samchain/econo-pairs-v1 huggingface dataset:
Ms. Lomax’s vast knowledge of the financial area, as well as, of European policies is successfully shared as she is currently member of the Board of the prestigious Breugel ThinkTank, President of the Institute of Fiscal Studies (IFS) and trustee of Imperial College London. Now, let me give the floor to our keynote speaker, Ms. Rachel Lomax. After her speech we will proceed with the first panel – Global markets volatility and potential risks for Romania. Thank you! 2/2  BIS central bankers' speeches

Implicit in these observations are strong forces pulling in different directions in the monetary and financial system on the Mainland, all with implications for monetary and financial stability, not just on the Mainland, but also for Hong Kong, being so close to and so integrated with the Mainland. There is great emphasis on controllability, gradualism and the ability to take initiatives in the reform and liberalisation of the Mainland, all in the context of the building of a socialist, market economy. I have no doubt that the Mainland authorities will be able to steer the right course through this potent scenario on the monetary and financial fronts, and avoid mishaps. One can therefore be optimistic about Hong Kong, as the international financial centre of the country, continuing to benefit from monetary and financial developments on the Mainland, although we should not forget that in the capitalist, free market environment that we are in, there is a possibility of market volatility or adjustment being magnified. The task is for all concerned to ensure that they are in a position to cope  4  BIS Review 139/2007  with magnified volatility, in other words, manage market risks that may be greater than what they have seen in the past. The linked exchange rate system Let me turn to the THIRD and last issue that I wish to cover this evening. This concerns our own exchange rate system.
In Japan, the impact of the first arrow of monetary stimulus is at risk of being blunted by the recent consumption tax hike. •  The Bank of Japan has just announced a further expansion in stimulus – an openended asset purchase at a rate of about 15% of GDP a year until the inflation target of 2% is met. •  Meanwhile, the third arrow remains largely in its quiver. In China, the challenge is to strike a delicate balance between implementing the reforms necessary for long-term sustainability while supporting short-term growth and stabilising the property market. •  The reform agenda that emerged out of the Third Plenum offers a credible and comprehensive blueprint for the way forward. •  The leadership is keenly aware of what needs to be done and is committed. •  But significant execution risks remain. In India, there is a new government in place committed to improving the business environment for investment and building the infrastructure necessary for a strong manufacturing sector. •  But India needs to accomplish this while taming inflation and reducing its fiscal deficit, not to mention recalibrating the dynamic between the centre and the states that is critical for reforms to take root. BIS central bankers’ speeches  1  Reverting to mean or different this time? The weak and uneven global recovery post-Crisis has raised concerns about the pace of future economic growth and what it means for returns on investments.

To sum up the impact of the four key drivers of growth, deleveraging and demographics are quite unambiguously a dampener while energy appears a benign force. The long term trend for productivity is hard to predict. But even assuming a generally optimistic prognosis for productivity, it is quite likely that global growth in the next 20 years is likely to be lower than in the last 20. This means that returns from financial investments are also likely to be lower in the next 20 than in the last 20. Safeguarding long-term returns The modest outlook for long-term economic growth presents a major challenge for government funds to close the widening gap between their financing needs and investment returns. •  On the liabilities side, population ageing in the advanced economies will increase pension claims and place a heavier burden on social services such as healthcare. •  On the assets side, slowing global economic growth will constrain investment returns. There are three ways to narrow this mismatch between trends in assets and liabilities: •  The first is to reduce financing needs by lowering social expenditures or increasing fiscal revenues. Both are politically difficult to do. •  The second is to reach for yield by taking on various combinations of higher leverage, longer duration, and greater credit and liquidity risks. But the public perception and character of government funds limit their scope for aggressive risktaking.
In the same vein, the UK unemployment rate increased by only 2.5% although output fell close to 6% and Germany underwent a decline in output of about 7%, but its unemployment rate actually decreased. This suggests that labour market mechanisms for adjustment in the face of adverse shocks are not working correctly in Spain, as employment is bearing the brunt of the adjustment and this entails a high cost, in terms of long-term economic growth and social well-being. These differences are not only seen in periods of recession, but also in economic upturns, in the form of diverse levels of unemployment, and of productivity and real wage developments. And we know that there are major differences among countries as regards labour market institutions, thus suggesting that such different unemployment or productivity outcomes may, at least partly, be driven by regulatory differences. This is why it is important to look at the experiences of other countries in order to share experiences and to try to draw some conclusions on the pros and cons of the different institutional settings. The medium-term effects of the crisis I mentioned before are also particularly dependent on the functioning of the labour market. First, the crisis may imply the need for a substantial reallocation of labour across sectors, something that may take time and increase mediumterm frictional unemployment. Labour market institutions may, of course, play a key role in galvanising or impeding this process.

