samchain/econo-pairs-v1 huggingface dataset:
Road Map: Monetary and Financial Sector Policies for 2017 and Beyond  Delivered by Dr. Indrajit Coomaraswamy Governor Central Bank of Sri Lanka 3 January 2017  1. Introduction Your Excellencies, Members of the  So, let me warmly welcome you to the  Monetary Board, Deputy Governors and  presentation of this year’s Road Map. Officials of the Central Bank, Distinguished Invitees, Ladies and Gentlemen,  Ladies and Gentlemen, as you aware, the core objectives of the Central Bank are the attainment of economic and price  The presentation of the Road Map is a  stability and the maintenance of  very important tradition that was  financial system stability with a view to  initiated by the Central Bank in 2007 and  encouraging and promoting the  this is the 10th statement in that tradition  development of productive resources of  that we are presenting today. It is our  Sri Lanka. We attach the highest priority  belief that sharing our policy direction  to delivering collectively on the  would make our policies for the medium-  mandates given to us. The considerable  term more predictable and transparent,  resources of the Central Bank of Sri  and would help you in shaping your own  Lanka are focused on achieving these  plans and operational modalities in the  objectives on a sustained basis and on  future. It will also ensure greater clarity  performing the important agency and  regarding our policies and actions.

The low inflation in recent years has of course also made its mark on our internal work and we have invested considerable resources in trying to understand which factors lie behind it – both from a short-term perspective and in a more structural perspective. So, to conclude by returning to the question of whether everything will go back to the way it was before the financial crisis, I think the answer depends on what one is talking about. When it comes to analysis and working methods, the answer is very clear: they need to be adapted to new experiences and changed conditions to remain relevant. This type of change can be difficult to see for outsiders, but I can assure you the changes are taking place. With regard to major changes in the actual inflation-targeting policy, the answer is not so clear-cut. This remains an open question that spans legislation, research and all those working with monetary policy. References Ball, Laurence M. (2014), The Case for a Long-Run Inflation Target of Four Percent. IMF Working Paper WP/14/92. Bernanke, Ben S. (2015), Why are interest rates so low, part 2: Secular stagnation. Ben Bernanke’s blog, Brookings, 31 March. Billi, Roberto and Vredin, Anders (2014), Monetary policy and financial stability – a simple story. Sveriges Riksbank Economic Review, 2014:2, Sveriges Riksbank. Blanchard, Olivier (2015), Contours of Macroeconomic Policy in the Future. Blog post on iMFdirect 2 April 2015, http://blog-imfdirect.imf.org/. Blanchard, Olivier, Dell’Ariccia, Giovanni and Mauro, Paolo (2010), Rethinking Macro Policy. IMF Staff Position Note SPN/10/03, International Monetary Fund.
For me questions include: is there any evidence that the tight labour market is easing; what is the revised outlook for demand in view of the Government’s fiscal announcements; are domestically generated inflation pressures consistent with returning inflation to the 2 per cent target; and what do financial market developments tell us. The MPC was clear in its language in September that should the outlook suggest more persistent inflationary pressures, including from stronger demand, the Committee would respond forcefully as necessary. In the context of the developments I’ve set out for you, today I think the central question for all nine of us on the MPC is how forceful do we need to be, to ensure inflation does return sustainably to the 2% target in the medium term. These are very challenging times for the UK economy and millions of households and businesses are experiencing real hardship as a result of the cost of living crisis. On the MPC we are acutely conscious that for many our monetary policy actions are adding to the difficulties caused by the current situation. We know from past periods in our history the damage to households and businesses that would result if high inflation persisted. Unlike earlier inflationary episodes, where we saw more persistence in inflation caused by ineffective policy and policy frameworks, this time we have a monetary policy framework which empowers us to take action.

