samchain/econo-pairs-v1 huggingface dataset:
11 [17]  given level of demand. However, these growth effects take quite a long time to occur. In the shorter term, the effect is very likely to be that demand and inflation increase. But as I have noted, this may also be positive in the situation we are in today. Beneficial to formalise policy? It is possible that a system in which fiscal policy plays a more active role in macroeconomic policy could benefit from being formalised and the rules clearly laid down. One possibility is for the policy to be conditional on a particular measurable target – that it becomes what economists call state contingent. Until this target is achieved, the budget is run with a deficit.21 Another possibility is to make the policy time contingent. For example, fiscal policy makers could announce their intention to allow the budget to run with a deficit, let us say over a ten-year period, according to a predetermined path – similarly to how monetary policy signals its ambitions with the policy rate. They could also specify what they wish to achieve with this more expansionary fiscal policy. The plan should, of course, be gradually updated and made more detailed.

When inflationary pressures are looming or building up, the Central Bank raises its policy rate in order to make credit more expensive and reduce investment and consumption, encouraging saving at the same time. The policy rate is not applied to achieve other objectives than the inflation target. Thus it is pointless to set other objectives for monetary policy except by abandoning the objective of price stability, which would be particularly imprudent. Steady enhancements have been made to the conduct of monetary policy. Forecasting has strengthened with a new and much more powerful macroeconomic model. A landmark was reached this year when the Bank began publishing its staff’s projection for the policy rate path that is compatible with attaining the inflation target within an acceptable timeframe. Previous interest rate assumptions had proved unsatisfactory and even misleading. Publication of the policy rate path has been welcomed and has facilitated the Central Bank in exerting the impact that it intends to have on market expectations. International agencies and foreign analysts who monitor economic developments in Iceland have praised the Central Bank’s monetary policy implementation, transparency and professionalism. It is interesting to note that these assessments are at odds with widespread attitudes in Iceland at the moment. In the climate that has prevailed recently, the Central Bank’s policy rate hikes have admittedly affected the exchange rate of the króna first, then demand much later. Among the explanations is that policy rate hikes have not had what should have been their normal effect.
Már Guðmundsson: Economic situation and outlook and monetary policy Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at a breakfast meeting of the Iceland Chamber of Commerce, Reykjavík, 5 November 2010. *  *  *  Mr./Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long tradition of holding a breakfast meeting shortly after the Central Bank has published its new macroeconomic and inflation forecast early each winter. This year and last year, the publication of that forecast has coincided with the announcement of the Monetary Policy Committee’s interest rate decision. The Central Bank welcomes this initiative. It is important to be able to explain monetary policy decisions as fully as possible, and this meeting has always been a good opportunity to do so. It is particularly important at this juncture, when monetary policy is formulated under unusually complex circumstances. Effective, forward-looking monetary policy is always complex, of course, as it is formulated under conditions of uncertainty about the current situation and future prospects for the economy. But in our case, three new factors are added to an already complex situation. First of all, there is great uncertainty about the effect of monetary policy measures on the financial markets and the real economy in the wake of the financial crisis.

People in the informal sector and SMEs who hitherto were unable to open savings accounts with banks due to high minimum deposits and service charges should find the “Tusunge” Savings Product attractive. Ladies and Gentlemen, in the face of an ever growing fear of donor fatigue, public deposits and private capital are likely to be the main source of funding for the microfinance industry to achieve the growth required for it to have significant impact on financial inclusion and poverty reduction across the region. Notwithstanding this, allow me now to reflect on some of the key challenges in the financial sector that all of us must strive to address: (i)  Increasing access to financial services by the SME’s who form the backbone of the economy. This sector provides employment for many people who cannot be absorbed into formal employment. However, increased access to financial services remains a key challenge to this segment. (ii)  Although the Bank of Zambia has licensed 25 Microfinance Institutions, most of them operate along the line of rail providing mainly salary-backed loans. There is need for microfinance institutions to support production by providing finance to agriculture and manufacturing instead of merely providing consumption related salary backed loans. (iii)  There is need for all microfinance institutions to utilise the credit reference bureau at all times. A robust credit reporting apparatus will enable the financial sector to share critical customer information that will lead to lowering the credit risk and ultimately lending rates in the financial sector.
In the course of the Review, representatives of the Bank of Russia will hold meetings with business associations, representatives of small, medium-sized and large enterprises, government authorities, the academic and expert community, including professional financial market participants, and citizens from various social and demographic groups. Some of these meetings will take place at the Bank of Russia’s regional branches. Such analysis is conducted by many central banks, in the first place by those having a long experience of inflation targeting. Some central banks carry out such reviews on a regular basis (Canada, Sweden, Norway). The US Fed accomplished its review not so long ago. The ECB completed a similar project in July 2021. As to the Bank of Russia, this is our first experience of such a profound and comprehensive analysis of the achievements of our monetary policy, but we will definitely continue this practice. In the future, the Bank of Russia plans to make 1/3  BIS central bankers' speeches  such reviews regularly, every five years. The range of topics to be reviewed by our analytical units includes six work streams. Work stream 1. Inflation target format. This topic is obviously drawing the greatest attention. Within this work stream, we will consider once again what format of the target would ensure the highest confidence in it and what inflation rate could be the best measure of price stability. Furthermore, we will analyse whether the Russian economy has formed the conditions for reducing the inflation target. Work stream 2. The operational procedure of monetary policy.

