samchain/econo-pairs-v1 huggingface dataset:
I am sure you have been following very closely the upward trend in inflation observed since the turn of the year. Annual inflation became 10.12 percent in June 2006, exceeding the upper limit of the uncertainty band of the inflation path consistent with the end-year inflation target and this upward trend continued in July with 11.69 percent. The factors that played a primary role in the upward move in inflation in the first seven months of the year were seasonal factors and external developments. Prices of unprocessed food products started to increase due to adverse weather conditions by the last few months of 2005 and inflation in this group reached 21.8 percent by July 2006. Another factor that had an unfavorable impact on inflation was the rise in crude oil and energy prices. Parallel to the rise in crude oil prices that started in international markets in March, energy prices started to climb as of the first quarter also in Turkey and continued due to the rise in exchange rates as of May. The contribution of these increases to July inflation was 0.30 percentage points. Owing to the fluctuations in international markets and depreciation of the Turkish lira in the May-June period, prices of gold increased by 72.6 percent annually as of July and had a negative impact on consumer prices in the first seven months of year.

In this framework, the relationship between the real sector and the financial sector should be reinforced in order to provide the private sector with the financing required for creating employment, the investment environment should be improved, permanent stability should be established in the macroeconomic environment and the capacity of growth to create employment should be enhanced. Furthermore, training policies should be implemented in order to increase the qualified labor force that would meet the labor demand, employment taxes and other burdens on employment should be reduced gradually in order to register the unregistered employment, and regional markets should be formed for the unqualified labor force created by the contraction in the agricultural sector. In this scope, the framework drawn up by the Ninth Development Plan in consistence with the European Union Employment Strategy is a road map for what should be done. In the last part of my speech, I would like to say a few words about the issue of current account deficit, which has frequently been discussed in recent years, and highlight certain points I consider to be significant about Turkey’s current account deficit. As you all follow closely, the current account deficit has widened rapidly in recent years as a consequence of the high growth performance observed since 2001. The current account deficit, which was USD 23.2 billion in 2005, rose to USD 28.7 billion by June 2006 in annual terms.
It is true that some economists have argued that the negative relationship does not apply when institutional factors in the countries included in the study are taken into account. Venezuela is one of the poorest performing countries in the Sachs and Warner study. The country has the largest known oil reserves in the world, and also has an abundance of other natural resources. Venezuela has been among the largest oil producers since the 1920s. But as a result of an unsound economic policy, the country has not been able to achieve solid and stable economic growth. After the rise in oil prices in the 1970s, government spending increased sharply. In the 1980s, fiscal policy was also highly expansionary. The result was high inflation and rising unemployment. Close to 85 per cent of the country’s population is living in poverty. Economic growth has been weak. Between 1970 and 2002, GDP per capita has fallen by about 20 per cent. Why have many countries failed to make good use of windfalls? There may be a number of reasons. In terms of economic policy, an explanation is that the wealth deriving from the resources leads to an extreme focus on acquiring as much of this extra wealth by various groups. The contest for this profit is often referred to as “rent-seeking behaviour”. Countries with an abundance of natural resources may be more vulnerable to extreme “rent-seeking behaviour” than economies with a limited supply of natural resources.