UK-specific factors also have had a particular effect on the price of long-dated UK government debt, which fell very sharply over a very short period, leading to dysfunction which, had it continued or worsened, would have been a material risk to UK financial stability. The Bank started intervening in this segment of the gilt market on 28 September, in a timelimited and temporary way. Because this is not a monetary policy operation – although it involves buying assets I think of it as an operation designed to buy time - I won’t say any more about it here[5]. Markets continue to be volatile and so extracting any signals from the noise is even more challenging than usual. One key consideration for the MPC at its upcoming meetings will be whether the recent repricing of UK assets reflects a changed assessment by markets of the UK macroeconomic policy mix between fiscal and monetary policy[6]. The extent to which that can be determined will depend on whether markets settle at a new level, which itself will depend in part on getting a clearer picture on fiscal policy and the fiscal outlook. Prospects for inflation What does all this add up to in terms of the overall impact on the economy and on inflation. An obvious starting point might be to look at the evolution of our forecasts over the last year in response to the four shocks I’ve highlighted and other developments.
14.10.2020  Risks and vulnerabilities in the corporate sector as a result of the COVID-19 crisis: the experience of Spain 5th annual EU and US Perspectives: How to Spend it/ SUERF (The European Money and Finance Forum) Pablo Hernández de Cos Governor  Ladies and gentlemen, I wish you a good morning or good afternoon, depending on your time zone. First of all, let me thank the organisers for their kind invitation to participate in this conference. My presentation will focus on the impact of the COVID-19 crisis on the risks and vulnerabilities of non-financial corporate sector, the role played by policies in tackling these risks and the main challenges ahead. I will illustrate these vulnerabilities and challenges focusing on the Spanish case. This discussion is very relevant since the activity of the corporate sector has been particularly hit by the crisis and indeed many of the policy measures applied have focused on supporting the viability of firms which, despite being solvent, have seen their liquidity position deteriorate as a consequence of the crisis. The swift implementation of these policies is being and will continue to be crucial to prevent the temporary shock of the pandemic turning into the closure of many firms and therefore into a permanent loss of productive capacity. However, these policies have not been able to avoid an increase in the indebtedness of many firms since the beginning of the crisis.

Access to bank lending is more difficult for the financing of these activities because capital charges are generally higher and because often these assets cannot be easily pledged as collateral.9 Insofar as these activities evidence, as the empirical evidence suggests, higher average productivity, the development of equity markets can make a positive contribution to economic growth.10 Finally, the development of equity markets, together with the reduction in the home country bias in investors’ portfolios as a result of progress in the integration of financial markets, would improve the private risk-sharing mechanism in the euro area. The evidence for the 8  See, for example, Kraus, A.; Litzenberger, R.H. (1973): "A State-Preference Model of Optimal Financial Leverage, “Journal of Finance. 28: 911–922. 9 See, for example, Brown, J. R., Martinsson, G. and B. C. Petersen (2012): “Do financing constraints matter for R&D?” European Economic Review, No. 56, pp. 1512-1529. 10 See, for example, Brown, J. R., Fazzari, S.M. and B. C. Petersen (2009): “Financing Innovation and Growth: Cash Flow, External Equity, and the 1990s R&D Boom,” The Journal of Finance, Vol. LXIV, No. 1., 15  United States, where equity markets are more developed and investors’ portfolios are more diversified across states, shows that a significant portion of idiosyncratic shocks that affect a particular state are hedged through the holdings of diversified stock portfolios.
Moreover, resource utilisation is low to begin with, and is expected to remain low in the coming period. This justifies the expansionary monetary policy we are now conducting to attain the inflation target and to stabilise resource utilisation. References Apel, M., Friberg, R. and Hallsten, K. (2004): “Price-setting behaviour in Swedish firms”, Economic Review no. 4, 2004, Sveriges Riksbank. Adolfson, M. (2004), “Exchange Rate Pass-Through – Theory, Concepts, Beliefs and Some Evidence”, unpublished paper, Sveriges Riksbank. Bachetta, P. and van Wincoop, E. (2003), “Why Do Consumer Prices React Less than Import Prices to Exchange Rates?” Journal of the European Economic Association 1, 662–670. Burnstein, A., Eichenbaum, M. and Rebelo, S. (2002), “Why Are Rates of Inflation So Low after Large Devaluations?” NBER Working Paper 8748. Cheung, Y-W, Chinn, M.D. and Pascual, A. G., “Empirical Exchange Rate Models Of The Nineties: Are Any Fit To Survive?” Journal of International Money and Finance, 2005, 1150–1175. Cumby, R.E. (1996): “Forecasting Exchange Rates and Relative Prices with the Hamburger Standard: Is What You Want What You Get With McParity?” NBER working paper 5675. Froot, K. and Rogoff, K. (1995), “Perspectives on PPP and Long-run Real Exchange Rates”, G. M. Grossman and K. Rogoff (red. ): Handbook of International Economics 3. Froot, K.A. and Thaler, R (1990): “Anomalies: Foreign exchange”, Journal of Economic Perspectives 4: 179–92. Goldberg, P.K. and Knetter, M.M. (1997), “Goods Prices and Exchange Rates: What Have We Learned?” Journal of Economic Literature XXXV, 1243–1272. Hansson, J. and Johansson, J.

