samchain/econo-pairs-v1 huggingface dataset:
In this regard let me offer one simple example of how critical the role of the legislature and the media may be: The conventional wisdom is that one important way in which African economies can ensure that they are able to limit long-term damage to their economies is to ensure that they do not indulge in policy reversals for short term gain that sacrifice the longterm growth prospects. Mr. Chairman, policy reversals are more likely to occur in an environment in which information flows and understanding is poor between economic managers such as central bankers on one side and the legislature and the media on the other. Populism can wreak havoc on good economic policy making. In this regard Africa does not need to rehash the false choice of market versus the state – both are part of the fabric of society and the economy. Furthermore, calls have been heard that African Governments should also nationalise banks and purchase car companies as the developed economies, the owners of capitalism, have done. These are ultimately dangerous calls as the nature of our individual economies matters in determining the appropriate remedy for our economic ills. It is for this reason that my address today is entitled “The Central Bank, the Media, and the Legislature: Can they Work Together?” My simple answer is that they can, and that they must – particularly in the unprecedented circumstances in which we find ourselves in today.

Mr. Chairman, before I outline how the Bank of Zambia has engaged both the media and the legislature and the positive results that we believe we have reaped, allow me to state very quickly how a strong relationship between the media, the legislature and the central bank is a modern feature of central banking. Mr Chairman, the role of modern central banks revolves around three key functions: price stability; financial system stability; and the maintenance of the payment system. Price stability has the greatest weight in the goals of most central banks. Advances in economic theory and computing power as well as the developments in financial markets have greatly enhanced our understanding of the economy and our ability to understand and forecast inflation. Central banks act to influence inflation some periods into the future – a period determined by the individual characteristics of the economy in question. Today we understand this process as targeting inflation expectations of households and firms – either implicitly or explicitly. Central to the success of such a strategy is the extent to which central banks have credible monetary policy frameworks and key pillars in such a framework are the ability to communicate policy in a predictable and intelligible way to the public – with the  2  BIS Review 95/2009  media playing an important role in this process – and the notion of accountability to an appropriate body whether this is the Minister of Finance, the legislature or both bodies.
In the past few months, domestic activity has evolved as expected. The stronger external impulse has consolidated, with still favorable financial conditions, trading partners that, on average, are somewhat more dynamic and better terms of trade. Nonetheless, inflation has stayed below the forecasts of the September MP Report. Most of the difference is related to the more volatile items in the basket, as core inflation —which we  measure with the so-called CPIEFE1— is near expected levels. The projections that I will present to you in a moment assume that the convergence of inflation will take somewhat longer than we anticipated in the last MP Report. This considers the effect of the recent surprises and the evolution of the exchange rate up to the Report’s statistical cutoff. It also assumes that activity growth will gradually speed up its pace, from its bounded present levels to above potential in the second half of 2018, yielding the way to close the output gap that will help inflation to converge within the projection horizon. In any case, there are still significant risks surrounding the baseline scenario depicted in this MP Report. On the one hand, some sectors still lag behind in the recovery process, especially some relating to investment. On the other hand, a scenario in which the economy does not return to higher growth rates in the coming months, can affect the recovery of growth in the medium term.

A long upturn followed from 1992 to 2008. National income rose by an annual rate of 5.4 per cent in this period, far higher than the rate of output growth in the mainland economy. Income growth was even higher than in the post-war period in the 1950s and 1960s. BIS Review 44/2010  1  Major structural reforms Behind these favourable developments were the major structural reforms of the 1980s and 1990s that resulted in an expanded production capacity in the Norwegian economy. Capital and credit markets were liberalised. It became easier to establish and build up new businesses. The EEA and WTO agreements resulted in stronger competition and increased flows of goods and services, labour and capital. As a result of the 1992 tax reform, the welfare state could be funded with reduced impact on wealth creation. The framework conditions for the electricity market, telecom market, aviation and broadcasting were changed. Trade was liberalised. State-owned companies were listed on the stock exchange and new forms of managing public agencies were developed. Industrial policy no longer kept unprofitable enterprises afloat. Subsequently, the business sector experienced a long period of high productivity growth. Moreover, shifting forces have driven the economy. In the wake of the crisis around 1990, labour costs decreased to a low level compared with Norway’s trading partners and wage settlements were moderate. In 1995, the cost level was 10 to 12 per cent below Norway’s average for the oil age from 1970 until now.
2.3  Strengthening of regulatory and supervisory framework  The design of strong and appropriate rules and their rigorous monitoring constitutes a guarantee for the preservation of financial stability. The Bank of Albania has been active in improving the regulatory framework, consolidating it further in compliance with the legal provisions and the Basel Committee principles, the European Council directives and the best practices in the area of regulation and supervision of financial institutions licensed by the Bank of Albania. The main objective was the harmonization of the best practices in:   strengthening internal control;    improving banking institutions’ governance;    strengthening the risk management capacities; and    increasing the level of banks’ transparency to the public. With respect to the latter, the Bank of Albania has required higher and improved communication of the banking system with the public about the products and services being provided, the promotional campaigns for new products and the provision of information on their real financial situation and risk profile. BIS Review 78/2010  7  3. Other Bank of Albania activities  After the analysis of the two key functions of the Bank of Albania, I would like to elaborate on some other aspects of the central bank’s work. 3.1  Payments’ system  The payments’ system reflected security and efficiency in 2009. On average, 225 transactions a day were processed and settled in the AIPS system, with an average daily value of ALL 19 billion.

