samchain/econo-pairs-v1 huggingface dataset:
13  All speeches are available online at www.bankofengland.co.uk/speeches  13  Chart 11: Majority of long-horizon variation in UK equilibrium rates explained by international factors  Notes: Forecast error variance decomposition from a vector error correction model, share not explained by domestic R*. Sources: Holston, K, Laubach, T and Williams, JC (2016), ibid. Global factors also influence domestic financial conditions and therefore the effective stance relative to the shorter-term equilibrium rate of monetary policy, r*. The presence of borrowers and lenders operating in multiple currencies and in multiple countries creates multiple channels through which developments in financial conditions can be transmitted across countries. 35  For example, changes in sentiment and risk aversion can lead to international co-movement in term premia, affecting collateral valuations and so borrowing conditions. Work by researchers at the Bank of England, building on analysis by the IMF,  36  shows that a single global  factor accounts for more than 40% of the variation in domestic financial conditions across advanced economies. For the UK, which hosts the world’s leading global financial centre, the relationship is much tighter, at 70%. Highlighting the openness of the UK economy and financial system, a third of the business-cycle variation in the UK policy rate can be attributed to shocks that originate abroad. 37  One important channel of global spillovers is of course monetary policy.

Payment service providers will be able to compete for customers supported by an efficient and secure system. Banks save considerable sums because an extensive network of branches is no longer necessary. The infrastructure is a collective good that benefits everyone. 1/5  BIS central bankers' speeches  It has long been our experience that industry operators come together and agree good solutions in partnership with Norges Bank. But developments in technology and market structure, where payment services are increasingly becoming a competitive arena, may hinder the emergence of good common solutions. We run the risk that progress will slow and the payment system will become fragmented because the common infrastructure is eroding. We must now consider whether Norges Bank should take action to counter this fragmentation. Future users of payment services will hardly be satisfied with payment transactions that take several hours or days to complete. The infrastructure for real-time payments is therefore critical. In 2016, Norges Bank took the initiative on a joint project with the banking industry to put in place an improved real-time payment platform. In spring, Norwegian banks declined the invitation to participate in the P27 project. The soon-to-be-launched Straks 2.0 instant payment platform is an improvement, but not a permanent solution for real-time payments in Norway. Among other things, it is not sufficiently well-suited to business users. The question is how we proceed from here. It has proved to be a challenge to drum up support for carrying out the necessary modernisation of the infrastructure owned by industry bodies.
Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 17 December 2021. * * * Good afternoon, We have made the decision to raise the key rate by 100 basis points to 8.50% per annum. Inflation is still high. Our decision is aimed at ensuring its reduction to the target by the end of next year. I would now dwell on the reasons behind our today’s decision. I will start out with inflation. Its acceleration in October and November was caused by both transitory and steady factors. The former include delays in harvesting, soaring prices for New Year’s holidays abroad, as well as the persistent deficit in the car market due to disruptions in component supplies, and a number of other supply-side constraints. Even if we leave aside the surge in product and service prices, we have the stable component of inflation which considerably exceeds our target. This is because the growth of demand still surpasses the capacities to ramp up supply. In this context, our special focus is to ensure that the monetary policy is well-balanced. What do we mean by that? It is the stable component of inflation related to demand trends that monetary policy impacts directly. However, we should not ignore temporary factors. According to the experience of the last three months, these factors are not only accelerating overall price growth, but are also intensifying inflation expectations.

