samchain/econo-pairs-v1 huggingface dataset:
Some people who basically recognise this concern are inclined to argue that if a europarticipating country were to find itself in this situation - and given that it would have no macroeconomic way out, for example, through exchange rate adjustment, or monetary relaxation, or fiscal stimulus beyond the limits of the Stability and Growth Pact - then it would have an overwhelming incentive to take the sort of supply-side measures which have proved so difficult to implement hitherto. As one of my colleagues once put it to me “when we have exhausted all other possible policy options, we will finally be forced to do what we know to be the right thing!” And the populations in those countries would it is true have a similar incentive to accept structural change. I am not sure how far one can rely upon that. But it does in any event serve to emphasise that supply-side flexibility will be more crucially important than ever in the context of monetary union. I should emphasise at this point, Mr. Chairman, that I am not predicting that there will necessarily be serious tensions within the single currency area. There will no doubt be policy challenges - there always are, with or without monetary union. But it is difficult for anyone to predict how serious the problems will in fact turn out to be.

And, we work with area schools to improve students’ understanding of monetary policy, the Fed and economics. It is also important to me that I visit different parts of our District on a regular basis and talk directly with the people who live and work here. For example, last fall I visited Western New York and saw the many positive changes helping to revitalize what has been a slow growing economy for some time. Earlier this year, I met with companies on a visit to Brooklyn and observed some of the new hi-tech jobs that are being brought to the City – a good precursor to today’s presentation. While in Brooklyn, I also visited Brownsville, a neighborhood which underscores the reality of the challenges that many face and the fact that the economy is not improving for everyone. Later this year, I have similar trips planned to Puerto Rico, the Bronx and Albany. Obtaining on-the-ground intelligence is valuable and helps shape my view of the region, the economy and my outlook on policy. As you may know, the District we cover is quite diverse. It is not just a single regional economy, but rather many different local economies. Let me talk a bit about how the different parts of our region have been doing. Regional economic conditions Since our last briefing in November, the economic recovery has been variable across the region – strong in some places but weaker in others. Let me begin with the area that has struggled the most.
In New Zealand, the inflation target is formulated as growth in the consumer price index, but the mandate specifies factors for which adjustments may be made. These factors include price changes due to substantial changes in commodity prices, changes in indirect taxes, considerable changes in economic policy which directly impact prices, as well as natural disasters. There are no continuous, fixed indicators that make adjustments for these factors, but adjustments are made if the effects are substantial. In Sweden and Canada, the inflation target is formulated as growth in the consumer price index without special exclusions. However, in practice, indices for underlying inflation are used in the implementation and assessment of monetary policy. Sweden’s Riksbank often refers to an indicator that adjusts for the direct effects of interest rates and net indirect taxes. The Bank of Canada has now defined a new indicator as the operational target of monetary policy. This indicator is the consumer price index excluding the eight most volatile components: fruit, vegetables, petrol, heating oil, natural gas, domestic air travel, tobacco products and interest rate costs. Adjustments are also made for the effect of indirect taxes. The consumer price index is compiled to show developments in the cost of living. To some degree, the consumer price index overestimates developments in the cost of living. This is partly related to the fact that the measurement method does not adequately capture quality changes in the service industry.

If a central bank is committed to its price stability mandate and given enough time for the monetary transmission mechanism to work, there should be no reason why we should not be able to meet our inflation targets. However, there are two caveats here: –  2  In pursuit of its inflation target, a central bank can and might be forced to engage in un-conventional monetary policy tools. This is very much the case when central banks are flirting with the limits of conventional instruments of monetary policy (zero lower bound of policy rates or extreme risk aversion in the financial system). As we know, un-conventional tools can be both distortionary and present us with the risks of unintended consequences in terms of financial stability. Under certain premises, the risk associated with employing un-conventional monetary policy tools might be sufficiently strong to revisit the scope or the speed of fiscal consolidation;  BIS central bankers’ speeches  –  –  A prolonged undershooting of the inflation target might decouple inflation expectations from the inflation target of central banks requiring a more active monetary policy. This is not an argument against the policy mix per se; rather, it is a reminder of the crucial role that central bank communication and management of expectations should have. Third, we should avoid burdening monetary policy with too many goals or risk losing our credibility. With public finances highly indebted, politicians have been only too happy to place the burden of economic recovery on central banks.
If one wishes to detect problems in good time, before they develop into a crisis, it is important that the public authorities within a country and those in different countries can coordinate and exchange information. There have been large inadequacies in this field in previous crises. This can to some extent be blamed on confidentiality regulations, and the relevance of these may be questioned during a crisis, but in all honesty it can also be blamed in many cases on the authorities having insufficient interest in collaborating. Tendencies in the financial sector The financial sector is subject to rapid development. The borders between different financial activities are being eroded. Banks are selling insurance-like products and insurance companies are selling banking products. In some cases financial conglomerations are being established. Moreover, the trade in financial instruments has developed to such an extent that the risks are spread to a greater number of agents than before and also spread outside of the banks and insurance companies. Another development is the cross-border integration, particularly in the Nordic countries. Danish banks have established themselves in Sweden and Swedish banks in Denmark. Integration as such is a positive development, for several reasons and not least to increase economic growth. The Riksbank therefore supports measures, for instance within the EU, that lead to greater integration. It is therefore important that the authorities manage the risks that integration might entail to avoid setbacks.