Therefore both the private and public sectors, need to intensify efforts to accelerate meaningful and effective efforts in the drive for greater financial inclusion. In Malaysia, our priorities are to enhance greater access to digital financial services, as well as to enable the underserved to benefit from increased convenience, greater efficiency and lower cost. Another important priority would be financial education for the newly banked, to ensure that new entrants into the financial system behave responsibly and do not suffer the unintended consequences of being over-indebted. For ASEAN, financial inclusion is an increasing priority because it is estimated that 260 million adults in the region still do not have access to the formal financial system, while 45 million small businesses have difficulties in accessing financing. To overcome this challenge, ASEAN Finance Ministers and Central Bank Governors in March 2015 decided to elevate financial inclusion to be a policy priority. It is our shared vision that every person and every small business in the region can participate and benefit from the opportunities that will be brought forth by greater regional integration under the ASEAN Economic Community. Conclusion Our collective efforts in advancing financial inclusion have yielded many significant achievements. The Global Findex Database 2014 will be an important contribution to more  2  BIS central bankers’ speeches  optimal and impactful financial inclusion policy making and implementation. Bank Negara Malaysia would like to congratulate the World Bank Group on this accomplishment.
Few forecasters predicted the developments in the world economy that have affected the Swedish economy over the last year or so. In this speech I shall begin by explaining why the Riksbank makes forecasts and then go on to describe the forecasting process and how it is connected to the monetary policy decisions. One important question in this context is what stance decision-makers should take with regard to risks that are not captured by quantified forecasts. The best thing is to try to develop tools that can quantify the probability of a particular scenario, and to improve the analysis of what impact this scenario would have on the economy. But this is not always possible and I shall discuss my views on this problem. Forecasts are a central part of inflation-targeting monetary policy The primary argument for a central bank to make forecasts is that monetary policy has an impact with a time lag. The Riksbank conducts a policy of flexible inflation targeting. This means that, in addition to stabilising inflation around the target of 2 per cent, the Riksbank also aims to stabilise resource utilisation around a normal level. The Riksbank varies its steering interest rate, the repo rate, to attain the inflation target. However, the effects of monetary policy on the economy come with a fairly long time lag. This means that prior to each monetary policy decision it is necessary to analyse how different repo rate decisions can be expected to affect inflation and resource utilisation over the coming years.

One thing that I of course knew from the beginning is that forecasts – regardless of the uncertainty of their accuracy – must be made when one is making a decision and future developments affect which decision alternative appears most appropriate. This applies in particular to monetary policy decisions. As monetary policy affects inflation and resource utilisation with some time lag, we need to gain an idea of how inflation and resource utilisation will look in the future to be able to decide on what is the most appropriate repo rate now. But unlike when deciding on, for instance, investment in a particular share, it is not possible to disregard the fact that the interest rate decision itself affects future developments. We therefore also make a forecast of our own future decisions, which is affected by the current decision. This makes particular demands of our forecasting. One question that one can pose is to what extent the Executive Board is involved in the forecasts of future repo rate decisions. This is a forecast of what stance we, this group of six individuals, will take at future monetary policy meetings. Today I shall therefore describe the  BIS Review 65/2010  1  process leading up to the repo rate path, that is, the Riksbank’s forecast of the future repo rate. Forecasts are of course always uncertain to a greater or lesser degree. The most recent financial crisis is a very good example of this.
We do not only have to decide on the single monetary policy for a new monetary area comprising 11 independent countries, but also to communicate with the public and markets of these 11 countries, which were used to quite different monetary policy strategies and communication policies in the past. This diversity of monetary history, communication and culture across the euro area obviously constitutes a great challenge for communicating in a comprehensible and transparent way both with the general public and the markets. Obviously, journalists, financial markets and the public are still in the process of learning the new strategy of monetary policy in the euro area and, over time, the Eurosystem will further improve its communication. Let me finally address the third part of your question: (“does more information necessarily mean better guidance?”). I am convinced that it is misleading to assume that more information always means better policy and a clearer guidance to the market. What is important is that the information given to the public is clearly structured and understandable, avoids adding uncertainty and is provided in an even-handed way. The Eurosystem’s monetary policy strategy has been designed with these aims in mind. Moreover, as indicated, a high degree of credibility of monetary policy can make a substantial contribution to reducing uncertainty in the markets and is thus a key aim of our policy.