On this front, Thailand has done remarkably well, registering a substantial increase in net inflow of foreign direct investment in the four years following the crisis despite the overall net capital outflow due to debt repayment within the banking sector. Foreign direct investment (to the non-bank sector) increased from an average around 1.4 billion US dollars during 1992-1996 to 3.4 billion US dollars during 1997-2000. Though much work is required on the corporate sector in the march toward modernization of the Thai economy, the government and the central bank also have vital roles in maintaining stable economic environment and providing the required infrastructures to allow the private sector to drive forward to create wealth and prosperity. Several long-term plans have been made in the past couple years. On the macroeconomic front, the Bank of Thailand has adopted Inflation Targeting as a framework of our monetary policy since May 2000. It may be a little too early to claim our success, but the results thus far have been encouraging. Long-term interest rates of the interpolated 14-year government bonds were reduced from 8.3 percent at the beginning of 2000 to currently at 6.1 percent. Inflation remained subdued and will stay within the target range during the next two years. The maturity of state enterprise debentures offered in the market increased from a maximum of 7-year in 1998 up to 20 years in 2000, reflecting greater confidence on the long-term economic stability.
After 1945, with the introduction of the Bretton Woods system, a number of countries’ currencies were pegged to the US dollar, which was in turn pegged to gold until 1971. In many ways, US monetary policy and nominal interest rate levels functioned as a nominal anchor, and to a large extent governed global interest rates and inflation developments. Inflation has been particularly high in times of war. The 1970s and 1980s were characterised by fairly high inflation following the collapse of the Bretton Woods agreement, the oil price shocks and countercyclical policy. From the end of the 1980s, an inflation target for monetary policy has functioned as a credible nominal anchor in a number of countries, curbing the pace of inflation. To calculate historical real interest rates, an estimate must be made of expected inflation. Figures for actual inflation are normally used. Inflation expectations may deviate from actual inflation, especially in periods when the latter is subject to considerable fluctuation. From 1870 to today, developments in global real interest rates can be roughly divided into 5 periods. In the period 1870 – 1896, the real interest rate ranged between 4 and 5 per cent, and inflation fluctuated around zero. No new major gold finds were made in this period and the economy in general was exhibiting brisk growth. The real interest rate fell to about 1-3 per cent in the period 1897 -1913, reflecting some acceleration in inflation in this period. New discoveries of gold were again made in this period.

They probably do, but given the distribution of financial and real capital in the world, it is likely that the global equilibrium interest rate is to a large extent affected by developments in the US, the EU and Japan. However, viewed from the perspective of a very small, though very open, economy such as ours, it is clear that equilibrium interest rates and required returns do not reflect specific Norwegian conditions, but are determined externally, and we must adapt to this situation as well as possible. BIS Review 46/2003  9
Rapid employment shift from agriculture to manufacturing & services, and the labor-intensive structure of production necessitates a reformation in this sector. Likewise, a similar productivity improvement is inevitable for energy both in emerging and developed economies. However, given the limited supply of resources, efficient energy use gains a crucial role at this point. According to the International Energy Agency, improved energy efficiency in buildings, industrial processes and transportation could reduce the world’s energy needs in 2050 by one third (Sophie Hebden: “Invest in clean technology says IEA report”, 2006). In this context, energy efficiency together with renewable energy, energy obtained from natural resources, are said to be the twin pillars of sustainable energy policy. BIS central bankers’ speeches  1  Dear participants, Against this backdrop, in the remaining part of my speech, I would like to share our experience in dealing with commodity price volatility, especially in the context of monetary and fiscal policy. Volatility in oil and other commodity prices has both direct and indirect effects on inflation. In this manner, there is a debate in the literature on how a central bank should respond to the changes in commodity prices. Since oil and other commodity-based products are an important component of consumption basket, it is impossible to avoid the so called “firstround effects” of commodity prices, which in turn translates itself into inflation volatility. However, temporary movements in commodity prices do not affect the mediumterm inflation trend, as long as they do not disrupt the general pricing behavior.

There are nominal and real factors that affect commodity price developments. The most important real factor is due to the low price elasticity of not only supply of but also demand for these items. Because of low elasticity, a minor change in supply has the potential to affect market prices significantly. Likewise, a minor change in future real growth prospects has the effect of shifting the demand with a potential of large market price changes. This explains the real sources of commodity price volatility which is recently observed. Regarding nominal sources of volatility, most commonly cited explanations are related to monetary policies of major central banks and the structure of financial markets in commodities. I will elaborate more on real factors that is the lack of sufficient real supply increase in order to meet booming real demand from the developing world. The high growth potential in developing countries suggests that demand pressures are likely to stay with us over the years to come. Combined with the massive financial flows fueled by the exceptionally loose monetary policies, commodity price volatility will probably remain as a major challenge in the years ahead. I believe the key solution here lies in productivity increases in agriculture and energy in the medium term. Regarding agriculture, this necessity is much more evident in emerging markets – in order to keep up with the demand growth, considering the higher share of food in the consumption basket.
Therefore, problems in one bank can easily undermine confidence in other banks. So the contagion risks are significant. In addition, a standard bankruptcy procedure is rarely a good solution for banks, as banks are central to payments and the first step in a bankruptcy procedure is usually to suspend payments. Whether or not a bank is viable, it can be subject to bank runs. I do not want to judge the viability of the banks in question, but it is clear that some banks in the United States and one bank in Switzerland experienced a run. Customers lost confidence and wanted to withdraw their money immediately. There was uncertainty about whether the banks would be able to survive. This uncertainty can bring down a bank, whether it is justified or unjustified. On 9 March, depositors at Silicon Valley Bank withdrew more than $ billion in one day.5 This represented 19 per cent of its total assets, or 23 per cent of its deposits. In addition, the bank itself expected withdrawals to be around $ billion the next day. No bank can handle such a bank run without help. This is nothing new. Banks need to be regulated Precisely because banks are so important to the economy and at the same time so genuinely unstable, they must be subject to extensive regulation and supervision. Following the global financial crisis of 2007-2010, when several banks ran into problems, global standards for banks were tightened, including through Basel III and the FSB's resolution framework.