The banks and public authorities currently have a much better grasp of the risks in the financial sector and how these can be managed and reduced – this is probably part of the explanation why we have seen a clear decline in the number of bank crises in recent years. At the same time, the developments I have outlined above, including the creation of large financial groups and payment centres, lead to new types of risk that need to be managed. The consolidation on the part of the market must therefore be met with increased coordination on the part of regulations and public authorities. We do not need more regulation and supervision; the challenge is that regulation and supervision must always be adapted to development and, as now, aimed at detecting and remedying the most critical vulnerabilities in the financial system. This sounds obvious, but it is not so easy to achieve in practice. Commercial developments are rapid, while it always takes a little longer to adapt laws and public authorities, particularly if regulation and supervision are at the same time to be harmonised across national borders. From my work in various international forums, I know that the Danish authorities in general share my views on the importance of the issues I have mentioned today and I look forward to continued cooperation with you in various ways to prevent financial crises and thus avoid having to manage them together. 4  BIS Review 83/2006
One characteristic of the Chilean economy is that changes in costs are regularly passed on to consumer prices. Markets for foodstuff are globally integrated and competitive. In the case of fuels, every week the changes in the international price are passed on to domestic consumers. However, there is a price stabilization fund to smooth out short run fluctuations  BIS Review 39/2008  3  and recently there has been a gasoline tax cut, which ameliorates the large increase in international prices. Finally, the electric power price-setting mechanism is designed to pass changes in upstream marginal costs to retail prices. Electric power rates, affected by a rise in costs, posted an average increase of 23% during 2007 compared with a less than 6% average increase between 2000 and 2006. This context of price flexibility provides the right signals to markets. In the case of Chile, with the increase in the prices of electricity and minerals, several investment projects are in the pipeline, which will propel an expansion of supply. Electricity $ MM; index Dec-98=100) 1200  240  1000  200  800  160  600  120  400  80  200  40  0  0 96  98  00  02  04  06  III  07  Energy investment (2)  III  08 (1)  CPI Electricity  (1) Figures as of February. (2) Includes investment in buildings, engineering, equipments and others.

We remain at a stage where making projections is a complex task, but the scenario for output, inflation and monetary policy path we presented in our last Report remains in force. Although private forecasts already recognize that the worst is over, it is still too soon to say that the work is complete. Output gaps are wide and we face the challenge of bringing inflation back to the target. Markets are incorporating a faster withdrawal of the monetary stimulus than the Bank considers appropriate for the purposes of meeting the inflation target. Particularly now that, as in the rest of the world, fiscal policy is entering a consolidation phase, monetary policy will have to continue providing the necessary stimulus to the economy for a prolonged period of time. This, in order for the recovery of output and the normalization of inflationary expectations to be well entrenched. One lesson from past crises is that a premature withdrawal can be very costly and can lead to subsequent policy reversals. Thank you very much. BIS Review 145/2009  5  Figure 1 Commodity prices (*) (index, January 2000=100)  600  600  500  500  400  400  300  300  200  200  100  100  0  0  00  01  02  03  04  05  Grains and cereals  06  07  08  Energy  09 Metals  (*) By the Goldman Sachs Commodity Index (GSCI). Source: Bloomberg.
As a consequence, the ECB independently defines its monetary policy strategy and quantifies the price stability objective. Instrument independence refers to the central bank’s ability to determine its policy tools in pursuit of price stability without interference. It means that the central bank has discretion to use and clarify its monetary policy instruments foreseen in primary law such as outright purchases, the collateral framework and its counterparties. Personal independence safeguards the capacity of the members of the ECB’s decision-making bodies to take decisions without external influence. This translates into requirements for appointment and protection from dismissal, as well as the length of mandates that should be longer than the electoral cycle. The members of the Executive Board have the requirements spelled out in the Treaty; their tenure is 8 years and their dismissal on grounds of either inability or serious misconduct is pronounced by the CJEU. The national laws for appointing governors, who in their personal capacity are members of the Governing Council, are to be compatible with the Statute of the ESCB. The reasons for dismissal are the same as for the members of the Executive Board and subject to the CJEU’s scrutiny as soon as there is knowledge of material evidence of such a procedure. Their terms of office must be 5 years at a minimum.

