samchain/econo-pairs-v1 huggingface dataset:
Out of that pain and misery emerged a consensus – a hard won consensus – that low and stable inflation was a prerequisite for economic prosperity. More recently, though, there have been some worrying signs that cracks may be appearing in that consensus. A sense that inflation is somehow yesterday’s war. That central banks should focus more on growth. That a period of higher inflation may even aid the recovery. This is dangerous talk. It sometimes feels like we’ve been here before. One of the mistakes made by policymakers in the late 1960s was to allow inflation to get out of control after nearly two decades of price  2  King (1997), “Inflation targeting 5 years on”, speech given at the London School of Economics. 3  King (1997), “Changes in UK monetary policy: Rules and discretion in practice”, Journal of Monetary Economics. 4  George (1999), Annual Cornwall Lecture. BIS central bankers’ speeches  3  stability. As Sir Alec Cairncross, who worked in a host of senior economic roles in the heart of the civil service during this period, put it “...governments in the last years of the 1960s …allowed inflation expectations to develop that proved increasingly difficult to extinguish” (Cairncross 1992). There is little doubt that policymakers of that time had a strong aversion to inflation, but they were complacent about the risks posed by further stimulus. It would be irresponsible to repeat the same mistakes again. How do we ensure that the lessons of yesteryear are not forgotten?

And ultimately delivering low and stable inflation is the best contribution monetary policy can make to achieving a robust and sustainable recovery. The trade off between growth and inflation Let me turn now to the second issue I wanted to discuss today which concerns the operation of monetary policy and, in particular, the likely trade-off between growth and inflation in the current environment. As I said, in February the MPC made clear that we thought it appropriate to bring inflation back to target more slowly than usual in order to support the nascent recovery. But is there a case for monetary policy going even further? What if, as some commentators have claimed, it were possible for the MPC to inject additional monetary stimulus, thereby providing even greater support to growth, with relatively little consequence for inflation. Stronger growth with little or no higher inflation: surely that would be a good use of the MPC’s flexibility? There are two strands of argument put forward as to why the current trade-off between growth and inflation may be unusually favourable. The first is that cost and price pressures in the current environment may be relatively insensitive to the degree of slack in our economy. If that were the case, the economy could grow relatively rapidly, absorbing spare resources and capacity, without putting much upward pressure on wages and prices. In economists’ speak, the so-called Phillips curve – which sketches out the relationship between spare capacity and cost and price pressures – may be relatively flat at the moment.
In the short term, however, there may be a conflict between how quickly we should aim to bring inflation back to target and the aim of high and stable employment. When we set the policy rate, we weigh these considerations against each other. Inflation is now markedly above the target. We could have raised the policy rate higher and faster than we have so far. Inflation might then have come down faster. The reason we are taking a while to bring down inflation is that our job is also to contribute to high and stable employment. We do not want to restrain the economy more than that required to tame inflation. Chart 8: Prospects for lower price inflation and somewhat higher unemployment The Bank's forecasts in March indicate that inflation will move down towards 2 percent over the coming years. If developments turn out as projected, inflation will return to target with little rise in unemployment. There is substantial uncertainty about the outlook. The future policy rate path will depend on economic developments. Problems in some US and Swiss banks have led to large movements in global financial markets over the spring. The authorities in these two countries have intervened to reduce the risk of contagion to other institutions and markets. The turmoil has had only a limited impact on funding costs for Norwegian banks and mortgage finance companies. Norwegian banks are profitable, solid, and have ample liquidity. They are well positioned to cope with higher losses and market stress.