The number of vacant jobs is significantly higher than two years ago, specifically by about a third. Many industries are facing a shortage of workers, including both specialists and low-skilled workers. Speaking of the inflow of labour migrants, it has already returned to the pre-pandemic level, according to recent data. However, as the demand in the industries with a large portion of labour migrants (in courier services and construction) has surged over this period, companies still experience a deficit of labour migrants. Consequently, the rise in the demand for labour in various groups of employees is translating into the steady increase in nominal wages. In the course of the discussions preceding our today’s decision, several executives of our regional branches stressed that increasingly more companies were forced to raise wages at a double digit pace to be able to retain their employees. The staff shortage is a factor limiting enterprises’ capacities to expand output. It is hard for them to catch up with growing demand. This suggests that proinflationary risks brought about by labour market gaps are strengthening. Monetary conditions continue adjusting to our earlier decisions on the key rate. After the meeting in October, nominal interest rates, including on federal government bonds, deposits, and loans, continued to go up. Yields on federal government bonds rose over the entire curve. The growth of short-term yields has been mostly driven by the increase in the key rate and the updated forecast of its further path, whereas long-term yields are largely influenced by the escalation of geopolitical tensions.
It would therefore reduce the likelihood of sharper adjustments ultimately taking place in the housing market, the influence of which on the overall working of the economy cannot be understated. For a sounder functioning of the complex markets for land and housing, at least two groups of measures would be required. On one hand, those aimed at influencing the determinants of house prices and, in particular, the regulations and practices restricting the supply of land. And on the other, those intended to correct the distortions behind the marked bias in the Spanish market towards owner-occupied as opposed to rented housing. With regard to the financial system, the year 2002 was, once again, a particularly complicated one. Adding to the usual effects any economic slowdown and correction of excesses built up in upturns will involve were other factors, including most notably corporate and accounting shortcomings of a structural nature, which have undermined the very institutional foundations of markets. This crisis of confidence was exceptional due above all to the doubts cast on elements as fundamental as the recording of transactions at listed companies, the veracity of information provided to investors, conflicts of interest within companies and between these and their main financial agents or auditors, and the most elementary mechanisms of corporate governance. Within this complex picture, two positive features should be underscored.

Jaime Caruana: Presentation of the Annual Report of the Bank of Spain Address by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of The Basel Committee on Banking Supervision, to the Governing Council of the Bank of Spain on the presentation of the Annual Report, Madrid, 13 June 2003. *  *  *  Ladies and gentlemen, Twelve months ago, on presenting last year’s Annual Report, I highlighted the significance of the year 2002 as the final step in the replacement of the peseta by the euro. Some of the features characterising economic developments last year were also discernible at that point: uncertainty and a crisis of confidence prompted by a wide-ranging set of shocks to which I shall refer during this speech. This conjunction of factors is perhaps not so much the outcome of chance as it is of the fact that, in a globalised economy, shocks that might previously have had local effects now feed through rapidly and sharply to the world economy as a whole. Given this adverse external environment, it is worth reflecting on the conditions our economy should maintain to continue with the process of convergence towards the income levels of the most advanced countries. As on previous occasions, I shall commence with a brief review of the international economic environment. The world economy experienced a modest, hesitant and, in terms of its geographical distribution, uneven recovery in 2002. Against a backdrop of notable uncertainty, the growth of the main economies was lower than expected.
I believe this has broadened my own horizons and enabled me to interact with many different people from different cultures all over the world – creating and cementing many valuable friendships. The second reason is that the theme of this year’s book fair – READING TOWARDS A SUSTAINABLE ECONOMIC FUTURE – touches squarely on my own professional responsibilities as Governor of the Bank of Zambia. Our main pre-occupation at the Bank of Zambia is to help Government attain a sustainable economic future by working to keep increases in the average prices of goods and services low, the price of money (i.e. interest rates) low, and maintaining a stable exchange rate and financial system. This is the best way in which we can assist the Government as it works to advance the welfare of the Zambian people. Needless to say, one of the key pre-requisites for the Government in achieving this goal is the need to develop an educated and enlightened citizenry, which can effectively contribute to the development process. From the Bank of Zambia’s own perspective, the experience of central banks around the world is that effective communication with the public is a very important part of the success of central banks in achieving their objectives of price and financial system stability. The written word, although not the oldest form of communication, is perhaps the most powerful and enduring form for communicating and exchanging ideas. It is therefore indispensable in the work that we do.

