samchain/econo-pairs-v1 huggingface dataset:
Long-term fixed-rate financing is far less common in Norway than in Denmark, for instance for financing dwellings. As a result, interest rate changes have a greater impact in the relatively short term. However, the strong impact of the interest rate also places constraints on its use to underpin the exchange rate. The situation in Denmark, with its well-developed bond market, is somewhat different, since here the short-term interest rate has rather less pronounced effects on the real economy and prices, and can therefore be used to a greater extent to underpin the exchange rate. Consequently, a monetary policy strategy in which interventions are used to influence the exchange rate will have greater credibility, and the risk of ending up in game situations with the market is smaller than in Norway. Norges Bank does not intend to act in a way that will prompt game situations. The bank may nevertheless use interventions to a limited degree if the exchange rate moves significantly out of line with what we consider to be reasonable on the basis of fundamentals or in the event of exceptional short-term volatility in thin markets. In such circumstances, there is less risk of ending up in a game situation against exchange market operators. We have also experienced game situations in which one or more major operators were behind the krone exchange rate fluctuations at the same time as they took speculative positions in the bond market in the expectation that Norges Bank would raise its key interest rate to defend the krone.

This is a small change, well within normal variations from one year to the next. Government revenues - and thus the budget surplus - would increase by almost 1% of Norway’s annual GDP. If the increase in petroleum revenues is used in Norway, it corresponds to almost half of the annual growth in the non-oil economy in a normal year. If the private sector of the economy is also expanding, and the economy is already close to capacity, this policy would swiftly lead to strong pressures on the resources in the economy. This would result in a rise in wages and prices, and would also lead to unstable conditions in the foreign exchange market. The Government Petroleum Fund shall serve as a buffer against short-term fluctuations in oil revenues. As large portions of the revenues from oil activities accrue to the state, fluctuations in oil prices and oil revenues will primarily result in changes in allocations to the Petroleum Fund. Since all of the capital in the Petroleum Fund is invested abroad, such changes will in principle not influence  1 2  See Auerbach et al (1993). See Report to the Storting No 1 (2000-01), the National Budget for 2001. BIS Review 105/2000  4  the level of activity in the economy. This makes the Norwegian economy more robust to fluctuations in oil prices and thus less dependent on oil, even in the short run. Some of the petroleum revenues are therefore used to finance central government budget expenditure.
Basel III has changed that. So even though the LCR is “only 30 days of cash”, its significance should not be underestimated. As you would be aware, the focus of the Committee over the past two years has been on refining the formulation of the LCR announced in 2010. Given this is the first time the international community had developed a global liquidity standard, it was agreed that it should be subject to an observation period, during which it could be adjusted as a result of further analysis and assessment. The aim of the observation process was not to further tighten or weaken the standard: the goal was purely to ensure the calibration was more reflective of empirical evidence and appropriate for implementation as a minimum standard, across the Committee’s 27 member countries and more broadly. The changes agreed to by the Committee focus on three main areas: •  High quality liquid assets (HQLA): A diverse and sufficiently large stock of HQLA is essential to help banks withstand liquidity stress. The revised definition now provides limited recognition of additional assets such as a broader range of corporate bonds, a selection of listed equities, and some highly-rated residential  2  BIS central bankers’ speeches  mortgage backed securities (RMBS). Recognising the greater price volatility associated with such assets, their inclusion in the stock of HQLA is subject to a relatively low limit as well as significant “haircuts”.

