research. We are also mindful of the various funding constraints faced by the University as it expands its programmes to meet the ever increasing demand for its services. The Bank is therefore, proud to respond to the University’s call for partnership with industry and other stakeholders in order to realise its noble objectives that cannot presently be fully funded from public resources and students fees. In this regard, the Bank of Zambia has seen it fit to not only extend this support, but to also streamline and enhance it in order to better align this support with strategic objectives of both the Bank and the University. Ladies and Gentlemen; as you are aware, the Bank of Zambia has been providing financial support for the purpose of promoting scholarly and academic excellence in research and instruction at the University of Zambia.
But, having said that, it would be wrong to conclude that financial globalisation is to be blamed for the financial turmoil as it cannot be considered responsible for the fundamental causes and key weaknesses I identified earlier and which resulted in the associated mispricing of risks and the mismanagement of assets and liabilities by some financial institutions. On the contrary, financial globalisation has contributed, other things being equal, through international risksharing to cushioning the impact of shocks on national financial systems and economies and it has also facilitated the boosting of the capital buffers and the restoration of the balance sheets of banks weakened by the turmoil. Beneficial cooperation between authorities The recent financial market episode has highlighted an important implication of financial integration for central banking: the usefulness of effective cooperation and coordinated action by central banks in managing liquidity and ensuring the efficient functioning of interbank money markets. It has also clearly shown the benefits of closer cooperation and improved information-sharing between financial supervisors and central banks. Such enhanced interaction would contribute to a better assessment of the potential systemic implications of financial shocks, and assist in addressing market tensions or problems faced by individual financial institutions. IV. Globalisation, monetary policy and financial stability  There is one final and important issue I would like to briefly consider: the interrelation between globalisation, monetary policy and financial stability.

So far, however, there is simply not as much historical evidence availab le about the impact of QT, because we have observed more episodes of balance sheet expansion than of balance sheet contraction. A number of considerations support a prudent approach, since the response to QT could be stronger than the response to QE. First, the fiscal landscape has deteriorated in recent years. Public debt to output ratios have climbed sharply since the onset of the pandemic, because governments have run very large deficits over the course of the pandemic and because output has fallen. The current inflation surprise somewhat reduces the real value of this debt, but this effect is small compared with the strong increase in debt levels since the pandemic began. The greater the amount of debt that private markets must absorb, the lower the liquidity in sovereign debt markets and the higher the yields that markets will demand in order to equate supply with demand. Accordingly, this factor tends to magnify the impact of quantitative tightening on the term premium11. Second, the impact of balance sheet policies may also vary depending on liquidity conditions. In QE times, more liquidity injected into the system did not have a major impact since the market was saturated with excess cash and thus money market conditions were rather insensitive to additional liquidity injections.
Such problems have been encountered in Western market economies. It is clearly in Hungary’s interest to build up, or consolidate, the appropriate defences against the emergence of such problems. BIS Review 16/1997  -6-  5. In order to avoid any misunderstandings, I am not launching any appeal in favour of overregulation. In a market economy, the best regulator is the market itself. And when spontaneous market regulation fails - which does happen - the second-best solution is to use regulatory techniques which favour the emergence of market-led self-regulation. I am simply trying to make two points. First, that banking and finance have broader and more general implications for the economy as a whole than any other kind of activity. A crisis in, say, the steel industry creates hardship, but it does not create a general crisis. A banking crisis may well do so. Second, banking and finance are evolving at a very fast pace under the combined influence of technological progress, innovation and globalisation. This needs a careful adjustment of the regulatory framework, not its general weakening. 6. In a very different area, may I call your attention to the need to develop both retail banking in the narrow sense of the term and also banking services to the dynamic sector of small and medium-sized enterprises. In these fields, Hungarian banking is vastly underdeveloped, both in the number of consumer-friendly local offices and, even more importantly, in the range of high-quality banking services offered to these two groups of customers.