3  European Union enlargement  At first glance, the link between this topic and the two issues I have been dealing with up to now appears quite tenuous. Yet, while the issues arising from market integration and financial stability are of concern for many Central Banks, managing the EU enlargement is a distinctive concern of the Eurosystem. I would like to share views on how the Eurosystem will act to address this concern, while performing their task regarding price and financial stability. Ten countries from Central, Eastern and Southern Europe –comprising 75 million inhabitants – are to join the EU, thus completing European reunification. Although their combined GDP is rather small (equivalent to that of the Netherlands for instance), in terms of population' size they will propel the EU (450 millions inhabitants) largely ahead of the combined population of both the US (population: 275 millions) and Russia (population: 145 millions). This testifies again, if need be, to the attractiveness of the European Union framework, which has provided us with economic prosperity and political stability for almost half a century. Accession countries have accomplished important progress in stabilizing and strengthening their economies and their institutions. Observing the accession countries, recent history shows the major improvements those countries have made, in hardly 10 years, on the road towards convergence with the EU. Let us keep in mind, the sometimes rather slow pace the current Member States took, regarding for example trade openness, price liberalisation, or macro economic discipline.
In addition, integration in the stock markets is progressing, although they have to overcome barriers of the same kind as those I have just mentioned. In addition to the closer links between stock market firms, a notable increase in transactions on the new European indexes has been observed. Moreover, the “new markets”, with growth figures benefiting greatly from the establishment of the large European market, have expanded considerably. The broadening of the capital markets and their greater integration are contributing to a more efficient allocation of savings. First, this development is also leading to lower transaction costs and increasing the liquidity of the traded instruments (which in turn contributes, ceteris paribus, to reducing the absolute level of interest rates). Second, it is multiplying investment opportunities and increasing the range on offer. At the same time, it is fuelling competition between issuers, investors, and even, to some extent, regulatory systems (as shown, for example, by the adoption in several countries, including France, of a legal framework for real estate bonds, modelled on the German Pfandbriefe). Meanwhile, the deeper market calls for restructuring and rationalisation of the finance industry, the effect of which would be to strengthen the management of savings in Europe.