The main issue of this block is how effectively the monetary policy pursued achieves its operational objective, which is to keep money market rates close to the key rate. We will also consider whether we need to adjust our operational procedure given the evolution of the Russian financial market. Work stream 3. Retrospective assessment of the effectiveness of the monetary policy pursued. This block of topics is probably the most challenging one technically. Within this work stream, we will try to estimate, relying on our model-based approaches, what results we could have achieved through our monetary policy if we had known what we know now when making our earlier decisions. I would like to stress straight away that we will not assess our actual decisions as they were made when we had less information than today. Nevertheless, this is a very useful practice to analyse the robustness of the monetary policy pursued, which will provide helpful insights for the future. Work stream 4. Communication as a monetary policy instrument. I may say straight away that we have been consistently developing our communication practice throughout the entire period of inflation targeting and continue to improve it now. We are to assess how well the society understands our communication, how predictable our actions are, and what areas of our communication we should prioritise in the future in order to strengthen confidence in the policy pursued. Work stream 5. Monetary policy and financial stability.
For securitization markets, the U.S. Congress as well as regulators are considering changes to ensure incentives are properly aligned and that there is sufficient transparency around the underlying assets. For the housing GSEs, reforms are beginning to be crafted to reach an  BIS Review 40/2010  5  appropriate model, as described in the testimony by U.S. Treasury Department Secretary Geithner earlier this week. For OTC derivatives, financial reform legislation contains provisions to increase the transparency of the market and to clear trades through central counterparties. For the triparty repo market, a task force is considering recommendations to make the market more robust to weather financial strains among its participants. And for money market mutual funds, the U.S. Securities and Exchange Commission has offered a reform proposal to better prepare those institutions for abrupt changes in investor demands. As you can see, the efforts are extensive and affect many different areas. Together, they should be aimed at achieving some common goals. We should have a system in which regulatory arbitrage is not the primary driver of where or how financial activity or innovation takes place. We should have a system in which government support is well defined and is priced correctly. We should have a system in which investors receive adequate, accurate and timely information to make independent judgments about credit risk through the life of a security. And we should have a system that ensures adequate capital and liquidity standards for firms with deep and intertwined linkages to the financial markets.

Jessica Chew Cheng Lian: Financial advisers the future – right here, right now Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia, at the 3rd Annual Conference of the Association of Financial Advisers “Financial advisers the future – right here, right now”, Kuala Lumpur, 31 October 2014. *  *  *  At this Conference last year, I spoke on four key priorities identified by Bank Negara Malaysia (the Bank) to further develop the financial advisory industry and to enable the financial advisers to effectively perform their role. Let me first say that these priorities remain relevant today and our focus has not changed. This morning I would like to share with you how we have moved some of these priorities forward, and the steps that remain in order to further strengthen the financial advisory channel. To recap, the key priorities of the Bank are: •  First, to ensure that financial advisers are highly competent and professional when they provide advice;  •  Second, to identify and address the barriers that are preventing qualified parties from entering the industry, and the constraints that are limiting the ability of financial advisers to recommend the best solutions to their clients;  •  Third, to improve the alignment between the interests of consumers and financial advisers; and  •  Fourth, to intensify our review of the quality of advice provided by financial advisers to consumers through our supervisory work programme.
After a long hiatus, the second wave has led to an even greater development of large, interconnected and complex financial centres. But the markets here and the ecosystem that supports them, the challenges they face and the risks they pose, remain as central to the Bank’s objectives and responsibilities as they have ever done. 11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11  Chart 1 UK current account (% of GDP)  Source: Bank of England. 12  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  12