But from the onset of the crisis in August 2007, the ECB took swift and decisive action to provide liquidity in the interbank money market in order to alleviate the stresses and ensure, to the maximum extent possible, that liquidity problems would not turn into solvency problems, and that systemic risk would be effectively contained. During this first phase of the crisis, the Eurosystem engaged in active liquidity management adjusting the intertemporal distribution of liquidity provision within the reserve maintenance period, but without changing the total supply of bank reserves over the entire maintenance period. At the same time, the maturity profile of the refinancing operations was altered, but the overall supply of central bank money was kept broadly unchanged. As a result, between the end of June 2007 and the end of September 2008, the balance sheet of the Eurosystem increased only moderately by about 100 billion euro. 4 Therefore, for more than a year since the eruption of the financial market turmoil, the unfavourable combination of, on the one hand, persisting and increasing inflation risks and, on the other, substantial stresses in the financial systems and risks to its stability required a “separation” of the monetary policy stance from the management of liquidity. The former was defined so as to achieve the primary objective of preserving medium-term price stability. The latter aimed at, and was effective in, mitigating pressures in the money market and tensions in other financial markets, as measured, for example, by CDS spreads and corporate bond risk premia, which gradually eased.
Once the appropriate level of the key interest rates has been set, the Executive Board of the ECB implements its monetary policy stance so that the effects of its interest rate decisions are transmitted to the financial markets and the real economy effectively. In this sense, the ECB had to act swiftly and decisively to avoid that tensions in the money market would spill-over to other markets and adversely affect the real economy. So we had to clearly convey two complementary messages. One was that the ECB was determined – from the onset of the financial crises in August 2007 – to ensure the orderly functioning of the euro area inter-bank money market by offering supplementary liquidityproviding refinancing operations or – more recently – by widening the collateral framework to facilitate the provision of liquidity to merchant banks and to engage in unlimited provision of liquidity for all our refinancing operations at a fixed rate. The other message which is fundamental was to raise the public’s awareness that the exceptional interventions aimed to alleviate the tensions in the money market would not compromise the longer-term achievement of price stability in line with our definition less than 2%, but close to 2%. Conclusions Let me conclude. The fundamental changes in central bank communication have helped to enhance the effectiveness, predictability and credibility of monetary policy and have notably contributed to lowering both inflation rates and volatility in the real economy.

The old belief was based on the notion that a central bank would measure the success of its actions by the extent to which economic activity could be raised and maintained above potential. If rational individuals already expect a certain change, they adjust their behaviour to that expectation. And that means that a monetary policy change would have no effect. In the past fifteen years, however, two important developments changed the theory and practice of central banking. First, the assumption that successful monetary policy acts by surprises and is made by a sequence of isolated steps has been the subject of thorough theoretical scrutiny and is now close to oblivion. It became clear that policy-making by surprises and isolated steps will bear no lasting effect on the economy once the public recognises the intentions that motivate the monetary authority. A monetary policy strategy made of isolated actions with the intention of boosting output above potential is bound to lose effectiveness because the short-term inflationary impact of that policy soon becomes embedded in price and wage expectations. Output and employment react in the very short-run, but in the medium term the economy suffers from a permanently higher inflation. The drive toward central bank independence provided an additional encouragement for transparency. Today an overwhelming majority of central banks across the globe is independent. The political and functional independence of central banks has been an important milestone in the way towards separating the authority to tax and spend from the power to control credit conditions.
Its internationalisation is manifested by the increased presence of Islamic financial institutions in new jurisdictions, the increased international participation in Islamic financial markets and the increased cross border flows that are Shariah compliant. Today, there are more than 600 Islamic financial institutions that operate in more than 75 countries. The sukuk market in particular, has evolved as a major contributing factor driving the internationalization of Islamic finance. It has become an important avenue for international fund raising and investment activities, generating significant cross-border flows. Following the return of investor confidence reflected by the strong performance of financial markets in 2010, activity in the sukuk market also gained momentum. Islamic finance has become the fastest growing segment in the international financial system. Moving forward, the international dimension of Islamic finance is set to become even more pronounced in this post crisis-era. With the intensification of this globalization process, we need to be mindful of the important lessons from the recent global financial crisis of ensuring the quality and soundness of the financial integration process. Whilst the growing internationalization of Islamic finance essentially reflects its ability to be competitive and its ability to meet the changing demands of businesses, its resilience has been important in supporting this trend. This resilience is essentially underpinned by two inherent strengths of Islamic finance.

This is especially supportive and important for the low income groups, which are hit harder by the negative effects of high and persistent inflation. However, the general public must understand that the outlook is subject to considerable uncertainty, and amidst such profound uncertainty, amplification mechanisms may arise from multiple channels, due to the close interconnections within the global financial system. I am happy to see that all these issues will be discussed in depth during this workshop. In fact, the agenda is quite rich and covers a vast variety of research topics related to monetary and fiscal policy, financial stability, policy coordination, risk assessment and management through macro-prudential policies, with a special focus on price dynamics and soaring inflationary pressures witnessed worldwide, and the associated challenges they poses to policymakers, at both macro and microeconomic perspectives. We are all waiting impatiently to hearing what the respective speakers have to say about the duration and the intensity of such pressures and any potential implications for monetary policy. I am sure it will provide an excellent opportunity to gain new insights from academic research. Looking forward, beyond the dramatic events we are currently witnessing, technology coupled with the transition to an economy with net-zero carbon emissions will continue to shape the evolution of markets and of both traditional and new financial service providers.
Here, the government has to incite the establishment of other companies as well as apply the reduced taxes. Another way of amplifying competition in the sector is by pressing on price transparency. Remittances, as mentioned earlier, are also affected by economic and financial situation in beneficiary country. International experience brings many examples to illustrate this point. After a constant growth of remittances in Philippines, as a result of improvements in the investments environment in the early 90s, they became very shaky as the financial crisis affected the Asian countries at the end of the 90s. Likewise, Turkey after experiencing a stable growth of remittances during the 90s, saw a drastic fall as the financial crisis broke out in 1999-2000. However, an interesting observation in these cases is that, the fall of remittances and their volatility were lower than those of private capital flows. Remittances seem to react less to economic ups and downs compared to other capital flows displaying considerable stability over time (Ratha, 2003). In this context, countries with high remittance percentage relative to other capital flows could be more immune to capital drain during crises. Remittances are not simply expression of emigrants’ fondness to assist their families in adverse situations. They also represent an important financial source that augments capital inflows and investments in economy. Remittances may have a positive impact not only on the volume but also on the quality of investments.