In the same way, the remuneration of fixed rate debt securities such as bonds only includes expected inflation and is thus vulnerable to any unexpected change in inflation. It has been empirically established that, as intuition suggests, the volatility of inflation increases as it rises, which implies that risk premia are generally not in line with the real level of inflation. I should add that inflation creates a well known fiscal bias when flows of interest to creditors include an inflation premium to cover the depreciation in the value of financial capital during a period of inflation, and this premium, which is not real income, is charged. 1  BIS Review 6/2000  In fact, in a situation where inflation rises unexpectedly a transfer of wealth occurs from the creditors to the debtors. This interferes with the optimal allocation of savings (I shall return to this issue) when the transfers of wealth do not correspond to the provision of a service or a real economic cost, but have all the characteristics of a “windfall profit” or an exceptional loss. It can also result in a reduction in the amount of savings in two ways: by discouraging agents’ propensity to save amounts subject to the monetary hazard; and (because of the bias resulting from the depreciation in the nominal value of debt and the fiscal distortion to which I referred) by transferring inflationary income from the private to the public sector, which has a lower saving ratio.
There is generally a tendency towards concentration in infrastructure provision because of increasing returns to scale in a fixed cost business and often powerful network effects. This applies equally in the case of commercial bank provision of infrastructure: ECB survey evidence reveals that the ten largest correspondent banks in euro account for around 80% of correspondent banking payment values; and the top-4 global custodians now account for three-quarters of total assets in custody. Indeed, regulators have been giving increasing attention to the potential systemic spillovers from operational or business failures at major commercial bank providers of infrastructural services. That has led, for example, to the initiative in the US to implement “New Bank”, a dormant shell company to take over the functions should one of the two major clearers in the US Treasury market cease operations. 34 It may be that a competitive environment can be sustained, particularly as the cost of technology falls, lowering barriers to entry, and liquidity bridges and other forms of interoperability are established between systems. But, the jury is still out. Recent evidence on the trading side, particularly in the US, is mixed: some trading platforms, such as Archipelago and INET, have been swallowed up by the incumbent exchanges; others, such as BATS Trading are thriving, keeping the pressure on the exchanges to cut costs and upgrade their services. 35 I suspect what we are seeing is a redefinition of the market on an international scale.

Nigel Jenkinson: New markets and new demands – challenges for central banks in the wholesale market infrastructure Speech by Mr Nigel Jenkinson, Executive Director, Financial Stability, Bank of England, at a joint Bank of England/European Central Bank Conference on “Payments and Monetary and Financial Stability”, Frankfurt am Main, 12 November 2007. I am very grateful to Mark Manning for his help in preparing this speech and to John Gieve, Victoria Cleland and Ben Norman for helpful comments. * 1. *  *  Introduction  1 Central banks sit at the heart of the monetary economy providing the ultimate settlement asset and typically operating the large-value payment systems that underpin financial activity. The modern central bank’s twin objectives of monetary and financial stability emerged from their early role in settling claims between banks. 2 But this traditional payments function is subject to the same forces for change that are transforming the rest of the economy. In particular, developments in technology, the financial innovation they allow, and the globalisation of finance are reshaping the landscape, exposing new sources of risk and posing fresh challenges for regulators and central banks. 3 As markets become more interconnected and international, national authorities have to work more closely together, cooperating in their oversight and operational activities and coordinating their risk assessments. As new products and players emerge in the commercial sector, they may also need to adapt the scope of their oversight and regulatory response.
As will be explained in the analysis, my assessment is that the evidence shows that our package of monetary policy measures has been an effective response to the environment that the ECB has faced in recent years. Furthermore, the effectiveness of the policy toolkit means that we can add further monetary accommodation if it is required to deliver our objective. Finally, especially when inflation deviates from its objective for an extended period, central banks ‒ including the ECB ‒ should adopt clear communication strategies that leave no doubt about their absolute commitment to meeting the inflation objective over the medium term. The ECB’s instruments and tools Excellent accounts of the history of ECB monetary policy are provided by Hutchinson and Smets (2017), Hartmann and Smets (2019) and Rostagno et al. (forthcoming). As a summary device, Chart 1 shows some key interest rates and developments in excess liquidity in recent years. The chart underlines the primary role of the deposit facility rate – which has been in negative territory since 2014 – in anchoring the key EONIA market interest rate in a world in which the money market operates in conditions of excess liquidity. From mid-2014 onwards, net liquidity provision from refinancing operations and asset purchases has markedly increased. In part, this expansion of liquidity provision depended on banks choosing to take up funding support in refinancing operations, especially conventional longer-term refinancing operations (LTROs) and, more recently, targeted LTROs (TLTROs). However, the expansion during 2014–18 was dominated by our asset purchase programme (APP).