2/3  BIS central bankers' speeches  The second phase of this reform should aim at improving the education and know-how of the labour force, creating a legal, political, administrative and fiscal environment that attracts foreign developments and encourages domestic ones, and increasing the integration of Albania’s economy with the regional and European development infrastructure. Third, the opening of accession negotiations with the EU should be viewed as a primary instrument for the advancement of Albania’s development. The Bank of Albania judges that the fulfilment of the criteria for opening accession negotiations and the rigorous implementation of reforms that this process imposes should be the focus of the entire political spectrum in Albania. Thank you for your attention! 3/3  BIS central bankers' speeches
And for those of you who are newcomers, I hope my talk today will give you reasons why you should invest in Thailand. My talk today will be divided into three parts. In the first, I will touch on how the Bank of Thailand sees the Thai economy evolving at the moment as well as in the longer term. In the second, I will talk about the role of capital market in the economy’s long-term growth. The final part will then highlight the Bank of Thailand’s roles to promote capital market development. Let me start with the current picture of the Thai economy. As you all know, our real GDP growth moderated from 6.1% in the first quarter to 5.3% in the second quarter of this year. Thailand however was not alone in this development, as most countries in the region, with the notable exception of Indonesia, all experienced growth slowdown at varying degrees. In fact, when compared to Hong Kong, Singapore, and Taiwan which saw their growth rates cut down sharply from 7.3% to 4.2%, 6.9% to 2.1%, and 6.3% to 4.3%, respectively, Thailand fared much better with respect to the magnitude of the slowdown. The fact that we managed to hold on a satisfactory growth performance given the surrounding circumstances is a testament to the resiliency and the underlying strength of the Thai economy. Two major negative developments were behind the slowdown in the second quarter. On the external front, crude oil prices surpassed the 120USD mark for the first time in history.

Consequently, the need and the potential for mitigating the accumulation of systemic risk through regulation raises a number of questions with regard to the specific design of such regulation. Where do we start? How do we set priorities? Which principles should we abide by? The number of regulatory solutions that have been proposed are as numerous as the possible triggers of systemic crises. Often, individual solutions focus on one specific cause. In my opinion, there are so many possible causes of a systemic crisis that it is insufficient to focus on just one specific cause when drawing up possible regulatory solutions. It would be an illusion to think that the issue of systemic risk could be totally eliminated in the long-term with such an approach. Consequently, I believe it is important that the problem be approached in a systematic manner, and that comprehensible criteria for a list of measures that is likely to be effective be drawn up. Unless a roadmap is drawn up based on principles which guide us in the handling of the challenges we encounter in regulating systemic risk, there is a danger that decisions on the requisite measures will be made arbitrarily, that solutions lacking substance will be implemented or that nothing at all will be done. From the viewpoint of systemic stability, the result would be suboptimal. I will now talk about the criteria for assessing regulatory measures. Do the measures ensure market discipline?
Doing so will require an understanding of the network of connections between firms, which at present is lacking. Lesson 4: Banks cannot “pass” a stress test Over the past six months, stress-tests have moved from the back-offices of risk managers to the front offices of the world’s media. Assessments of the balance sheet consequences of tail macroeconomic risks are now in the bloodstream of financial policymakers. They also appear, belatedly, to be entering the bloodstream of financial firms. That is real progress. But as with all technical progress, there is some danger of an overshoot. While the inputs to, and outputs from, stress-testing are statistical, the inferences reached from them are necessarily subjective. Stress-tests are probabilistic and state-dependent judgements. Two of the key judgements are, first, what prescribed stress scenarios are appropriate inputs; and second, what thresholds for satisfying these stress-tests are set. Both are fiendishly difficult. On the first, a stress scenario is just one point in a probability distribution. Which point to choose – indeed, which distribution to choose – is a matter of judgement. Consider the two distributions for UK GDP growth shown in Chart 6, one taken from the ten years to 2007, the other across a longer 150-year sample. 2 The standard deviations of these two distributions differ by a factor of 4.5. For a financial firm that is 30-times leveraged, that can easily be the  2  See Haldane (2009a), “Why Banks Failed the Stress Test”.

