samchain/econo-pairs-v1 huggingface dataset:
(c)  Increased public and investor confidence  Price stability in a country leads to investor and public confidence in the economy and results in increased foreign capital inflows. As alluded to earlier, a relatively stable exchange rate coupled with low inflation facilitates long-term planning for investors. (d)  Improved external competitiveness  In countries were there is low and stable inflation, exports become competitive and this has often led to the increase in export earnings, thereby improving the Balance of Payments (BoP) and ultimately contributing to accelerated economic growth. In this context, the benefits of a stable currency are clear as noted by Jeff Sachs in the UN’s recent report “A Practical Plan to Achieve the Millennium Development Goals” which states that: “The private sector needs a supportive macroeconomic framework. International and domestic macroeconomic stability minimizes uncertainty for businesses. Businesses cannot buy inputs or sell products internationally when the local currency is unstable against other currencies – or if the country is experiencing high inflation with constant readjustment of prices and loss of confidence” 1 . (e)  Sustained economic growth  Mr Chairman, when a country attains price stability, economic growth on sustained basis is likely to follow. Accelerated economic growth, of at least 8% per year, is a sure way of ensuring that most of the MDGs are attained in our developing countries. This has the positive impact of reducing poverty levels of the people as it increases their disposable incomes and eventually improve their standard of living.

In summary, the central bank, such as ours, has a key role in the attainment of the MDGs through the implementation of appropriate monetary and supervisory policies that ensure price and financial system stability. Macroeconomic analysis and modelling are key components in arriving at sound and effective macroeconomic policies which will contribute to poverty reduction through the acceleration of economic growth and facilitate the achievement of the MDGs. In a nutshell, Mr Chairman, one can simply state that low inflation coupled with a developed and stable financial system, will enhance higher economic growth. Sustained and higher growth will create more jobs and subsequently increase people’s income. An increase in people’s incomes will contribute to alleviation of poverty as it will improve their capacities to access the human basic needs such as food, shelter, education, and health. Further, with increased investment (and a growing economy) partly on account of price and financial system stability, Government revenue is more likely to rise, therefore enabling the Government to improve the provision of education and health services, the two which are among the key tenets of poverty reduction. Furthermore, increased Government revenue will allow more investment in infrastructure such roads needed to transport produce from various production centres to markets thereby enhancing the incomes, particularly those of rural communities. This would contribute to the achievement of MDGs.
In addition, the Payment System Act confers on Norges Bank the responsibility for licensing and supervision of systems for clearing and settlement of interbank money transfers. BIS central bankers’ speeches  5  transactions are crucial to financial stability. A robust financial system is not only dependent on solid banks. The infrastructure must also be able to withstand shocks. Large amounts are settled in the payment system every business day. If the system fails, payment flows can be interrupted, with serious consequences for banks, private individuals, the business sector and public administration. Pension and wage payments may be delayed, and businesses may not be paid for goods sold. Problems can spread from one bank to another if one of the banks cannot meet its payment obligations. Today, payments are largely made by cashless means using deposit money. This places even greater demands on the payment system to function as intended. Chart: Net settlements at Norges Bank Norges Bank’s system for net settlement of interbank payments is the core of the Norwegian payment system. There are 22 banks that participate directly in net settlements (first-tier banks), while 110 banks participate indirectly (second-tier banks), through a private settlement bank. The two most important private settlement banks in Norway are DNB and Sparebank 1 Midt-Norge. Second-tier banks, normally small banks, have risk exposure towards their settlement banks. The risk to the payment system as a whole increases when many banks use the same settlement bank.