Macroeconomic developments and main assumptions  Now, I will talk about the macroeconomic outlook and our assumptions on which our forecasts are based. First, I will summarize the recent inflation developments, and then continue with the domestic and foreign demand outlook upon which we based our projections. In the fourth quarter of 2015, consumer price inflation (CPI) increased by about 0.86 points quarter-on-quarter to 8.81 percent, overshooting both the projections of the October Inflation Report and the uncertainty band around the year-end inflation target (Chart 11). Unprocessed food prices were the main drivers of this higher-than-forecasted rise in annual inflation. In fact, inflation excluding unprocessed food and tobacco was close to the October Inflation Report forecast in this period (Chart 12). The lagged effects of the Turkish lira depreciation were particularly evident through the core goods channel. Yet, the continued fall of import prices in the fourth quarter limited the rise in CPI inflation. Chart 11. October Inflation Forecasts and Realizations (Percent)  Chart 12. October Inflation Forecasts and Realizations Excluding Unprocessed Food and Tobacco (Percent)  * Shaded region indicates the 70 percent confidence interval for the forecast. Source: TURKSTAT, CBRT. In the fourth quarter, despite the decline in USD-denominated import prices, cost pressures on inflation continued due to food prices and exchange rate developments. We see that these rising cost factors limit the improvement of the underlying trend of core inflation BIS central bankers’ speeches  5  (Chart 13).
Reducing the central government debt to adapt to these requirements is naturally a sufficient reason for those countries that wish to take part in the union. However, for the Swedish economy, a high central government debt creates major problems regardless of whether we participate in the monetary union or not. Weak central government finances lead to uncertainty about future tax burdens. The experiences of the mid-1990s show that uncertainty of this kind can lead to high interest rates, a weak exchange rate for the krona and substantial fluctuations in both variables. As a small country, Sweden is wholly dependent on international companies and the international financial markets. In order to safeguard welfare, we must carry out policies that create confidence in investors and financiers. We have no freedom of choice in this respect. Reducing the interest burden for future generations is also important bearing in mind the future changes in population. The proportion of persons in the labour force will decrease considerably in the coming decades compared with those outside. Greater numbers of older people increase the costs of old age care and health care. At the same time, internationalisation means that it will be increasingly difficult to finance a welfare system by having higher taxes than elsewhere. In the light of this, it is firstly important that labour force participation and the number of hours worked increase in the economy so as to increase government revenue and payment capacity.

Having become independent in the 1990s, both the Banque de France and the Bank of Japan maintained price stability in the face of adverse pressures, whether inflationary or deflationary, making use of a range of appropriate instruments. Participating in the community of central banks that has gradually been built up, the Banque de France and the Bank of Japan, in parallel, have been regional pivots of the central bank function. After the Second World War in particular, our two institutions favoured co-operation with the central banks of economic regions undergoing reconstruction and newly emerging markets. Finally, during the twentieth century, we carved out a place for ourselves in the world by adapting to the new international functions: the more dynamic the international markets were, like in the 1920s and in stages from the 1960s onwards, the more our two banks’ international functions developed. 2  BIS Review 1/2008  This morning’s session, concerning the history of our economies and institutions, will enable us to shed light on all these aspects. The afternoon’s session will focus on developments in our economies and institutions in an increasingly globalised world. Globalisation is not a new phenomenon. The past 150 years of diplomatic and economic relations between our two countries are proof of this. However, the scope and the speed of the current stage of globalisation have far outstripped anything experienced in the nineteenth and twentieth centuries.
The size of the imbalances and the persistence of the forces supporting them probably mean that we will be living for a prolonged period of time with the tensions that could come with the need for adjustment. The risks associated with this adjustment process may be magnified by changes in the household balance sheet in the United States. The average household in the United States today has a higher level of debt to income and is somewhat more exposed to interest rate risk than in the past. The sustained rise in housing prices and the scale of borrowing against housing assets raises the possibility that a rise in risk premia could have a greater impact on household spending that would have been true in the past. The adjustment process is also complicated by the fact that the rest of the world does not appear likely, even over the medium term, to be in a position to provide a sufficiently strong offsetting source of demand growth to compensate for the necessary slowing in U.S. domestic demand. Policy actions to promote structural reform in the labor, product and financial markets could potentially change this, but the policy changes required are politically difficult, and their effects on net savings over time might be offset by demographic and other forces working the other direction. A number of observers have suggested that we can live comfortably with these imbalances for a long time, with very little risk to the U.S. and world economy.