Ida Wolden Bache: The conduct of monetary policy Introductory statement by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), at the hearing of the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament) in connection with the Storting's deliberations on the Financial Market Report, 9 May 2023. ***  Accompanying charts of the speech Thank you for this opportunity to report on the conduct of monetary policy. When I was here in April last year, Norges Bank had started a gradual normalisation of the policy rate following the coronavirus pandemic. Chart 1: In March 2022, a gradual rise in the policy rate was envisaged The Norwegian economy had recovered after the sharp downturn during the pandemic. High energy prices and a sharp rise in international goods prices had driven up consumer price inflation to a level markedly above the inflation target. Economic activity was strong, and job vacancies were high. Norges Bank expected rising wage growth and higher imported goods inflation to push up inflation through the year, and overall price inflation was projected to be 3.4 percent in 2022. The policy rate was projected to rise towards 2 percent over spring 2023. Chart 2: The policy rate has been raised more than projected a year ago These forecasts were less than accurate. The policy rate has been raised faster and more than projected in March 2022.
The collection of data on financial assets and liabilities at household level ceased with the abolition of the wealth tax in 2007. The financial and national accounts do provide some information on how households’ various financial and real assets have changed on aggregate. But when it comes to wealth developments for individuals, we do not have much to go on, as the statistics in principle came to a stop in 2007. There have been admirable attempts to estimate developments since then via the capitalisation of incomes and expenditure s, but the quality cannot of course be compared with register data. 6 Several commissions in recent times have noted that there is a substantial need for up-to-date wealth statistics at individual level to be able to analyse specific questions such as financial stability risks and over-indebtedness, but also to gain a deeper insight into the income distribution in general.7  Distributional effect of reduced unemployment and higher employment important So far we have discussed the different channels by which an expansionary monetary policy can affect income distribution via capital gains, yield and interest rates. As you will note, however, I have avoided saying anything specific about the size of the distributional effects. As I mentioned earlier, it is difficult to determine exactly how large these effects are and not even their direction is always evident. But rising stock prices and thereby larger profits when selling these assets will tend, all else being equal, to lead to a more unequal income distribution.

 My point is that the analysis would benefit from having a broader perspective. We should look beyond the household stretch to household strain, which encompasses more structural factors.  I would refer to two dimensions of the household strain: quality of living and inequality of income, savings, and access to credit.  1. Quality of living: - overcrowding – CEE countries have the highest concentration of dependent children, and the lowest number of rooms per person (Figure 4 and 5); - poor living conditions – CEE countries have the largest share of population living in poor conditions (Figure 6); - high risk of poverty or social exclusion (Figure 7) – despite having high ownership rates, CEE countries have high shares of people at risk of poverty or social exclusion (slightly declining after EU integration); 2  - To partially compensate for the low quality of living, and given the social pressure of a high ownership rate, property taxes are relatively low in CEE countries (Figure 8); - Low quality of living creates pressure for new housing, despite financial difficulties to service new loans. It also creates pressure for migration, with longterm implications for financial stability.  2. Inequality: - Income inequality: Romania, Bulgaria and Czech Republic have the highest Gini coefficient in the EU (Figure 9); -  Housing cost overburden: If we adjust for rent-related costs (as CEE countries  have high ownership), many CEE countries are on top.
Vítor Constâncio: Implications of the Single Supervisory Mechanism (SSM) on the European System of Financial Supervision (ESFS) Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at a Public Hearing on Financial Supervision in the EU, Brussels, 24 May 2013. *  *  *  Ladies and gentlemen, Thank you very much for inviting me to open this session on the implications of the Single Supervisory Mechanism (SSM) on the European System of Financial Supervision (ESFS). At present, the only answer that can really be given on this issue is, “it depends”. While the SSM will in principle be just another supervisor around the table, its impact on the ESFS will clearly depend on how many Member States eventually decide to join. In our view, the more Member States take part, the better it will be for the functioning of the ESFS and the single market more generally. First, having as many as possible countries in the SSM will reduce the scope for coordination failures. This will in turn facilitate the coordination function of the European Banking Authority. Second, a larger SSM is the best way to safeguard the single market in financial services. The more membership overlaps between the EU and the SSM, the more consistent will be the application of supervisory and regulatory practices.