As in the rest of the world, the upturn in Sweden in the period ahead will partly be driven by temporary factors such as highly expansionary fiscal and monetary policies and an inventory cycle. The forecast assumes that the world market will grow strongly, that private consumption will increase at a good rate despite the fact that the development of household incomes will be weak, that public consumption will increase and that investments will increase despite a low level of capacity utilisation and weak profitability. Naturally, there also exists the possibility that GDP growth will be stronger than we have estimated. However, even with a higher rate of GDP growth, resource utilisation will be low – and it is resource utilisation that is significant for inflation, not GDP growth. Resource utilisation can be measured in different ways, but I will not address this issue today. I will restrict myself to stating that resource utilisation can be measured by the GDP gap – that is to say, the difference between the GDP level and what can be considered a normal level. Even with a higher rate of GDP growth, the GDP gap will be negative and resource utilisation low for an extended period (Figure 17). The low resource utilisation does not only signify that inflationary pressures are low, but is also a reason in itself to conduct a looser monetary policy.
And the fall-off in the tourist market is a similar development. Although there are specific factors that might explain some aspects of this behaviour, the strength of growing import penetration in the domestic market tends to confirm the diagnosis of diminished competitiveness of Spanish products on domestic and foreign markets alike. The concurrence of the incipient slide in export shares and the ongoing increase in import penetration primarily reflects the higher relative prices of Spanish products as a result of persistent inflation differentials and of the more recent appreciation of the euro. Testifying to this is the negative trend of the traditional price competitiveness indicators, even when these are calculated with export deflators that capture how the sector more exposed to foreign trade has narrowed margins to face growing competitive pressure. Behind the ongoing deterioration in price competitiveness lie a relative increase in unit labour costs, reflecting continuing higher wage increases in Spain despite the moderation compared with previous periods, and very low labour productivity gains. The existence of wage-setting and indexing mechanisms that set a higher floor for nominal wage growth than in other countries hinders the rapid absorption of external price shocks. And it also tends to hamper full convergence with the arrangements required in an area of macroeconomic stability. The problems posed by wage inertia are exacerbated by the lacklustre behaviour of productivity.

I have tried to give you a flavour of the synergies that I believe exist in debt workouts affecting, first, companies, then financial institutions and finally sovereign countries. But I hope I have also not underestimated the difficulties in realising those synergies, especially as the number and type of players involved in workouts has increased. Significant progress towards a global approach to corporate workouts has been made, however, thanks to the efforts of many of you. I am convinced that this has laid the foundations for further moves towards more effective frameworks governing bank and, especially, sovereign debt workouts. Thank you. BIS Review 67/2001  7
The second constraint is that smaller economies, both emerging and developed ones, are quite often in the position not only of monetary-policy takers, but also of regulatory-takers. So, they have to face the consequences of regulatory debates and decisions made by “big guys” somewhere else – debates and decisions they can influence only to some extent, if at all. And the emphasis in the world debate is now being put more on regulation on the micro level and less on these big questions I am discussing, despite the hard work of Michael Woodford and others here. I understand that micro-regulation is easier to create and to explain to the public, and sometimes also easier to implement. But it can also have faster adverse impacts. An example from Europe – the harmonisation of deposit guarantee schemes (DGS) within the BIS central bankers’ speeches  1  EU. It is generally a brilliant idea to have single DGS rules in the single market, but in the Czech Republic it has led to the abolition of the previous well-established practice of copayment when a depositor received an insured deposit from a failed financial institution. Our practice was 10% co-payment, so that depositors never got back 100% of their insured deposits. The harmonised DGS rules established a different unified practice – deposits are insured up to 100% of the equivalent of 100,000 euros. This, of course, means a bigger incentive for moral hazard behaviour on the part of depositors.

Gent Sejko: Region's financial and monetary stability, ten years since the crisis outbreak Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the regional summit on "Region's Financial and Monetary Stability, Ten Years since the Crisis Outbreak", Governor's Panel "Monetary policy and the stability of the banking systems in the countries of the region – a decade after the Lehman Brothers' bankruptcy", Bečići, Montenegro, 18 June 2018. * * *  Dear Guests, Fellow Colleagues, It is a pleasure to be amongst you today and to be able to share opinions on some of the most pressing challenges we are facing at the moment. I would like to focus my remarks on the topic of exchange rates. In particular, I would like to focus on how the monetary policy reaction should be based in the exchange rate movements. I take my premise from the rapid appreciation episode we experienced recently in Albania, which forced us to launch an FX purchase program as a last line of defence towards ensuring medium term price stability. To cover this topic, first I intend to briefly discuss on various monetary policy regimes. I will then discuss on the implications of exchange rate movements for inflation targeting central banks. To conclude, I will give you a short overview of recent exchange rate developments in Albania and our reaction towards them. 1. The choice and implications of exchange rate regimes  A useful starting point on this topic would be to discuss the different options we have.