Mr Duisenberg explains the thinking of the European Central Bank on the issue of whether markets need guidance  Introductory statement delivered by Dr Willem F Duisenberg, President of the European Central Bank, at the Frankfurt European Banking Congress Session I: “Do markets need guidance?” held in Frankfurt on 19 November 1999. *  *  *  Thank you very much for giving me the opportunity to explain the thinking of the European Central Bank (ECB) on this important issue. Let me start by summarising my answer to your question: yes, the markets need guidance from the ECB. This guidance should mainly focus on reducing uncertainty in the markets. This requires above all a clear and credible commitment on the part of the ECB and sound economic analysis. Thus, guidance should be given through a credible monetary policy strategy and a transparent ongoing assessment of euro area developments in line with this strategy. Reducing uncertainty also implies that in our communication we do not pretend that we know more than we really do. Obviously, our knowledge of the future course of the euro area economy will always be subject to uncertainties and limitations. It thus goes without saying that guidance certainly cannot be given in such a way that the ECB indicates a path for future ECB interest rates far in advance. This leads me directly to the second part of your question. (“Is any particular mode of guidance preferable?”) How should the ECB give guidance to the markets?
Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement by Mr Mario Draghi, President of the European Central Bank, before the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 26 February 2018. * * * Mr Chairman, Honourable Members of the Economic and Monetary Affairs Committee, Ladies and gentlemen, I am glad to be back at the European Parliament for my first hearing of this year before your Committee. The two issues you have chosen for today’s debate are very topical and I will address them in turn. I will first discuss the euro area inflation outlook and the main factors impacting on the relationship between growth and inflation. I will then emphasise the relevance of financial market infrastructures for monetary policy. In doing so, I will explain why the central bank of issue needs to have the necessary tools to address possible risks in a limited number of areas which are crucial from the perspective of its monetary policy mandate. Inflation, growth and the ECB’s monetary policy As I said in my introductory statement to the European Parliament plenary earlier this month, the euro area economy is expanding robustly. 1 Growth is stronger than previously expected and more evenly distributed across sectors and geographies than at any time since the financial crisis. According to the latest data, the euro area economy grew by 2.5% in 2017, reflecting strong domestic momentum in private consumption and investment.

The General Court in Luxembourg held in its judgment in 20154 that it would be for the ECB to request the EU legislature to amend Article 22, should the ECB consider that having the power to regulate CCPs is necessary for the proper performance of its tasks under the Treaties. In particular, revising Article 22 is a necessary step for us to carry out the tasks foreseen under EMIR II. Considering the risks the ECB faces with regard to the implementation and transmission of its monetary policy, it is imperative that it be equipped with the necessary tools vis-à-vis CCPs, particularly in a crisis situation. I want to make clear that such measures would aim to address risks in a limited number of areas which are crucial for the implementation of the single monetary policy and the smooth operation of payment systems, which ultimately affect our primary objective of maintaining price stability as mandated by the Treaties. Areas of particular relevance from this perspective are liquidity arrangements, settlement processes, collateral, margins and interoperability arrangements. Let me add that such measures would only be triggered in the event of a clear threat to the conduct of our monetary policy, and would in no way encroach upon the prerogatives of CCP supervisors or the frameworks established by EU legislators. The ECB will act only within its competence, which is to formulate and implement the monetary policy of the euro area.
We must absolutely avoid the second round effects, namely that these price developments lead to futures increases of prices and wages and thereby prolong the period of high inflation and disanchor inflation expectations. Finally, as regards labour supply, further reforms in income tax and benefit systems would help to increase people’s incentives to work. Reducing disincentives to work, such as high marginal tax rates, high unemployment benefits, and encouraging people to work longer as it has been done in Spain, 8 can stimulate the labour supply and employment of all workers, but particularly those with a generally more tenuous attachment to the labour market, such as women and older workers. Furthermore, facilitating the use of flexible forms of work, such as part-time and temporary arrangements, may also contribute to the incorporation of certain segments (e.g. the young, females) into the labour market, hence increasing labour supply. 9 In this respect, the experience of some EU Member States is telling. For instance, Ireland and the Netherlands – both euro area countries – as well as Denmark, whose currency has been pegged to the euro within the ERM since the beginning – have achieved success in reducing unemployment and stimulating job creation, despite significantly different economic conditions. 10 In December 2007 the unemployment rate in these countries was close or below 4.5%, while their overall employment rate was well above the euro area average.