Communications strategies are now seen as a crucial part of central bank activity, and no just as icing on the cake. The  BIS Review 71/2004  1  emphasis now is increasingly on forging links, building bridges and storing up political capital and public goodwill that will help us deal better with the next crisis. Similar observations might be made on the subject of the effectiveness of central banks - surely the result that we all strive for. Radical changes in our functions, progress in technology, and the process of accountability have all dictated cuts in staffing and resources, and various forms of streamlining and re-engineering. Much of this can be healthy and refreshing. But we should also be mindful of the need for flexibility, for some reserve capacity to deal with sudden and unexpected events. This is why the increasing focus on strategic planning and risk management, reflected in your discussions this week, is welcome. There is, of course, much still to be done on these subjects. I understand that the discussions over the past few days have been lively and, at times, quite passionate. There is, I think, one main reason for this - and it is the same reason why this meeting has attracted such an excellent attendance. Central bank governance is a field in which great change is taking place. A number of drivers are forcing this change.
In the slightly longer term, questions also remain about the outlook for global trade at large, a factor that has a substantial impact on an export-dependent country such as Sweden. According to some analysts, the development of global trade is now weaker than implied by historical links with global growth.10 If this is the case, is it because companies have less access to trade credits in the wake of the financial crisis or because there has been a structural shift in the growth curve for global trade? It is perhaps not reasonable to expect the high rates of growth that we saw in the early 2000s – and which were boosted by globalisation in the wake of technological development, lower transports costs, increased specialisation, China joining the WTO and so on – to continue. It is also important to monitor how Swedish exports develop in relation to global trade. These are complex questions that it is probably too soon to answer. However, there is every reason to return to these questions too, particularly with regard to the potential consequences for Sweden. All in all, the Riksbank’s assessment from the September Monetary Policy Update is nevertheless that  10  See, for example, the World Trade Organization (2013)  BIS central bankers’ speeches  9  economic activity abroad will, if only gradually, make a positive contribution to Swedish growth. Figure 7 What can we expect of world trade?

The Labuan IBFC's competitiveness will be further enhanced through a revision of the pricing structure pertaining to incorporation and maintenance fee charges. There will be an annual reviews and prices will be revised in response to competitive market developments. The Labuan IBFC will also leverage on the national strategy of the Malaysian Islamic Financial Centre by promoting Syariah-compliant trusts and foundation. These products will complement Islamic financial products and services already available in Kuala Lumpur. Efforts will also be taken to further develop Labuan's captive insurance business which has enjoyed commendable growth over the years. Conclusion Ladies and Gentlemen, The establishment of Labuan as an international offshore financial centre in 1990 was indeed a bold step in its time. We are now seeing the payoffs from this initiative. With the transformation of Labuan as an International Business and Financial Centre, our ambition will be taken further. The new name signals that Labuan is ready to take on the much broader and larger role. The new name also represents a commitment. A commitment for the future. To demonstrate this commitment, the Government and the regulators have put in place the supportive and enabling environment to promote a more connected and more cost effective environment. Continued initiatives will also be taken to remove any impediments and obstacles to a more efficient delivery system and to advance forward the Labuan IBFC. 2  BIS Review 10/2008  The responsibility for ensuring the ambitions of the Labuan IBFC to be realised, is however, a shared responsibility.
I began by saying that the State Bank of Vietnam is currently in a situation similar to that of the Swedish Riksbank just over a decade ago. However, it is also the case that the conditions are different in certain respects. One difference is that the Swedish credit and money markets had been deregulated completely during the 1980s and early 1990s. This meant, for instance, that the central government issued bonds, through public auctions and at predetermined times, and actively attempted to promote the development of a secondary market. Thus, there was already a clear channel through which monetary policy could have an effect. Another difference was that we in Sweden had the support of a long tradition of comprehensive production of public statistics that made our work easier. These are factors that, as I understand it, do not apply to the same extent here in Vietnam, at least not yet. Vietnam has thus – like all countries – its own special conditions that may need to be taken into account and may make it difficult to formulate monetary policy as an exact blueprint of the system in  7  For a detailed discussion of “central bank transparency”, see, for instance, Chapter 1 of Blinder, A.S., (2004), The Quiet Revolution – Central Banking Goes Modern, Yale University Press. 6  BIS Review 52/2006  another country.