As initially stated, we are in the final stage of the savings bank restructuring process, implementing the strategy envisaged in Royal Decree-Law 2/2011 approved by Parliament in February. Underpinning this legislation are three pillars. First, a very significant increase in solvency. All institutions shall comply with a core capital ratio, in which only top-quality instruments are eligible, of 8%, rising to 10% in the case of institutions that rely on wholesale markets for at least 20% of their funding and none of whose share capital or voting rights are placed with third parties. Second, FROB backing for those institutions that do not reach these new minimum capital levels by their own means. 2  BIS central bankers’ speeches  Third, new arrangements for the instrumentation of FROB aid, which now ceases to be provided as preference shares, taking rather the form of subscription to shares in the bank resulting from the conversion of the savings banks concerned. *  *  *  On 10 March 2011 the mechanisms envisaged in the new regulations were set in train with the publication by the Banco de España of the situation regarding institutions’ capital. Twelve banks (four commercial banks and eight savings banks) did not reach the figures required to comply with the ratio, needing an aggregate additional amount of € billion. Finally, the number of institutions with a shortfall rose to 13 following the collapse of the Banco Base Institutional Protection Scheme (IPS).
It is also our duty to complete the European regulatory framework with the finalisation of the resolution mechanism to make the functioning of the banking sector smoother – in line with the spirit of the Banking Union, also enabling the Capital Market Union (CMU) to bloom, within the holistic approach of the “Financing Union for Investment and Innovation” I have suggested. Finally, we must ensure that the new regulatory framework is consistently implemented everywhere, and avoid any backtracking outside Europe. Financial stability is a global common good, and as such, regulatory arbitrage must not become an option. * * * Let me conclude. Credibility for central bankers now rests on admitting that monetary policy and macroprudential policy are somewhat porous, especially in a situation where we could have an upward financial cycle associated with weak inflation. This calls for a consistent action by central banks that covers both areas: price and financial stability. Moving away from an overly strict separation principle, let us try to be complete and consistent central bankers playing an active role in monetary policy as well as in macroprudential policies. 1 Altavilla C., Boucinha M., Peydro JL, 2017, Monetary Policy and Bank Profitability in a Low Interest Rate  Environment, ECB Working paper series #2105, October 2017. 2 Ratio of non-financial agents’ debt to GDP, first quarter 2017. Source: Eurostat, Federal Reserve, Banque de  France calculations.

More than once, they brought on political tension, between those in the government who believed in it and those in the opposition, or even the military, who thought otherwise. In one incident, it even caused a change in the central bank governor. Finally, we had to float our currency in 1997. Since then, we have adopted Inflation Targeting as our monetary policy framework. A core inflation target was announced at between 0 and 3.5 % per annum. The central bank will regularly monitor economic changes and make forecasts. If we see that the rate of inflation has a tendency to exceed the range, we will adopt a tighter monetary policy stance by increasing the policy interest rate, and vice versa if we see it going under the range. The policy rate that we use is the 14 day repurchase rate. BIS Review 48/2002  1  This is completely different, of course, compared to the days of fixed currency regime when interest rates in Thailand would move mostly in tandem with the US rates. The change in the monetary policy framework therefore affects the financial environment and your businesses a great deal. Development of the bond market What other change also happened? One very important change that has occurred in Thailand is the rapid development of the bond market, which took off after the 1997 crisis. The bond market is an important tool for safety and soundness of the financial institution system.
On one hand, a crawling peg helps control inflation when it is brought down from 30%–40%, but it is less useful when a lower level is envisaged, since the crawl incorporates inflation expectations. On the other hand, exchange rate flexibility was seen as an asset for an economy as big and rigid as Romania was at the time, especially given the upcoming stages of capital flow liberalisation. Against this background, Romania opted for inflation targeting as early as 2002, even though it took several years of preparations until the actual adoption, in August 2005. The NBR chose the “light” version of the strategy, which meant retaining the managed float feature of the exchange rate regime. The actual form that inflation targeting took in Romania matched the “managed-floating plus” concept, considered the most suitable choice for an emergingmarket economy involved in the global capital market. This concept, introduced by Goldstein in 2002, combines the managed float part, allowing for FX market interventions in order to smooth out excessive volatility, with inflation targeting as a monetary policy strategy and an active pursuit of measures to limit the degree of currency mismatches in the economy. As a matter of fact, in an IMF paper published in 2003, the light version of inflation targeting is found to be widely spread among emerging economies, where fiscal dominance continues to weigh and monetary policy cannot set aside concerns over financial stability and external equilibria. 2.

