samchain/econo-pairs-v1 huggingface dataset:
(5) Includes Australia, Canada, New Zealand and South Africa. (6) WEO's April 2016 weights. Sources: Central Bank of Chile, Bloomberg and Emerging Portfolio Fund Research. Table 2 International baseline scenario assumptions 2014  2015 (e) Mar'16 Report  Jun'16 Report  2016 (f) Mar'16 Report  Jun'16 Report  2017 (f) Mar'16 Report  Jun'16 Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates Developed ec's GDP at PPP Emerging ec's GDP at PPP United States China Eurozone Latin America (excl. Chile) External prices (in $  -1.8 3.4 3.4 2.7 1.7 4.8 2.4 7.3 0.9 1.1 -0.9  -4.5 2.9 3.1 2.4 1.9 4.0 2.4 6.9 1.5 -0.7 -9.7  -4.5 3.0 3.1 2.4 1.9 4.1 2.4 6.9 1.6 -0.5 -9.8  -4.2 2.9 3.1 2.4 1.8 4.0 2.3 6.4 1.5 -0.9 -5.8  -3.9 2.8 3.0 2.3 1.7 4.1 1.9 6.5 1.5 -1.0 -3.8  0.7 3.1 3.3 2.7 1.9 4.5 2.4 6.1 1.6 1.3 1.0  0.1 3.2 3.4 2.7 1.9 4.6 2.3 6.2 1.6 1.5 0.6  LME copper price BML $ cents/lb) WTI oil price $ Brent oil price $ Gasoline parity price $ Libor $ (nominal, 90 days)  311 93 99 731 0.2  249 49 52 467 0.3  249 49 52 467 0.3  220 40 41 398 0.7  215 45 45 401 0.9  230 45 46 420 1.5  225 51 52 420 1.6  (e) Estimate. (f) Forecast. Source: Central Bank of Chile.

The third term represents the desire for gradual interest rate changes in criterion 3, i.e. that the current interest rate it should not deviate too far from the rate in the previous period it-1. The fourth term represents criterion 4 and can be interpreted to mean that there is also a cost or risk in setting an interest rate it that deviates substantially from the interest rate implied by simple monetary policy rules itsimple. By giving some weight to the consideration that the key rate  BIS Review 113/2010  3  should not deviate too far from simple rules, monetary policy may become somewhat more robust. 1 Key policy rate  A monetary policy that only takes into account the consideration of bringing inflation rapidly back to target (criterion 1) would imply that the interest rate should rapidly have been reduced to below 1 per cent when we presented the latest Monetary Policy Report. In that case, the interest rate would have had to be raised rapidly again to prevent activity and inflation from becoming too high further ahead. Such a strategy could be consistent with the desire to safeguard against inflation expectations becoming entrenched below the inflation target, but could on the other hand have a substantial impact on output and employment. Developments become more stable if weight is also given to stabilising output (criteria 1 and 2). This would also imply an interest rate reduction first and then an interest rate increase further ahead.
Step 2: Setting up the “Financial Sector Consolidation Unit” at the Central Bank The “Financial Sector Consolidation Unit” of the Central Bank, in general referred to as the “Consolidation Unit” was formed to design a strategy to catalyze the consolidation process and to spearhead the structural changes necessary for strengthening the financial sector. The Consolidation Unit is headed by the Assistant Governor of the Central Bank in charge of financial system stability with high-ranking officers of Bank and Non-Bank Supervision Departments appointed as members. A Technical Assistance Team representing expertise in the areas of accounting, auditing, banking, legal and regulation was also appointed to assist the Unit. The Consolidation Unit is responsible for drawing up the Road Map to facilitate the envisaged outcome, providing guidance to the banking and NBFI sectors to ensure that its implementation will be smooth, effective and generate synergies to the financial system. The Unit is expected to liaise with all other stakeholders, such as Ministry of Finance, Inland Revenue Department, Securities and Exchange Commission, Colombo Stock Exchange, Registrar of Companies and Panel of Auditors, to facilitate the expeditious implementation of the consolidation process. Further, the Unit is also required to submit papers to the Monetary Board to obtain necessary approvals for the consolidation model of each Bank and NBFI on a case by case basis and to apprise the Monetary Board on the progress of the consolidation programme on a periodic basis.