The share of GDP in quarantined areas has moved from 11% to 52% in the same period. Page 1 of 3  Central Bank of Chile June 2020  11. This has intensified the impact on economic activity. GDP growth remained in positive ground in the first quarter, but economic activity declined 3.5% in March and 14.1% in April. Figures are likely to be worse for May and June in line with the broadening of lockdowns. Central Bank estimates from last week set the contraction of GDP between -5.5% and -7.5% in 2020, with the range broadened to take into account uncertainty around the persistence of constraints. 12. Assuming that constraints will begin to roll back in the third quarter, we estimate GDP to grow between 4.75% to 6.25% in 2021, and 3%-4% in 2022. 13. While the drop in GDP in 2020 will be the deepest in 35 years, prospects remain better than in other Latin American and Caribbean (LAC) countries. This owes to five factors: a. Structural factors are more favorable than in other EMEs. Chile has a deeper domestic financial market, where institutional investors play a major role; remittances have never been a source of foreign revenue, and the composition of foreign trade means that the terms of trade are improving rather than worsening. Even the informal sector, while bigger than in advanced economies (AE), at 30% of the labor force is smaller than it is in other LAC countries. b.
In particular, they allow one to assess whether a forecast turned out to be accurate because of luck or because of some mechanism articulated in advance. This is critical to learning in a complex environment where feedback may be ambiguous or hidden. Without active assessment and reassessment, we're prone to hindsight bias and the belief that we will surely see it coming next time. In the post-mortem I wrote about the failure to forecast the Great Recession, the focus was on the phenomenon and links that we failed to see or were to slow to realize the power of.17 There was nothing on the debate about whether the signal from the yield curve was misleading due to low term premia because ex-post, given the depth of the Great Recession, this debate seems a little silly. So then the question we should be asking ourselves is how could we have arrived at a clearer focus on the relevant forces before the Great Recession? What structures, processes, and behaviors should be in place to help us question our assumptions? Institutionalizing such practices thus remains an essential challenge for our ability to monitor and forecast economic and financial conditions, and to explain their possible implications to policymakers. I'd therefore like to return to the investments we've made at the New York Fed through the Applied Critical Thinking (ACT) Function, led by my colleague Meg McConnell.

And I am fairly certain that this is to a great extent due to the fact that we have purposefully worked to attain greater openness and clarity. This provides prerequisites for evaluation, accountability and thus creates legitimacy. All of these factors have contributed to winning confidence in our monetary policy. But the process does not stop here. It is not possible to "rest on one’s laurels” when one works with monetary policy. No, we must keep on adapting to new requirements; we must develop and refine our methods. One expression of this is that we have recently made several changes to become clearer and more efficient in our communication. The fact that we always have these ambitions is something that the general public and our principal, the Riksdag, as well as agents in the financial markets can demand of us. Thank you! BIS Review 62/2007  7
The euro area faces a complex macroeconomic scenario, marked by an outlook of moderate growth and very low inflation, recently compounded by uncertainties such as those arising from the assimilation of migrant flows and the referendum on the United Kingdom’s continued membership of the EU. The ECB’s monetary policy is providing considerable stimulus through the easing of financing conditions, but it is necessary for other policies to accompany monetary policy if we wish to anchor the recovery and improve the medium-term outlook. In this respect, the fiscal policy of the member countries and of the EU as a whole should use the room for manoeuvre allowed under the Stability and Growth Pact to promote activity and, in parallel, the structural reforms aimed at improving our economies’ potential should be deepened. Turning to the Spanish economy, it has in the past three years moved back onto a path of economic growth, showing greater dynamism than in most of the EU countries. But it has not managed to overcome the imbalances I talked about earlier to the extent necessary. 4  BIS central bankers’ speeches  Spain still has an unemployment rate of over 20% and a very high proportion of very longterm employment; we have financing maturities arising from our external debt that each year exceed 45% of our GDP; and our long-term demographic outlook threatens the sustainability of our public pension system.

In our case, total productivity – the variable that seeks to approximate the level of efficiency of the economy and which depends, among other factors, on the effects of technological improvements and on the efficiency of the institutions and the regulations in place within an economy – worsened significantly during the years of expansion prior to the crisis, posting slightly negative rates as from 2000. Despite some improvement as from 2008, linked to the disappearance of unproductive firms, Spain continues to post significantly lower productivity growth than the average for the developed economies. There are simplistic analyses that would seek to explain these developments by resorting to singular and even anecdotal macroeconomic aspects; but the factors that appear to lie behind our mediocre productivity performance are varied and complex. Apart from the fact that Spain has significantly lower levels of technological capital than other developed countries, factors are often cited such as the high costs and administrative obstacles facing business start-ups, the low level of competition in certain sectors and the small size of our companies. Low productivity can also be related to some of the labour market aspects I referred to earlier, such as the disconnection between remuneration conditions and the specific situation of each firm, and labour market duality, which hamper the reallocation of resources across companies and human capital accumulation decisions. Conclusions To conclude, allow me first to refer to the situation of the euro area, and then to the Spanish economy, on the road to recovery from the crisis.
The regulatory community and the industry must act to ensure that supervisory practices and internal controls within the financial institution remain vigilant and install the necessary safeguards against cyber security threats. There is a need to intensify our efforts in this regard and to place cyber security issues as a priority in our effort to make the financial system safe and sound. Driving the cyber security agenda forward in the industry In many countries, supervisors place significant emphasis on the oversight role of the boards of financial institutions as a primary line of defence. However, in reality, the focus on technology risk remains superficial in most board discussions. In 2012, a survey by Carnegie Mellon among senior executives and directors from among the world’s largest firms across various sectors indicated that, 57% of respondents viewed that boards are not reviewing the existing policies for cyber-related risks sufficiently. Faced with a multitude of issues, board members are likely to prioritise headline issues that are more pressing or more directly related to the core business of the financial institution. More often than not, the cyber security agenda gets side-lined. Supervisors have an important role in encouraging boards to strengthen their oversight over cyber security risks. In fact, because of its importance, a mandatory requirement ought to be the norm. In the digital era, cyber security demands a more strategic and specific focus and should be properly understood at all levels within the financial institution.