This is to be made up of myself, the two Deputy Governors, two Executive Directors of the Bank - responsible respectively for the Bank’s economic analysis and the Bank’s financial market operations, and four outside members nominated by the Chancellor and having professional knowledge and experience relevant to the Committee’s functions. It also includes a Treasury observer, who may participate in our discussions, and acts as a link between the fiscal and monetary authorities, but who may not vote on our monetary policy decisions. The overriding purpose of these new arrangements is to improve the credibility of monetary policy, and to demonstrate to the world at large the Government’s commitment to achieving and maintaining effective price stability. But it is important to understand that this objective is not simply an end in itself. The ultimate objective, of course, is growth of output and employment and rising living standards - there is no question about that. The argument is about means, not about ends. And effective price stability as the immediate objective of monetary policy is a necessary condition for growth to be sustained into the medium and longer term. The aim of achieving permanently low inflation is a deliberate attempt to break away from the boom-bust cycles of the post-war years, which led, as we can all remember, to a persistent ratcheting up of inflationary expectations and a steady erosion of long-term thinking and planning, saving and productive investment, on the part of consumers and businesses.
This is unlike various financial crises in the past 25 years or so – which tended to have certain recurring themes, and which tended to begin in emerging economies before their knock-on impact was felt internationally. The analytical tools and policy prescriptions for dealing with such crises became more tried and tested over time, even if applied in too dogmatic a fashion at times. Global institutions, whether it was the IMF, developed nations, or a consortium of strong international banks, had the wherewithal to bring sufficient resources to bear on the problem. Crisis resolution was never easy but did not quite look insurmountable. Not so this time. The epicenter of this crisis is the US – it is the world’s largest economy, holder of the international reserve currency, and home to the largest and most sophisticated financial system. So we are talking about the core of the global financial and economic system where severe problems arose and have since spread across borders. In the US, the “shadow” banking system grew rapidly but was quite opaque in the way it operated. Before long, problems built up and spread to engulf the “traditional” banking sector. Within a short time, commercial banking operations were severely impaired. Right now, we are dealing with the bursting of multiple, overlapping bubbles – the housing bubble, the household credit bubble and the consumption bubble. Cutting across all three bubbles was leverage – households overstretched themselves; the financial institutions which were extending this credit to households were themselves taking on excessive leverage.

Thomas Jordan: Monetary policy and the business cycle Summary of a speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 75th anniversary celebrations of the KOF Swiss Economic Institute, Zurich, 23 September 2013. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Monetary policy contributes to the prosperity of an economy by ensuring price stability in the medium and long term. This makes it possible to put resources to more efficient use, from an economic point of view, and also promotes investment and, with it, long-term growth. Price stability also helps to avoid undesirable distribution effects. Households with lower incomes derive particular benefit from this. Monetary policy can be used to dampen cyclical fluctuations. However, it is not suitable for short-term fine-tuning of the economy. From the point of view of the business cycle, the goal of monetary policy must rather be the reduction of larger risks and the alleviation of extreme situations. An example of one such measure is the minimum exchange rate, which the Swiss National Bank (SNB) set on 6 September 2011 to halt the Swiss franc's upward trend, thus averting a deflationary spiral and warding off the danger of a serious economic crisis. Monetary policy decisions are always subject to uncertainty. It is therefore of key importance that the SNB has a sound decision-making basis.
Among other things, the application of Basel III will entail an increase in the minimum level of core capital, which will rise from 2% to 4.5%, and the creation of a capital conservation buffer of 2.5%. Accordingly, banks must at all times maintain a level of high-quality capital of, at least, 7% of risk-weighted assets. In addition, there will be a countercyclical capital buffer of  BIS central bankers’ speeches  1  up to 2.5%, which for the first time introduces a macroprudential component into the regulation of capital levels, whose ultimate aim is to smooth the fluctuations in credit over the course of the cycle. The new Basel III framework further includes other important additions. These include most notably the introduction of a leverage ratio in which assets will not be risk-weighted and the introduction, for the first time, of liquidity requirements. On one hand, the liquidity coverage ratio will require banks to hold a sufficient volume of liquid assets to withstand scenarios of tension. On the other, the introduction of a net stable funding ratio is envisaged, whose aim is to limit maturity mismatches. The new regulation envisages that these new standards, to which the changes in the definition of capital must be added, will be applied progressively, such that the transition period will finalise in 2019. The aim is to prevent the strengthening of banks’ solvency from being achieved at the expense of a reduction in the financing that banks provide to the economy as a whole.