Since they intended to hold them to maturity, they were able to book them at amortised cost. As interest rates rose and the bonds fell in price, a problem arose. When the bank had to sell the bonds due to the bank run, it realised a large loss, adding to the problem. This raises an important question about how different assets should be booked. Admittedly, the reason for the bank’s problem is that interest rates rose so quickly, but if the bank had been forced to book them at market value, the problems would have been discovered earlier. All this may seem technical, but it has a major impact on banks' capital adequacy, as the starting point for all capital adequacy regulations is the accounting values. I don't have a clear view of what needs to be done here, but when assets that have been booked at amortised cost have to be sold quickly at a large loss, it can affect the viability of the bank and, ultimately, financial stability, and therefore it is a problem. Global rules are important for Sweden I would also like to take this opportunity to emphasise the complexity and interdependence of the global financial system. Banks are exposed to many risks that can be difficult to both understand and monitor. Banks in most countries are also dependent on other banks and other financial institutions. Many of these are located in other countries and are therefore supervised in those countries.
But, looking beyond that, the US economy is underpinned by its robust financial system, by continuing rapid underlying productivity growth, and by strongly supportive monetary and fiscal policies, so that most forecasters anticipate US growth of 2 ½ - 3% this year and somewhat more next. There's even been a better tone in equity and credit markets since mid-October, and some signs of a recovery in ICT investment. On that basis - and notwithstanding the recent disappointing performance of the Eurozone particularly the German - economy - that suggests a reasonable prospect of a continuing but relatively slow pick-up in the rate of growth in our major export markets. And we should also be helped by the recovery of the euro against both sterling and the dollar through the past year. This moderately positive external environment should, looking forward, bring a gradual pick up in external demand and help to stabilise, and subsequently improve, the prospects for business investment in the UK. So the key question on the domestic front remains what is likely to happen to consumer demand: will it fall away abruptly - as some people fear - or will it moderate more gradually as others expect? The truth is that no-one can know the answer with any great confidence - those who claim to know with certainty are always the ones to be wary of in the forecasting business.