Our current account deficit is now running at a rate of above 6 percent of GDP, a level without precedent for a major economy. It matters because of the composition of the imbalance. Our trade deficit is now roughly the size of the current account deficit, and very large relative to our export base. And our net investment income balances are now likely to move into deficit. It matters because of the trajectory of the U.S. imbalance. On reasonable assumptions about its likely near term path, this deficit will produce a very large net deterioration in our net external liabilities relative to national income, with progressively larger net transfers of income to the rest of the world. This pattern should concern us because it is not simply the result of the savings and investment decisions of the private sector. The fact that we are using a substantial part of the savings we are borrowing from the rest of the world to finance an unsustainable level of public borrowing leaves us more vulnerable than if those savings were being used for productive private investment. Large structural fiscal deficits limit the size of the sustainable external imbalance for any country, even the United States, and they necessarily increase concern about the terms on which we are likely to finance the present imbalance. 1/3  It should concern us because of how the imbalance has been financed.
Throughout 2011 and in 2012 to date, positive steps have been taken. Several countries have launched ambitious fiscal adjustment programmes and undertaken banking system recapitalisation and restructuring processes. And structural reforms in the labour market and in the services sectors have been approved. Also, on a Europe-wide scale, debt-ceiling monitoring mechanisms have been reinforced, as have the procedures to sanction non-compliance. Further, under the new Treaty on Stability, Coordination and Governance, there have been moves to promote the explicit recognition of the commitment to budgetary stability in national legislations. Along with this progress in the fiscal realm, a new framework has been established to prevent and correct macroeconomic imbalances. This Excessive Imbalance Procedure, as it is known, should be instrumental in the early detection of vulnerability and in setting in place the necessary corrective measures. With the establishment of the European Stability Mechanism, there has likewise been headway in creating a permanent crisis-management mechanism. In sum, there has been significant progress. But frequently these changes have, as the markets say, been “behind the curve”; their implementation has been excessively slow and they have been subject to too many frictions, which has fuelled investor doubts over the ability of European governments to move forward and forge consensus on matters pivotal for governance in the area. Under these conditions, ECB action has been decisive in preserving stability in the area. When debt market tensions reared again in the second half of 2011, the ECB reacted with various measures.

Caleb M Fundanga: Corporate governance and its impact on financial institutions Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Institute of Directors Business Luncheon on Corporate Governance and its Impact on Financial Institutions, Lusaka, 27 April 2011. *  *  *  The Institute of Directors National Vice President Mrs. Sue M. Mwaanza The Chairman Membership and Publicity Committee, Mr. Augustine C. Seyuba Directors and Chief Executive Officers Present Distinguished Invited Guests Members of the Press Ladies and Gentlemen I am honoured to be here today to share with you some thoughts on Corporate Governance and its Impact on Financial Institutions. I am certain that Corporate Governance is not a new topic to all of us in this room. It is obviously of fundamental importance to this audience, given that most of you are company directors. Corporate Governance is critical to the Bank of Zambia, in its capacity as supervisor and regulator of the banking system. Until fairly recently, corporate governance was not a topic that attracted much public attention. It was a topic reserved for discussion in the Board room or in academic environments. However, recent events, such as the Enron scandal and other corporate governance failures including events that led to the recent financial crisis, have made corporate governance a major topical issue. The recent events have highlighted the important role that corporate governance plays in a modern financial sector and the economy at large.