It is essential that this cooperative approach should be maintained in the future. Otherwise, we would run the risk of seeing the degree of integration of financial systems slip backwards, and that, along with the trade protectionism we have so far managed to avoid, would be a most negative consequence of the crisis. Thank you for your attention. BIS central bankers’ speeches  5
Mian, A and Sufi, M (2014), ‘House of Debt’, ISBN: 978-0226271651. Slovic, P (1987), ‘Perception of risk’, Sciences, New Series, Vol 236 No 4799. Shafik, M (2015), ‘Interpreting the yield curve: pessimism or precaution?, VOX-EU, available at: http://www.voxeu.org/article/interpreting-yield-curve-pessimism-or-precaution. Summers, L (2014), ‘U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound’, Business Economics Vol 49 No 2. Velde, F (2009), ‘The Recession of 1937—A Cautionary Tale’, Federal Reserve Bank of Chicago Economic Perspectives 2009 Q4, available at: https://www.chicagofed.org/publications/economicperspectives/2009/4qtr2009-part2-velde. Weiller, K and Mirowski, P (1990), ‘Rates of interest in 18th century England’, Explorations in Economic History Vol 27 Issue 1. Wolf, M (2014), ‘The Shifts and the Shocks: What we've learned - and have still to learn from the financial crisis’, ISBN: 978-1846146978. BIS central bankers’ speeches  13

Since 15 January, we have repeatedly and thoroughly explained our reasons for discontinuing the minimum exchange rate and introducing negative interest on sight deposits at the SNB. Upholding the minimum exchange rate was no longer sustainable given the changes taking place in the international arena and the sharply diverging monetary policy stances of the world’s major currency blocks. In formulating our monetary policy, we are confronted with an exceptionally complex situation on international financial markets. What is more, the global economy is still grappling with the after-effects of the financial and economic crisis, not least in the form of high levels of uncertainty. These are the realities that the SNB – and the Swiss economy – are facing. Turning a blind eye is not an option. In this environment, we were aware that the discontinuation of the minimum exchange rate would cause Switzerland’s economy to slow. While the data from the first quarter confirm that this slowing process is now underway, the country’s economic development since 15 January has been broadly in line with our expectations. Our monetary policy is geared towards this challenging set of circumstances and is currently guided by our willingness to take an active role in the foreign exchange market and apply negative interest rates. This two-pronged approach is designed to weaken the Swiss franc. The SNB’s interventions in the foreign exchange market, which feed more liquidity into the banking system, reinforce the effect of both of these measures.
As the problems have worsened the recovery that began after the financial crisis in 2008 has ground to a halt, and our assessment in the Monetary Policy Report published in October is that GDP will actually fall in the euro area in 2012. …which is having a major impact on the Swedish economy Sweden is what we usually call a small, open economy. We are highly affected by developments abroad. This high dependence on economic activity abroad has led to considerable fluctuations in production in recent years. The fall in GDP in 2009 was the largest since World War II, but growth in 2010 was the highest for 40 years. The recent weak development of economic activity in the euro area has once again dampened growth prospects in Sweden. An important explanation of why the Swedish economy is affected so much by what happens abroad is that we are highly dependent on the demand for the goods and services that we export to other countries. The euro area is our largest export market and problems in the euro area therefore have a major impact on the demand for Swedish exports. One way for Swedish export companies to reduce this impact is to turn to new markets instead, but this is a very slow process (see Figure 7). The euro area will continue to be easily the largest export market for Sweden for the foreseeable future. Uncertainty abroad affects households and companies in Sweden.

Average mortgage rates for households and bank interest rates for companies on new agreements, and the repo rate Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  11  Figure 11. Inflation expectations of money market agents Annual percentage change 14  14  Inflation expectations CPI  12  12  10  10  8  8  6  6  4  4  2  2  0  0  -2  -2 90  92  94  96  98  00  02  04  06  08  10  12  14  16  Sources: Statistics Sweden and TNS SIFO Prospera  Figure 12. Household debt ratio Percentage of disposable income 225  225 Ireland Spain  200  200  USA Sweden  175  175  150  150  125  125  100  100  75  75  50  50 86  90  94  98  02  06  10  Sources: Eurostat, national central banks and the Riksbank  12  BIS central bankers’ speeches  Figure 13.