Banks in Sri Lanka have been in operation for over 160 years while the NBFI sector has been a part of the economy for the last 80 years. Before the economic liberalisation in 1977, NBFIs carried out hire purchase and leasing business using their own funds or personally borrowed funds. Since the owners of such companies prudently managed their businesses and were cautious in lending, NBFI failures during pre-1977 era were extremely limited. The new economic policies in the post-liberalisation period gave rise to higher demand for credit from the private sector, which led the NBFIs to raise public deposits. However, lack of controls and regulations during that period limited the ability of the Authorities to move directly into the affairs of NBFIs. With the commencement of operations of the Central Bank of Sri Lanka in 1950, the Bank Supervision Department was set up, and has since been entrusted with the responsibility of supervision and examination of banking institutions. The scope of functions of the Bank Supervision Department was extended with the enactment of the Control of Finance Companies Act, No.27 of 1979, to include the supervision of NBFIs. The Bank Supervision Department was entrusted with the responsibility of providing the public with the required confidence in the financial system and protecting the interests of depositors. In order to achieve this objective, the Department was charged with the duty of continuous supervision and periodic examination of all banks and NBFIs in Sri Lanka.
The normal monetary policy reaction to a sustained period of above target inflation would be to tighten policy, to create demand conditions which are more conducive to restraining price increases and bringing inflation back to target. But so far, the Committee has not supported that course of action – and is keeping monetary policy extremely loose. Bank Rate remains at the exceptionally low level of 0.5%, the lowest official interest rate recorded since the Bank of England was established over 300 years ago. And the Committee is also currently maintaining the boost to demand from the injection of £ of new money into the economy through Quantitative Easing. 1  Data refers to Berkshire, Buckinghamshire and Oxfordshire, which is the relevant NUTS (Nomenclature of Units for Territorial Statistics) region for EU comparisons. There are 271 NUTS regions in the EU, and the latest data relates to 2007. See Eurostat (2010) for more details. 2  See Lee (2010). BIS Review 99/2010  1  Last month, however, I dissented from this approach and voted for a small rise in interest rates. And in today’s speech I want to set out the thinking behind my view of current economic prospects and the implications for UK monetary policy that led me to that decision. The monetary policy response to the global financial crisis The current stance of monetary policy in place in the UK, and in many other countries, was put in place as the response to the recession triggered by the global financial crisis.

Recovery in the world economy Over the past year or so, the world economy has bounced back strongly, led by growth in Asia but also supported by recovery in the US and a more gradual turnaround in the European economy. Consensus forecasts for 2010 growth in the three main regions of the world economy have improved significantly over the last twelve months, as Chart 1 shows. The US economy is now projected to grow by over 3% this year, and GDP in Japan is also projected to rise at a similar rate – very strong by comparison with its recent poor growth performance. True, the European economies appear to be lagging behind in this global recovery. But even is this region of the world economy, the growth outlook has improved  2  BIS Review 99/2010  compared with last summer when average growth in the European economies in 2010 was projected to be barely above zero. Chart 1: Improving growth outlook for 2010 Percentage increase in GDP projected by Consensus Forecasts 7 Asia Pacific European Union  6  US  5 4 3 2 1 0 Jun-09  Sep-09  Dec-09  Mar-10  Jun-10  Source: Consensus Economics  Last week, the IMF updated its growth forecasts and these showed a further uprating of their expectations for growth this year across the world economy, though they also highlighted some of the risks looking ahead. The latest IMF projections are now for world growth of 4.6% in 2010 and 4.3% in 2011.
The period during which inflation undershot the target thereby became gradually more prolonged. In mid-2014, inflation had been continuously below target since 2010, and periodically quite far below (see Figure 1). Once inflation had undershot the target for a while, inflation expectations also began to fall, including long-term expectations. Thus, economic agents did not expect inflation to meet the target even five years ahead (see Figure 2). In wage formation as well, there were signs that the inflation target was beginning to be of less significance. In other words, a risk began to build up that the role of the inflation target as benchmark for price-setting and wage formation would begin to weaken – that the nominal anchor that has been an important part of the favourable developments in Sweden since the early-1990s crisis would begin to slip. As the basic premise of inflation targeting policy is to anchor long-term inflation expectations at the target, this development made it urgent to bring inflation back up towards 2 per cent fairly rapidly. It was therefore clear that the Riksbank needed to focus entirely on the task of maintaining confidence in the inflation target. Consequently, there was no longer any scope for conducting a policy that “leans against the wind”. As a result, the Riksbank cut the policy rate quite rapidly down to –0.50 per cent and also began to purchase substantial volumes of government bonds, particularly in relation to the size of the sovereign debt.