François Villeroy de Galhau: Financial stability in the age of digital industry Introducing speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Paris Europlace International Financial Forum, New York City, 18 April 2016. *  *  *  Ladies and gentlemen, I would like to introduce this third round table by presenting the latest issue of the Banque de France Financial Stability Review entitled “Financial Stability in the Digital Era”. This new edition of the FSR addresses a very topical issue in the financial world, the impact of digitalisation and how to regulate such changes where necessary. I am keen to hear today’s exchange of views. In this FSR, we have gathered contributions from prominent academics, practitioners and policy-makers in order to shed light on the impact of innovation on financial stability. I would like to express my sincere thanks to all the contributors who have provided their views and analyses on such a technical and forward-looking topic. I cannot list all the contributors just now but I would like to give a special mention to Ms Karen Gifford who is with us today. The contributions presented in the FSR are very diverse in nature. The aim of the FSR is to help readers form an opinion; it is not designed to convey the explicit message of the Banque de France. The core aims of our Review are to exchange ideas, explore a given theme from various angles, and juxtapose different analyses and opinions.
Although most Member States have fallen behind in meeting the targets of the Lisbon Agenda, Malta must make even more pronounced efforts to achieve them, particularly in the areas of human resource development and innovation. The National Action Plan for Employment is a step in the right direction, but it can only produce the desired results if all social partners take ownership of it. With regard to macroeconomic stabilisation, the successful achievement of the Convergence Programme objectives would restore the use of fiscal policy as an instrument of economic management and lead to a better allocation of resources in the economy. It would also contribute to a smooth transition through ERM II and towards the adoption of the euro. As a small and highly open economy, Malta stands to benefit significantly from the introduction of the single currency, mainly through the elimination of exchange rate risk and uncertainty and lower interest rates and transaction costs. On the microeconomic level there are a number of issues which need to be tackled to improve the efficient allocation and use of resources and to raise productivity. Unlike macroeconomic policies, which tend to yield results only in the medium-term, efficiency improvements at the micro level are likely to produce more immediate benefits in terms of new economic activity and job creation. The truth is that sustained improvements in the country’s economic fundamentals cannot be attained without enhanced efficiency and productivity in both the public and private sectors. The achievement of such improvements requires efforts on a number of fronts.

The free flow of goods in import-competing sectors such as agriculture implies unrestricted access for Maltese products to EU markets, while allowing reciprocal access to imported products. This represents both an opportunity and a threat, however, so that it should be met with appropriate restructuring of the sector so as to enable it to face foreign competition. In this regard Malta can obtain considerable market and development assistance from the EU for the agricultural and fishing sector, including for processing activities. As an EU Member State, Malta can also benefit from programmes aimed at promoting industrial restructuring, particularly with regards to SMEs. The freedom of movement of capital which Malta is experiencing as a Member State of the EU has significant implications. For one, it signals to investors that Malta is a developed market economy with a well regulated financial system where financial resources can find profitable employment. This contributes to the development of the sector, including of its intermediation function of transforming savings into productive investment. It also encourages the inflow of capital from abroad. For these same reasons, however, international investors will maintain a close scrutiny of developments in the local economy, and move capital according to their evaluation of prospective risks and returns. Freedom of movement of capital thus implies the need for more vigilance by the Central Bank of Malta not only to protect the exchange rate but also to preserve financial stability.
The macroprudential buffers that are currently implemented in the SSM banking system are of a predominantly structural nature and are thus expected to be maintained over the cycle. [9] The countercyclical capital buffer (CCyB) is the only buffer that is intended to be released in case of a downturn. However, the CCyB has only been activated by seven of the 19 euro area countries and currently represents, in the aggregate, only 0.1% of risk-weighted assets [10] A lack of releasable buffers curbs the countercyclical role of macroprudential authorities. When breaching their combined buffer requirements, banks may uphold capital ratios by disposing assets to avoid the automatic restrictions on dividend distributions. If such behaviour becomes widespread in the event of systemic stress, it can result in a credit crunch, which would aggravate the downturn. This is exactly what we observed in previous crisis episodes, and what we should avoid in the future. Macroprudential space in the form of releasable buffers could serve as a potential macro-financial stabilisation in euro area countries. The release of the buffers in a downturn should help banks to sustain the flow of credit. To this end, releasable buffers would first need to be available. In sum, we are in a situation where the overall level of capital requirements is broadly adequate, but the composition may not be optimal. It is therefore important to have a discussion on the need to reallocate capital requirements towards releasable buffers in a capital-neutral manner.