In the case of Albania, as in many other developing countries, remittances enter the country by either formal or informal means. The most recent surveys show that only 22.6 percent of emigrants prefer to use official means, whereas 77.4 percent turn to unofficial channels – in most cases by themselves. The official network includes the commercial banks and money transfer companies, the activity of which is regulated and supervised by BoA. Money transfer companies (Western Union and Money Gram) have played a significant role in transferring remittances from the beginning of their activity in the 90s. Their wide geographical extension throughout the country covering also many rural areas has complemented adequately the rather slow expansion of the banking sector in facilitating money transfers. Lately, the official network has gained considerable grounds over the informal ways in terms of total transfers carried out. The volume of remittances channelled via official means in 2004 is estimated to have been around 46 percent of the total, as opposed to just 12 percent - the average for the period 1994-1996. It seems the official network has earned Albanian emigrants’ trust for transferring their money. The development of the financial system in Albania it’s a key factor in explaining the movement of transfers toward official means. Thus, only during 2004, there have been 30 new branches and banking agencies opened throughout the country. Nevertheless, the unofficial flows remain still high, accounting for more than half of the total volume.
And, I would like to invite all of you to tomorrow’s dinner to commemorate its achievements in the past quarter of a century together. Ladies and Gentlemen, May I take this opportunity to wish all of you a successful and fruitful deliberation, and an enjoyable stay in Thailand. Thank you. 2  BIS Review 88/2007

14  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  14  References  Akerlof, G and Shiller, R. 2009. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. Princeton. Gigerenzer, G. 2004. ‘Dread Risk, September 11, and Fatal Traffic Accidents’, Psychological Science, Vol 15, Issue 4. Grupe, D and Nitschke, J. 2013. ‘Uncertainty and Anticipation in Anxiety: An integrated neurobiological and psychological perspective’. National Review of Neuroscience. 2013 Jul; 14(7): 488–501. Haldane, A. 2015 ‘Stuck’. Speech to the Open University. Haldane, A., Chowla, S. 2020. ‘Fast economic indicators’. Nature Reviews Physics. Nessen, R. 2008. ‘The Brookings Institution’s Arthur Okun – Father of the “Misery Index”’. Brookings Op-Ed. Okun, Arthur M. 1962. ‘Potential GNP: Its Measurement and Significance’. American Statistical Association, Proceedings of the Business and Economics Statistics Section, pp. 98–104. 15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15
But they should be supported by strong institutions with discretionary powers. Mario Draghi pointed out 1 the fundamental difference between a monetary policy institution and fiscal rules, which are exemplified by the track records of the ECB and SGP respectively. Third, there is room for an intermediate level of integration, as shown in a simple but illustrative matrix. I would call it “full coordination of national policies”, a presently missing link between integration, as we have for monetary policy decision-making, and rule-based surveillance, such as is currently the case for national fiscal policies in Europe and which is clearly lacking teeth. 1  2  Speech by Mario Draghi, President of the ECB, at SZ Finance day 2015, Frankfurt am Main, 16 March 2015. BIS central bankers’ speeches  To be sure, the highest level of policy integration would logically involve building a genuine fiscal union, as well as completing the Single Market; but that would surely require more ex ante convergence and resolution of legacies from the past. My view is that we should leave the door open to further integration for countries that are willing and ready to consider it. Yet the most urgently needed part of EMU reform, is to set up a strong institution, led by a Euro area Finance Minister, to fully coordinate national fiscal and structural policies. In economic terms it would help internalize negative externalities (e.g. demand spillovers, or financial contagion) from asymmetric shocks across jurisdictions, as well as optimize positive externalities between fiscal and structural policies.

What the world will look like in 2050 will be partly shaped by the future of Europe; and the future of Europe depends on the decisions we take now. Of course, we always face the risk of failure when conducting far-reaching reforms. Yet we cannot afford another missed opportunity and we have to act swiftly without losing a longer term view. For the Euro area, for its citizens, 2016–2017 is the decisive time to act. 4  4  Interview of Robert Mundell by Laura Wallace, « Ahead of his time », Finance and Development, IMF, September 2006, vol 43, n° 3. BIS central bankers’ speeches  BIS central bankers’ speeches  5