It is unlikely that the regime would have been adopted without these developments and so as and when the MPC starts to “normalise” the level of Bank Rate, the Bank is likely to review whether to retain the current “floor” system indefinitely or whether it should move to a different medium-term operating framework. One obvious option would be to return to the framework used before the introduction of QE – which was known as “reserves averaging”. That operating regime was introduced after a careful review of alternative regimes open to the Bank in the mid-2000s. But the world has changed markedly since that review was undertaken. Banks have structurally higher demand for central bank reserves than they did before the crisis, reflecting in part liquidity regulations, and as I noted earlier, a far wider range of institutions can directly access our balance sheet than was the case a decade ago. Moreover, the structure of money markets has evolved considerably over this period as banks have responded to lessons learned during the crisis and the impact of post-crisis regulation. These changes have been sufficiently profound that the Bank no longer maintains a presumption that it will return to a version of reserves averaging that existed prior to 2009. 2  See 3.1-3.4 of the September 2014 MMLG Minutes http://www.bankofengland.co.uk/markets/Documents/money/mmlgsep14.pdf.
The yield and forward curves observed in the market are the probability-weighted averages of these possible paths, aggregated across market participants. A perceived binding lower bound on monetary policy rates skews the predictive distribution upward, since it truncates the distribution of conceivable future short-term rates from below: as the overnight interest rate reaches the lower bound, interest rate paths that would have embodied expectations of a further cut at a higher level of the actual overnight rate are, by definition, eliminated from the set of conceivable outcomes; conversely, rates above the lower bound receive a higher relative weight and the expected value of interest rates is mechanically pushed up.3 While longer-term yields are likely to decline even as the central bank cuts the short-term rate towards its lower bound, the truncated asymmetric distribution of expected future short-term rates means that they decline by less than they would away from the lower bound. The resultant tightening bias, in turn, can be quite costly, since it tends to arise in situations of strong and persistent disinflationary pressures and in the wake of a previous sequence of sizeable rate cuts. A policy of negative interest rates mitigates this tightening bias. In particular, the observation that a central bank is prepared to take interest rates to levels below zero induces a re-evaluation of technical feasibility constraints. A salient feature of this re-evaluation is the disappearance of the qualifier “zero” in the economic debate on lower bound constraints.

However, the lek loan price has not fully reflected our monetary policy, indicating the presence of high risk premia and containing the monetary stimulus transmission to the economy. These risk premia are also reflected in other lending terms, unrelated to the loan price, and appear tighter as compared to their historical performance. *** Under the Bank of Albania's baseline scenario, the economy will improve slightly during the current year. Increase in exports and a better performance of consumption and investments will continue to support the aggregate demand. The monetary policy will support the domestic demand, by maintaining macroeconomic stability and ongoing injection of monetary stimulus in the economy. Also, payment of arrears will help improve the balance sheets of firms and the private sector, and is expected to improve business borrowing. Excluding the payment of arrears, the 2014 budget has projected a fiscal adjustment needed against the backdrop of a rapidly increased public debt. Reflecting the weak economic and monetary dynamics in the country, inflationary pressures are expected to be weak. After four quarters, inflation is expected to vary 0.7%–3.8%, with a 90% probability of occurrence. This will require maintaining a stimulating monetary policy even in the medium term. *** At the end of discussions, the Supervisory Council decided to keep the key interest rate unchanged, at 3.0%. Given the expected inflation developments, the Supervisory Council deems that the monetary policy will remain stimulating in the medium term.
A second group would be those supervisory agencies, central banks, multilateral financial institutions, and other public authorities around the world who shared with us the perspectives and needs of banking systems that are based in many different markets, economies, and legal systems. Thanks to discussions with these colleagues, such as through joint working groups like the Core Principles Liaison Group and through regional consultations and meetings, the Committee was better able to ensure that the new framework would be relevant to many different kinds of banks and economies that are in various stages of growth and development. The cooperation of so many public authorities worldwide has helped to make Basel II a truly global product. The Committee will continue to seek opportunities to deepen its relationships, and its opportunities for discussion, with other supervisors and central banks in the months and years ahead. Of course, this work would have been impossible without the sponsorship of the Bank for International Settlements. I would like to offer my sincere thanks to Malcolm Knight, the General Manager of the BIS, for his institution’s support of our work on Basel II. The BIS has been a staunch ally and advocate for our work over the entire thirty-year history of the Committee. With regard to Basel II itself, the BIS is fostering a greater understanding of the new framework among central bankers and supervisors  BIS Review 38/2004  1  worldwide through programs organised by its Financial Stability Institute, the “FSI”.