More effective utilisation of technology to improve customer engagements can also increase confidence in the use of financial services. To this end, Bank Negara Malaysia will continue providing an enabling regulatory environment and active facilitation to increase the impact of technology on financial inclusion. This is being driven through several strategic initiatives by the Bank, including the regulatory sandbox, adoption of digital identities for SMEs and piloting the use of psychometric tools for SME credit evaluations. Role of the Financial Industry to drive efforts in SME Financing and Financial Inclusion It has become increasingly important for the financial industry to come forward and address related perceptions on SME financing matters. The industry should actively address issues affecting access to financing by SMEs, by advocating the players to adopt best practices in 2/3  BIS central bankers' speeches  financing activities and lead initiatives to reform inefficient practices. Key strategic recommendations should be made to the Government and regulators to enhance the SME financing ecosystem, particularly in supporting new growth areas and increase contributions by financial institutions to SME sector. In this regard, the financing ecosystem needs to be complemented with comprehensive SME development strategies and initiatives to strengthen SMEs’ capacities and capabilities. This includes efforts towards training and retraining of workers, adoption of technologies in business and operating process, as well as in governance, finance and accounting practices.
Moreover, we have to cope with home-brewed shocks as well. It is for these reasons that we are eager to keep an independent monetary policy. Furthermore, if markets became convinced that in the future the SNB’s actions would merely be a Xerox copy of the ECB’s monetary policy, they would rapidly force a convergence of our nominal interest rates with those of the eurozone. Our real interest rates might remain lower for a while, given our relatively large endowment of physical capital, but a tendency towards equalization would nonetheless set in. What this might mean for us is a higher inflation rate for some time, together with a collapse in asset prices and in domestic gross capital formation. A cocktail of higher interest rates and our high wage structure would be highly detrimental to our competitiveness in export markets. The third fear that was sometimes expressed, although here I must say I was rather sceptical myself, was that the euro could eventually make the Swiss franc obsolete. With many of our trading firms billing and paying their suppliers in euros, there might be a tendency for them to adopt the euro more generally for their accounting as well as for their domestic transactions. Some people even went as far as predicting that before long wages would be paid in euros. Shops, hotels and restaurants would rapidly be forced to accept euros, so that visitors from abroad would no longer see the need to convert their euros into francs.

No, I believe that if one really aims at exchange rates that are irrevocably fixed, then one should move all the way, that is go for monetary union. As long as two currencies are distinguishable, their relative price might change. So the choice is between flexible exchange rates and monetary union. Needless to say, since Switzerland is not a member of the European Union, joining the eurozone is not an option worth discussing at this stage. Fixing the franc against the euro would not even be a second best. It would rather be the worst of all worlds by suppressing our monetary independence, and, at the same time, exposing us to all the dangers of speculative attacks by setting us up, the back against the wall, alone against the market. 3. Our post-euro experience  What has happened since January 1, 1999, all in all, has proven very reassuring. Our worst fears have not materialized, and indeed, in some ways, the outcome has been even much more favourable than we could have hoped for. First, let me briefly sum up our experience with regard to the fears of “euroization” and of the loss of our monetary degree of freedom. As expected, the Swiss franc was not crowded out by the euro. Sure, the euro circulates in Switzerland, just like the Swiss franc circulates in neighbouring France and Germany, but the phenomenon remains marginal, and it does not exceed the use of the French francs, German marks and Italian liras in the pre-euro world.