The launch of the ABF Malaysian Bond Index Fund today marks another important milestone resulting from EMEAP Central Bank cooperation in the region. It represents the successful implementation of the Asian Bond Fund project to accelerate the development of the domestic bond market and to promote greater integration among the regional bond markets. The listing of the ABF Malaysian Bond Index Fund is thus another major step forward in the development of the Malaysian bond market, and to enhance further its potential to contribute to sustained and balanced growth of our economy. The bond Exchange Traded Fund is an investment instrument with a low entry cost. It is a highly efficient, transparent and convenient investment tool designed to appeal not only to institutional but also retail investors. With an affordable standard lot size, the bond Exchange Trade Fund provides an avenue for retail investors to have access to the bond market. It thus offers investors an additional investment alternative as well as an opportunity to diversify their investment into more asset classes. The ABF Malaysian Bond Index Fund comprises investments in Government and Quasi Government securities and tracks an index, which by design is replicable and transparent. The listing of the ABF Malaysian Bond Index Fund today will not only add to the diversity of listings on Bursa Malaysia but would also pave the way for the increased introduction of other more innovative products in the future.
On the contrary: The response to Iceland’s crisis was characterised by ring-fencing and hostility, yet it is well known that such an approach creates a worse outcome in the aggregate. Iceland’s rescue efforts focused on keeping payment intermediation and domestic banking operations up and running to the extent possible, and then on rebuilding the financial system and the economy on new foundations. As is described in this report, attempts to keep domestic payment intermediation functioning were broadly successful under the circumstances. This is due in large part to attempts made over the past several years to improve the efficiency and security of payment intermediation, in line with international standards. Cross-border payment intermediation was disrupted when the banks fell, however, partly because of the actions taken by the British authorities. But a variety of measures described in some detail in this report restored the functioning of cross-border payment intermediation, which is largely back to normal as of this writing. Rebuilding the domestic banking system is part of the economic programme prepared by the Government in collaboration with the International Monetary Fund (IMF). The restructuring of the three commercial banks is well advanced. The savings banks’ restructuring is still incomplete, and it remains unclear how large a capital injection will be required from the Treasury. The cost of recapitalising the commercial banks will be much less than originally assumed, however. Although the banks’ restructuring is proceeding apace, there is still considerable work to be done before the long-term structure of the new Icelandic financial system is complete.