I intentionally spoke of “a” gold standard and not of “the” gold standard because this standard has taken various different forms over history. Under a pure gold standard, a Swiss franc is equivalent to a certain amount of gold, and therefore, vice versa, the gold price is fixed in terms of Swiss francs. The SNB would be obliged to purchase or sell gold at this price, without any restriction. In other words, there would be an obligation to redeem SNB banknotes in gold. In my view, the are two main arguments against a return to the gold standard. The first argument relates to gold as an anchor of price stability. Our modern economy is diverse and complex. Why, then, should we confine it in a monetary corset that takes as its measure the scarcity of a precious metal that, for the overall system, is relatively unimportant? Price stability is not guaranteed by the gold standard. As we have most clearly seen in the past few years, there is no direct connection between the gold price and the general price level of goods and services. The second argument is that the gold standard reduces the room for manoeuvre in monetary policy. The closer it comes to its pure form, the greater the reduction in the freedom of manoeuvre. Only those who believe that no monetary policy at all is required to react to economic shocks should plead the case of the gold standard.
Dimitar Radev: Bulgaria on the road to the euro Speech by Mr Dimitar Radev, Governor of the Bulgarian National Bank, at the conference "Bulgaria on the road to the euro", Sofia, 24 February 2023. *** Dear Mr. President, Dear Mr. Prime Minister, Dear Mr. Dombrovskis, Dear Ministers, Dear members of the public, Dear guests, First of all, I would like to thank the Ministry of Finance and Minister Rositsa Velkova for organising this conference. A proper assessment of the current situation related to our path to the euro area will enable us to make the right decisions. For this reason, I will touch on three issues: 1. Assessment of the current situation; 2. Possible solutions; 3. The role of the Bulgarian National Bank (BNB). At this point of time we are rightly talking about inflation, which is one of the nominal criteria for accession, the only one we are currently not fulfilling. Process-wise, legislation is not an insurmountable obstacle. The genesis of the overall delay in the process, however, lies in the political framework and more specifically in the political crisis of the last two years. The ongoing problems with the legislative program and with the domestic factors for high inflation are largely a consequence of the political crisis. As a result of this crisis, the budget process in the country is seriously disrupted. For the past two years, we have not had a clearly defined law on the annual state budget or a realistic macroeconomic framework and medium-term fiscal program.

Our banking sector has reached its historically highest profitability levels. The ratios of capital adequacy and liquidity are above the average for the EU. Consequently, I would propose two brief topics to ponder on:  2/4  BIS - Central bankers' speeches  Just think of it, where would Bulgaria have been if the other economic, and not only economic, sectors had similar results? Also, remember where the BNB and the banking sector were not very long ago, in 2014 and 2015. The turbulences that we went through in those years spread well beyond the boundaries of the banking sector. How did this transformation happen, from the state in which this sector was in 2015 to the state in which it is today. The answer is – extensive and determined reforms leading up to full integration into the nucleus of the EU, what essentially the euro area is. I think this is a completely valid response to the challenges facing the country today. Let me finish on a more prosaic note. What is the BNB doing on this matter now? As you are probably well aware, no formal criteria and requirements apply to the BNB. And how so? Because the BNB and the banking sector have succeeded in fulfilling all these criteria and requirements by 2020. It is precisely the compliance with these formal criteria and requirements that allowed Bulgaria to join the European banking union in 2020, one of the key euro area institutions, and the Exchange Rate Mechanism.
In addition, the Government owns substantial assets that it could sell in order to speed up the reduction of gross debt, including its stake in the banks.6 How Iceland would stand vis-à-vis the other Maastricht criteria, such as those pertaining to inflation, interest rate differential, and ERM II membership (for two years prior to accession) is also largely in the hands of the authorities. Through fiscal restraint, they could also contribute to the convergence of long-term interest rates. The social partners could promote low inflation by exercising restraint in wage settlements. Finally, the shorter end of the interest rate spectrum is determined by the market’s self-fulfilling expectations concerning membership itself and by the decisions of the Central Bank. Although a number of arguments indicate that currency union membership would suit Iceland well, it is not certain that a majority of the electorate will vote in favour of European Union membership in a national referendum. The fact that a number of EU member countries are in  5  Intervention would normally be sterilised in order to prevent undesirable effects on money supply. Hence the impact on the exchange rate is unlikely to be large or lasting. 6  According to current targets, the authorities aim to reduce gross public sector debt to 70% of GDP by 2015. 4  BIS central bankers’ speeches  financial distress, not least those permitted to join the EMU through rather liberal interpretation of the Maastricht criteria, does not increase the likelihood that the referendum would pass.

Not only is exchange rate volatility greater, but the adjustment of the exchange rate returns less than no benefit in the form of a more stable real economy.4  All four of these explanations probably have some validity, but there is good reason to examine the fourth of these more closely. Why is exchange rate adjustment not a shock absorber in small countries, as in the textbook example, but rather a source of shock? There could be a number of explanations for this. 1. The tendency of exchange rates to fluctuate in excess of what appears to be warranted by fundamentals could be a contributing factor. In a sense, the exchange rate of a currency is an asset price and, as such, is determined by expectations visà-vis an uncertain future. Expectations can swing from euphoria concerning the expected future stream of foreign currency revenue from investment that will support a currency to despair and, in extreme cases, serious lack of confidence over a protracted period. Exchange rate movements have a more profound effect on the economy than do other asset prices, however. In addition to storing value, a currency is a unit of account and a medium of exchange. Fluctuations in currency exchange rates induces volatility of relative prices throughout the economy, particularly in small, dollarised economies, and elevate the risk of doing business. 3  Increased aluminium production has also reduced the impact of commodity market volatility on the domestic employment level.