Frankly, I understand that the general public is not familiar with concepts like overheating or positive output gap, but I believe that annual growth rates to the tune of 20% for retail sales and in excess of 10% for wages are more than self-explanatory. Still, with all the obvious signs – even for non-economists – that the economy is growing fast, we are criticised for not fighting deflation. The recent experience has made us painfully aware that – despite the large amount of information provided through a wide range of communication vehicles – our messages get through to a much lesser extent than we had thought. Therefore, we should enhance our efforts in escaping the professional jargon and trying to be as accessible as possible when explaining to the public the rationale behind our monetary policy decisions. If I were to conclude on Romania’s experience with inflation targeting, I would say that it worked quite well, even though the concept of inflation targeting has not been immune to criticism, especially in the post-crisis period. I would mention here Axel Weber, who suggested in 2015 that inflation targeting is a simplistic framework that could not stabilise the value of money in a complex and constantly evolving economic environment. However, his opinion is not shared by other well-known economists.
This is what we have done since mid-2013, when the 6  BIS central bankers’ speeches  Board announced that in great probability a monetary easing was coming, which immediately translated into a reduction in long-term interest rates. Later on, in October 2013, we began the monetary expansion process that involved a reduction of 200 basis points off the monetary policy rate in one year. In these months we have acted with conviction, allowing an easing of financial conditions and a peso depreciation that we believe important for the economy’s cyclical adjustment. Thus, during 2014 our economy was the one that lowered its policy rate the most among a group of emerging countries, with the obvious result that our currency has also depreciated the most (table 3). This has not been cost-free. The depreciation of our peso has certainly been the biggest source of the high inflation rate of this year, but it is a cost that any healthy economy like ours can assume in these circumstances, provided that the situation is transitory, as we believe it is. This sets us apart from other emerging economies, which because of vulnerabilities accumulated in the past, now have difficulties to take more resolute action in this matter. Today our economy is ready to resume a higher growth path. This assertion is based on the fast and significant adjustment it made during the year, as reflected in the current account, interest rates and the real exchange rate.

At any rate, our projections for next year assume that these expectations will recover and provide support, together with many other factors, to a rebound in economic growth. Let me now share with you our baseline scenario and the main risks we have identified in the reports we present today. BIS central bankers’ speeches  1  Macroeconomic scenario Inflation brought surprises all throughout 2014 by being unexpectedly high. Earlier in the year, the Board assumed that inflation would be at 3 percent at year’s end, partly because the accumulated depreciation would have a limited effect on inflation, in line with historical patterns. Such evaluation was modified as actual data showed higher than expected transmission to final prices. So, as soon as June the inflation forecast was revised significantly upward. In recent months, such transmission has been in line with expectations. However, the sharper depreciation of the peso and some specific elements – in particular, the rising price of some fresh fruits and vegetables – pushed inflation up above projections. These increases reversed somewhat in November, helped by the drop in fuel prices, which should continue to play a part in lowering inflation over the coming months. Private inflation expectations also posted significant changes during the year, consistently with the aforementioned surprises (figure 1). Regarding output, in the third quarter both domestic demand and GDP grew less than forecasted in September, although the surprise was milder than it had been in the second quarter.
Frankly, it’s too early to tell: we know the final rate of inflation, 2%; but we don’t know yet the « terminal interest rate », or the policy rates that will ensure a timely return of inflation to our target, while seeing no reasons for increased expectations on these. Let me rather give some light on the first part of the journey, the normalisation till neutral rate; for sure it’s unobservable, but this one can be estimated, in the euro area at below or close to 2% according to me. I sometimes use a simple metaphor: as long as it is about lifting off the accelerator, we have to act for sure, in a determined but orderly way, and we should be there by the end of the year. Afterwards, the question could come of pressing the brake, and tightening if needed: but this part of the journey remains today an open question, and will deserve further assessment and reflection, in due time. Let me only stress one last and obvious point of yesterday’s decision: it marks the return of interest rates in positive territory. This historical step brings with it multiple dimensions that need to be revisited: on our operational framework, on our TLTRO operations, on our remuneration mechanisms of bank’s reserves. This is a matter that, as Christine Lagarde said yesterday, we will take up without delay. May I add that with a long view, monetary policy cannot be the only game in town?

Better information to allow investors to take a view An old adage is that which is measured can be managed. Information about the carbon intensity of investments allows investors to assess risks to companies’ business models and to express their views in the market. A well-known dictum of macroeconomics is Say’s Law: that supply creates demand. This means that the act of producing new products creates income and profits that ultimately finance the demand for them. By analogy, a framework for firms to publish information about their climate change footprint, and how they manage their risks and prepare (or not) for a 2 degree world, could encourage a virtuous circle of analyst demand and greater use by investors in their decision making. It would also improve policymaker understanding of the sources of CO2 and corporate preparedness. A carbon budget – like the one produced by the IPCC – is hugely valuable, but can only really be brought to life by disclosure, giving policymakers the context they need to make choices, and firms and investors the ability to anticipate and respond to those choices. Given the uncertainties around climate, not everyone will agree. Some might dispute the IPCC’s calculations. Others might despair that there will never be financial consequences of burning fossil fuels. Still others could take a view that the stakes make political action inevitable. The right information allows sceptics and evangelists alike to back their convictions with their capital.