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As such, “Policy dilemma” in Emerging Market Economies is likely to become more pronounced, especially as policy rate hikes from external front are imminent. Along the way, clear and timely policy communications from Advanced Economies will be useful to prepare for any adverse side-effects going forward. Part III: Key policy takeaway and the importance of policy collaborations Ladies and Gentlemen, In preparation for upcoming challenges, policymakers wish to do better than passively “catching up” with the crisis, but to be actively “ahead of the crisis” in order to prevent, or at least, mitigate the impact should one occur. Against this backdrop, lines of policy defenses for each economy have to be strengthened. 2  BIS central bankers’ speeches  If we think of the economy as our own house, then keeping the house in order is always an effective first line of defense. Strong economic fundamentals and macroeconomic policy credibility would play a crucial role in ensuring confidence and the sustainable economic activities. Nonetheless, increasing interconnectedness has made housekeeping more difficult as it creates spillovers. To better deal with the shocks, broader set of policy tools are called for. In a nutshell, sound macroeconomic policy and flexible macro-prudential measures to target vulnerabilities have been employed to minimize unprecedented impact in an appropriate and timely manner. Nonetheless, these policies are reaching their limits, not only in terms of policy space but also effectiveness. For a better solution, reforms in both the financial and real sectors are essential.

For example, Malaysia’s top halal export markets (e.g. China, Singapore and Japan) are signatories to the Net Zero target and non-sustainability practices will lead to an increase cost of business exporting into these markets. Malaysia’s halal food and beverages segment, which makes up 80% of Malaysia’s halal production and 86%5 of total halal exports may be adversely affected by climate change. An increase in temperature will lower the resilience of the agroecosystem against pests and pathogens, resulting in lower yields and quality of crops, affecting the supply of raw materials. In addition, more MNCs are embracing the sustainability agenda compelling halal SMEs to factor in sustainability as part of their business strategies, operations and decision making. It is heartening that prominent halal MNC manufacturers have already started imposing sustainable practices across their supply chain. Nestle for example, has established the Paddy Club back in 2012 as an initiative to ensure rice used for the company’s cereal products is sourced sustainably and responsibly. Another example is the Sustainability Agriculture Code as a pre-requisite for suppliers to enter Unilever’s supply chain as part of the group’s ambition to sustainable sourcing. Towards this end, the Islamic financial institutions have put together a lot of efforts and resources in place, underpinned by the concept of Value-based intermediation (VBI) such that financing and banking activities are in line with sustainability practices.
Excluding the purchase of non-regular transport machinery, this component of investment has improved in recent months. 9. In our baseline scenario, gross fixed capital formation should experience a slightly positive growth in 2017, after three consecutive years of contraction. A key factor in the negative figures of the last few years is the ending of the mining investment cycle, which reached its peak in 2012. More recently the deterioration of housing construction has added, as the boom triggered by tax incentives finished and a modification of loan-to-value norms reduced home sales. Going forward, our forecasts rely on an increase in non-mining and nonresidential investment (mainly machinery and equipment). While mining investment will eventually return to positive territory during 2018, the gradual adjustment in residential investment is expected to continue during the following quarters (Figure 5). Figure 5 Real annual contribution to GFCF (*) (percentage points)  16  16  12  12 Other  8  8 Non-mining  4 0  4 0  -4  -4  Housing  -8  -8  Mining  -12  -12  -16  -16 09  10  11  12  13  14  15  16  17  18  (*) For sectoral GFCF, variations of the 2008 Benchmark Compilation are used. Since total GFCF is expressed using the 2013 Benchmark Compilation, annual variation of other GFCF is adjusted for consistency purposes.