Once deposit interest rates began to vary with market rates, the demands for M1 and M2 - the primary guides to monetary policy - became unstable. So, by the early 1980s, the Fed had de-emphasized M1. And by the mid-1980s, M2 had met the same fate. In the 1990s, we continued to establish annual ranges for these aggregates, as we were required to do by law, but they played almost no role in our deliberations. The legal requirement to set ranges expired this year, and in late June we decided to stop setting ranges. This step was taken with some reluctance, because using interest rates as the main policy tool does pose well-known dangers. But in the absence of reliable monetary aggregates, the Fed has operated reasonably well in an environment of significant ongoing financial deregulation and sizable financial shocks. Let me give you some examples. In terms of deregulation, barriers to interstate banking were eliminated, and recently a new financial modernization law allowed depositories to expand into activities like insurance and investment banking. In terms of shocks, we dealt first with the so-called credit crunch in the late 1980s - which was due in part to the collapse of many savings and loans - then with the turmoil set off by the Asian currency crisis in 1997-98, and finally with the unexpected runup in equity values in the second half of 1990s.
Jaime Caruana: 60 years after Bretton Woods - a central banker’s view Opening remarks by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Conference “Dollars, Debt and Deficits - 60 years after Bretton Woods”, Bank of Spain, Madrid, 10 June 2004. *  *  *  Mr Managing Director of the IMF, Mr Second Vice-President of the Government and Minister of Economy and Finance, ladies and gentlemen: It is a pleasure for me to welcome you all to the Banco de España and to the inauguration of this conference, which is jointly organised by the International Monetary Fund and the Banco de España in commemoration of the 60th Anniversary of the Bretton Woods Agreements. For our country, which previously hosted the annual meetings of the Fund and the World Bank on the occasion of the 50th anniversary of these agreements, in autumn 1994, it is a source of satisfaction that this meeting should be held ten years later in Spain. I am also particularly pleased to welcome our distinguished audience - both from Spain and abroad - of representatives from official institutions, from academia and the private sector, who are going to participate in the busy sessions scheduled over the next two days. The Banco de España and the International Monetary Fund are tied by long-standing and deep-rooted links.

The euro area has to act together, exerting some pressure on the IMF, which last year adopted a resolution to effectively strengthen its surveillance of currency markets. Lastly, regarding energy issues, it is necessary that developed countries, including Europe, put a stronger emphasis on energy savings and climate change. The experience accumulated in recent years has confirmed that although energy saving measures can slow down growth in the short term, costs connected to energy waste can be much greater in the long run. I will now close with the fourth line of action, which is linked to the previous one, though being on a more national scale. The ability of a European country to become part of the globalisation process depends not only on EU-wide initiatives but also on internal measures aimed at supporting economic growth. In essence, there are only two ways of absorbing the shock deriving from price increases in raw materials and to prevent it from becoming a reduction in purchasing power. The first way is to increase productivity in order to allow wages to grow in a non-inflationary manner. The second is the reduction in the price of items other than energy and food. Of course, these are not easy ways, but they are the only ones which can allow European economies to grow while preserving the purchasing power of its citizens, even in the presence of a worsening in the terms of trade.
Available evidence tends to favour the latter interpretation: the sensitivity of inflation expectations has increased more at shorter maturities, which is indicative of agents expecting that it will take longer for the central bank to bring inflation back to levels consistent with its objective; at very long maturities, by contrast, the increase in sensitivity was contained, which may reveal that agents have never quite lost faith in the intention of the central bank to respect its mandate. This evidence has crucial implications for monetary policy: many forces have combined to bring strong downward pressures to bear on the euro area economy and are slowing down the return of inflation to levels closer to our objective. But, importantly, these disinflationary forces are not beyond the remit of monetary policy. And it is precisely these underlying drivers behind trend inflation in recent years – rather than transient price dynamics with no implications for the medium-term inflation outlook – that have triggered the comprehensive package of monetary policy measures we have adopted since mid-2014. Maintaining price stability over the medium term Headline inflation had started its decline already in late 2011, and has been falling short of the ECB’s price stability objective – a medium-term inflation rate below, but close to 2% – since early 2013. Initially, in line with the strategic prescription of avoiding an over-reaction to short-term factors driving inflation, the ECB looked through short-term developments.

Figure 4 GDP  Non-natural resources GDP  (annual change, percent)  (annual change, percent)  8  8  8  Construction  6  6  6  Wholesale and retail trade  4  4  4  2  2  2  0  0  0  4  Rest  2  Personal services  8 6  Total 0  Manufacturing  -2 -2  -2 -4 14  15  Natural Resources 16  -2  Business services -4 -4  -4  14  15  16  Source: Central Bank of Chile. 3  7. On the expenditure side, domestic demand—excluding changes in inventories—also tended to decelerate throughout last year. Weakness was most evident in investment in construction and other works, which contracted by 4.9% in annual terms during the fourth quarter (average growth of 0.5% between the first and third quarters). 8. Private consumption, in line with its behavior in previous years, provided support to the economy, growing by more than 2% annually throughout 2016, on the basis of wage growth and a low unemployment. However, it should be noted that while consumption of nondurables and services has remained relatively stable, durable goods have recovered, partly due to the appreciation of the peso during the last year and the necessary replenishment of inventories following several years of weak growth and even contraction. Something similar is observed with gross fixed capital formation in machinery and equipment.