Ladies and gentlemen, On the 8th of May this year, only 15 days ago, Macedonia had the honor to represent its first preaccession economic program at the ministerial dialog between the ministries of economy and finance of the EU and the candidate countries in Brussels. The adopted conclusions that refer to our country, amongst other things, state that "generally, the document suffers from a lack of reliable statistics, impeding the analyses of the position of the country regarding the growth cycle...", which, you would all agree, has to do with the reliability, in such situation, with inflation calculations, particularly of the expected one. Furthermore, page 4 says that "in the area of economic statistics, top priority for Macedonia is to establish a capacity for regular production and submission of annual and sub-annual statistics", but, also, not failing to notice that "a certain progress has been made in the annual national accounts, following the ESA 95 concepts", and that we should move on in that area.
For instance, a seemingly credible threat by one party to take actions that lead to mutual disadvantage can prompt concessions from the other, (or not). A former American President, 1/3  BIS central bankers' speeches  Richard Nixon, called this his “mad man” theory when applying it to the war in Vietnam and there are echoes of this idea in current international trade disputes. Such behaviour undermines multilateralism which has been an important source of stability and growth over many decades. If strategic uncertainty is a source of unilateral advantage, it will not dissipate but remain a source of latent policy risk. Last, “Structural change and monetary policy” uncertainty There are fundamental structural changes occurring, notably in the euro area economy but also elsewhere, that are poorly understood. The ongoing demographic transition, for example, is changing employment, investment and saving decisions, which will probably lower the natural rate of interest. The monetary policy transmission mechanism also seems to be changing. A sustained period of accommodative monetary policy has boosted growth and employment and is finally showing up in nominal wage growth: this first part of the Phillips curve is at work. But higher nominal wages have not yet been passed through to core inflation. It should eventually, but the more pertinent issues – of when and by how much – are unclear. There is, thus, not a single mechanical relationship between monetary policy instruments and inflation, rather a distribution of likely responses.

My understanding of the present debates leads me to the following four pragmatic suggestions that I hope can stimulate your discussions: 1. Remain very clear about your objectives – uncertain times are not the right ones to create additional doubts about, say, your inflation target – and about your capacity and determination to use your tools in a predicable sequence. 2. But, whilst being consistent with your guidance, be very flexible in the precise calendar and calibration of your implementation. In short, be as predictable as possible, but never be precommitted. 3. Act to prevent the worst outcomes occurring but without supplying complete insurance, which would create moral hazard. 4. Never base policy on only one expected path for the economy. In conclusion, we cannot seek to control, or avoid, uncertainty; instead we must implement strategies that are the most robust to it. The French philosopher Edgar Morin put it nicely: “La connaissance progresse en intégrant l’incertitude, non en l’exorcisant” – “knowledge advances by integrating uncertainty, not by exorcising it”. With that in mind, let me wish you all a very productive symposium with lively and enlightening exchanges of views. Christine, the floor is yours. 3/3  BIS central bankers' speeches
That deterioration followed the failure of Lehman Brothers, which triggered the most severe banking crisis for almost a century. Confidence in the very essence of banking – as well as in individual financial institutions – was shaken to its core and measures of financial market risk and uncertainty ballooned. The resulting contraction in the supply of credit has had a significant impact on the ability of households and companies to borrow and spend. But the nature of the downturn over the past six months cannot be explained solely in terms of the direct effects of the collapse of Lehman Brothers on the supply of credit. The impact of changes in credit conditions on investment and consumption decisions tends to be gradual, as existing loans mature and new contracts are negotiated. This contrasts with the dramatic pace at which economic activity and sentiment turned during the final quarter of last year. BIS Review 46/2009  1  Output, orders and investment all fell precipitously in a matter of months. Moreover, the downturn in economic activity was seemingly indiscriminate. Output in virtually every corner of the world fell sharply, irrespective of a country’s exposure to sub-prime loans, the state of its banking system, or its level of indebtedness. The effects of the shock were also felt far beyond its epicentre in the financial sector. Manufacturing output has been particularly hard hit, with UK manufacturing output estimated to have fallen by 4.9% in the fourth quarter of last year; the largest quarterly fall for over thirty years.

Jean-Pierre Roth: Role of the central banks with respect to the financial market crisis Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Forum Suisse de Politique internationale, Geneva, 23 May 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The central banks have been working extremely hard to respond appropriately to the turmoil that has beset the financial markets in recent months. Aimed at enhancing the resilience of the markets and safeguarding the stability of the financial system, the measures they have taken have been drastic and innovative at times. As this episode has also shown, a policy of preserving financial stability is not always easy to reconcile with monetary policy. The central banks must therefore tread carefully and avoid compromising their price stability objectives when intervening to defend financial stability. While money market conditions deteriorated over the past nine months, the Swiss National Bank put off interest rate hikes so as not to provoke a tightening of credit conditions in Switzerland. Effective action by banking supervisory authorities is key to ensuring long-term financial stability. However, the central banks also have a role to play in reinforcing the markets during times of need.