Estimations for 2015 and 2016 based on available information from listed companies (FECU), Capital Goods corporation surveys, Chilean Chamber of Construction and National Accounts by institutional sector. For 2017 and 2018, Central Bank projection models and sectoral sources are used, including investment plans and Capital Goods Corporation surveys. Source: Central Bank of Chile. 4  10. The labor market continues to gradually adjust and runs the risk of becoming a drag on consumption. Wage employment declined by 2% annually in the moving quarter ending February, and annual wage growth moderated. In addition, working hours declined due to demand rather than supply reasons. Yet this has not translated into an increase in open unemployment, due to flexibility in the Chilean labor market: the unemployment rate is still low from an historic perspective. In fact, despite being more precarious, self-employment has acted as a significant buffer to the loss of dynamism in wage employment (Figure 6).
Peter Praet: Interview in Börsen-Zeitung Interview with Mr Peter Praet, Member of the Executive Board of the European Central Bank, in Börsen-Zeitung, conducted by Mr Detlef Fechtner and Mr Mark Schrörs on 11 February 2019 and published on 18 February 2019. * * *  Mr Praet, how badly is the euro area economy doing? We have lately seen a marked increase in the risks for the euro area economy. That is why we revised our assessment at the last meeting of the ECB’s Governing Council in January. We see the constellation of risks surrounding the economic outlook, in other words the balance of risks, as tilted to the downside. That is a significant change in our communication and reflects concerns about the general economic situation. At the same time, however, we said that our baseline scenario has so far remained intact. In March we will have new macroeconomic projections from ECB staff and we will then re-examine our assessment. The December projections for 2019 to 2021 forecast growth of 1.7%, 1.7% and 1.5% and a gradual rise in inflation to 1.8% in 2021 – so approaching the ECB’s target rate of below, but close to, 2%. That surely can’t be upheld now, can it? I expect that the projections for the near term, in particular, will be revised downwards. The data since December have been much weaker than I had expected. But our discussion in the ECB’s Governing Council does not focus so much on the short-term perspective.

After the end of our net asset purchases, the primary instrument to steer our monetary policy stance is again our key interest rates. And as far as their path is concerned, we continue to expect them to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. This rotation of instruments from net purchases to the rate path has been implemented in such a way as to preserve our accommodative monetary policy stance. We have thus not tightened our monetary policy. Moreover, we have made it clear that, in any event, we stand ready to adjust all of our instruments, as appropriate, to ensure that inflation continues to move towards our inflation aim in a sustained manner. President Mario Draghi always stresses that the toolbox is full. But with interest rates at or even below zero and the asset purchase programme at its self-imposed limits, what else is really left? If there is a problem, there needs to be a careful assessment to establish the cause. A financial shock, for instance, is something different from a slowdown in growth for fundamental reasons. In the case of an economic slowdown, interest rates are generally the instrument of choice. If the euro area economy were to slow more sharply, we could adapt our forward guidance on interest rates and this could be complemented by other measures.
The system switches to a low-liquidity equilibrium. These liquidity droughts were perhaps the defining feature of the financial crisis during 2007 and 2008. In the model, the likelihood of such systemic liquidity crises depends critically on two key structural characteristics of the financial system – the two c’s: concentration and complexity. The greater the concentration within the financial system, the greater the potential for systemic collapse as larger banks spread a disproportionate amount of financial pain around a densely networked financial system. A greater degree of system complexity has a similar effect, creating more channels for contagion and heightening banks’ incentives to hoard liquidity when the weather worsens. The two c’s are very much features of today’s financial system. On the face of it, that bodes ill for future systemic crises. So what role might policy play in avoiding those crises? The model provides a test-bed to consider a range of policy options, including for haircuts policy. An illustrative policy experiment, based on a simulation of the model in which haircuts spike sharply, is shown in Chart 1. Up the vertical axis is a measure of the probability of a systemic liquidity crisis. Along the horizontal axis is the initial size of the haircut on secured financing transactions. The three lines trace three policy options. Consider first the “baseline” path without policy intervention. Provided haircuts remain high come rain or shine – in the example, above around 20% – the probability of a liquidity crisis remains very low.

Transparency enhances the effectiveness of monetary policy by helping to guide the expectations of economic agents and bring them into line with policy objectives and actions. For these reasons, the ECB has striven to be as transparent as possible, communicating clearly, and by a variety of means, its policy objective, its strategy, its assessment of the economic situation, and its view of the outlook for price stability and associated risks. There is no doubt, however, that communication is a challenging task. I can assure you that we at the ECB – in light of the mandate that was assigned to us by the Maastricht Treaty and the trust and credibility we have earned from more than 313 million citizens – take this challenge very seriously. *** Chairman, Governors, Professors, dear friends, I have on behalf of the Executive Board and Governing Council of the ECB to thank all of you for having accepted our invitation and for having contributed so actively to the discussions. The ECB considers important to permanently guard against complacency and to remain open to criticisms and suggestions, to take regularly stock of the advances of academic research. I thank you for your attention. 2  BIS Review 110/2006