However, we do see relatively higher rates in the corporate sector. Examination of the financial positions of companies in Turkey is important to better understand this issue. I should also note that an indebted corporate sector is not a purely negative thing. Besides, the debt rollover ratio of the corporate sector is quite high. In countries like Turkey which have a young population and high growth potential but lack sufficient savings, borrowing to finance production, exports and investments is a normal situation. We attach importance to the channeling of such  4  borrowings into productive companies and areas that support the increase in exports, reduce imports and underpin employment. In sum, we see that the current structures and vulnerabilities of countries as well as the policies they adopted during the pandemic are an important determinant of their economic performance. That said, new virus variants leading to resurgence of cases keep the uncertainty about the course of the pandemic in place. As shown in the relevant slide, a new wave of pandemic has been seen in many countries. However, along with Germany, Turkey is among those countries with a relatively smaller number of cases due to its better performance than countries such as the UK and US. Like all the other central banks, we are closely monitoring developments regarding the course of the pandemic and their impact on the global economy. Turkey is very successful in vaccination, and has diverged positively from other countries in terms of the vaccination level.
The Islamic corporate bonds stands at RM121 billion, which constituted 55 percent of the total corporate bond market in Malaysia. More recently, a total of 26 new corporate sukuk issues with an aggregate value of about RM23 billion were announced in the first half of 2006, representing 71 percent of the Malaysian domestic market's rated corporate bond issues for that period. The operating environment of Islamic finance in Malaysia has also evolved dramatically. The product range has now expanded into broad array of innovative instruments using contracts beyond murabahah or Bai Bithaman Ajil (BBA). In past few years, several new Islamic financial products were introduced which included residential mortgage backed securities, commodity based financing, as well as investment and equity linked product based on musyarakah, mudarabah and ijarah. Recent issuance of Khazanah's exchangeable sukuk is based on musyarakah contract. Malaysia has strong potential to be the centre for sukuk origination as over 60 per cent (USD32 billion) of the outstanding sukuk issuance globally was originated from Malaysia. We have also seen that multi-lateral agencies have begun to tap the Malaysian market and our recent move to liberalise foreign currency denominated financial instruments to be issued out of Malaysia provides a strong catalyst in facilitating the international sukuk market. I would like to urge the industry players to take this opportunity and establish strategic alliance and form syndicates to market these products particularly in view of the growing infrastructure and construction projects being undertaken in the Middle East.

As always, the views presented here are my own and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1  Money-like assets versus safe assets Money-likeness and safety, although closely related, are not completely overlapping concepts.2 Safety refers to an asset’s lack of actual and perceived exposure to risk, including credit risk, counterparty risk, interest-rate risk, and market risk.3 Money-likeness refers to an asset’s lack of information sensitivity, such that, when it is used in transactions, economic agents need not worry about its future value, at least in the short term and in most states of the world.4 Because of this, money-like assets are usually short-term, liquid assets with no credit or counterparty risk, promising a fixed payment in nominal terms.5 In normal states of the world, investors tend not to distinguish too carefully between and among money-like and safe assets. However, in non-normal states of the world, where investors have heightened perceptions of risk—partly because of underlying credit or counterparty issues, but also critically because of uncertainty about the actions of other investors—investors tend to view directly-held liabilities of the official sector as substantially safer than those of the private sector. In these non-normal states of the world, central banks have the unique ability to quickly produce large quantities of assets that are both safe and money-like.
Admittedly, we are seeing a sharp rise in the doubtful assets ratio; however, this is not linked to this type of complex product, rather it is linked to developments in the real economy and therefore what may be called a classic banking cycle problem. Accordingly, on the left-hand side of the balance sheet there is still a lot right in Spain. BIS Review 133/2008  5  Spanish banks’ assets, even taking into account the rise in doubtful assets, are largely of good quality. The fact that Spanish banks’ assets are mostly high-quality and that they have a liabilities structure in line with the activity they finance, in terms of maturities and the degree of permanence, is related to their business model. In contrast to the originate-to-distribute model, the activity of Spanish banks is based mainly on attracting savings to lend to businesses and households and, in the process, maintaining close and lasting links with their customers. This business model has normally been known as "traditional" banking, and many analysts prior to the summer of 2007 equated the concept of traditional with “antiquated”. True, just as the originate-to-distribute model has limitations, which have been laid bare, so too does traditional banking, insofar as it may indeed be antiquated in its management strategies and risk and cost control procedures.

In my opinion, we are now entering the third phase of the crisis, which banks are facing from different starting points, according to the extent to which they have been penalised in the first two phases. The basic characteristic of this phase will be the sharp slowdown in the most developed economies which will, in turn, be adversely affected by the global slowdown in lending. The recessionary tendencies are going to pose further problems for banks in the next few quarters although they will be more traditional, limited and familiar than those experienced so far. The factors which have given rise to such a dismal outlook as that described are diverse and have all interacted with one another. Let me present them now, merely so as not to bore you,  BIS Review 133/2008  3  as a chain of errors committed by all the agents that have participated in the financial system. To start with, the institutions that granted loans made mistakes, especially in the United States, where the originate-to-distribute model became widespread. In the United States, in the years preceding the summer of 2007, lenders granted mortgage loans against collateral (real estate), whose value rose ever higher, generating incentives to lend to individuals with the lowest credit quality.