Inflation targeting is thus much more demanding than a fixed exchange rate regime with regard to the central bank’s analytical work and its ability to communicate its policy. Whether this is something that should be regarded as a disadvantage or not is of course a question of judgement. For the Riksbank, the transition to inflation targeting heralded the start of a fairly comprehensive increase in competence in the field of economics. The number of PhD economists at the Riksbank has risen sharply in recent years and our research in areas related to monetary policy has expanded considerably. Financial stability Let me now move on to the other central component of an efficient payment system. This concerns the stability in the financial system; particularly in the financial institutions that supply payment services, i.e. primarily the banks. Financial stability is currently regarded, parallel to the price stability target, as the main task of a modern central bank. The financial system has essentially three main tasks: converting savings into financing, managing risk and providing efficient channels of payment. Let me give a basic example. A bank receives savings from households which it then lends to other households or to companies that need to invest. Banks are specialists at valuing, monitoring and managing credit risks in the households and companies to which they lend.
Marvin’s intellectual pursuit of all aspects of the ZLB logically drove him to explore the possibility for currency to have a digital component. Although many think of central bank digital currencies as a new-fangled idea, Marvin was thinking deeply about the prospect long ago. This has become one of the hot topics in the world of central banks today. The conversation that Marvin began in Woodstock in 1999 became the basis for discussions that were had later on at the FOMC meeting in January 2002. At that FOMC meeting, Marvin expanded upon the idea of asset purchases as a policy tool that he had proposed in his paper at the conference in Woodstock. He emphasized that the Fed asset purchases can affect financial conditions and thereby the economy. He was expanding the conversation away from thinking about conventional monetary policy to unconventional options, like the balance sheet. Importantly, he distinguished between central bank purchases of short-term government securities, as the Bank of Japan was doing at that time, versus purchases of longer-term securities. Marvin viewed purchases of short-term securities as ineffective under the ZLB, while he saw purchases of longer-duration securities as potentially powerful owing to a “preferred habitat” motive on the part of investors. Of course, large-scale asset purchases later became a tool of critical importance for easing financial conditions in the United States and abroad. Although the consequences of the predicted Y2K glitch were minimal, the ZLB became a central issue when the financial crisis hit.

These show how Marvin’s insights shaped some of the most prominent discussions in monetary policy. Before I do so, it’s helpful to look back about 20 years. As the clock ticked down on the 20th century, many people’s attention was not on the ZLB. Most were more concerned about the millennium bug that had the world on high alert. Truth be told, the ZLB wasn’t perceived to be a looming problem in the United States back in 1999. The economy was doing very well and the target federal funds rate was 5-1/2 percent at the end of the year. Up until then, the only historical reference points for the ZLB were from the Great Depression of the 1930s and, more recently, Japan in the 1990s. It was simply not part of the experience of postwar Europe or the Americas. However, a small group of economists, with Marvin at the forefront, was asking whether the ZLB could pose a challenge here in the U.S. and, if so, what would be the consequences and potential remedies. Researchers and policymakers began to turn the dial up on the discussion around the ZLB.
  those two difficulties combine to produce a perception of asymmetry in IMF surveillance. It may be compounded by a more fundamental and natural asymmetry between surplus and deficit countries, when it comes to implementing adjustment measures. And, some would say, there might also be a de facto asymmetry between reserve and non reserve currencies, although, as I shall mention later, the situation is more subtle. These difficulties were apparent during the last part of the 20th century. They led to many discussions about the proper role and organisation of the IMF 1. But what makes the “disciplinary” approach almost impracticable today are the changes that have occurred in the world at the turn of the 21st century. The world today stands in stark contrast with both the Bretton Woods era and the period that followed immediately:   The first – and most obvious – difference is the number of countries that are active participants to the system and have a stake in its functioning. The monetary and financial world is becoming increasingly “multipolar”. While the current system comprises three currency blocs, at least one (the Chinese RMB) and may be other additional systemic currencies will emerge in the future. Greater diversity goes with increased complexity. “Hegemonic” systems are easier to build and manage than multipolar ones where responsibility is more diffuse. So, in the future, one can expect that coordination problems will be more difficult to solve.

Then, the collapse of a major financial player mid-September 2008 transformed a large-scale crisis of confidence into a global financial panic. Financial intermediaries scrambled to restore liquidity buffers, shed risk and tightened lending conditions. Collectively, they engaged in a large-scale process of “deleveraging”. Credit spreads surged and trading activity in a large number of markets collapsed. In these unprecedented circumstances, the ECB’s primary mission was to preserve price stability, in line with our definition – below 2% but close to 2% – and therefore contribute to financial stability. As the inflationary pressures seen over the summer of 2008 receded, we swiftly reduced our policy interest rate in a tight series of steps down to 1%. This interest rate level has not been experienced in the countries of the euro area at any time in recent history. In parallel, we had to tackle the paralysis of inter-bank transactions in the money market. As you know, the flow of credit is primarily channelled by banks in the euro area. A complete breakdown in the funding relationships that constitute the money market would have derailed the bank lending channel altogether. The interruption of the bank lending channel would have made our policy action ineffective. It could have turned the financial crisis into a profound depression. This is what motivated the second tier of our approach to crisis management: what we refer to as our policy of “enhanced credit support”.