samchain/econo-pairs-v1 huggingface dataset:
Ladies and Gentlemen, Bank Negara Malaysia attaches great importance to payment system efficiency and will also continue to promote its security, reliability and efficiency, together with the industry and payment service providers, to foster an innovative payments industry. The FPX platform is an excellent example of this collaborative effort, and I wish to commend MEPS, and the pilot group of banks and corporations for their tremendous effort and commitment in developing the FPX solution. The launching of the FPX marks an important milestone in the development of Malaysia’s payments system. Thank you. 2  BIS Review 63/2004

The recent forecasts by various international organisations indicate that, in fact, we are in a very serious worldwide recession, from which neither the euro area nor the Spanish economy have been spared. In general, according to the available forecasts for developed countries, the problems will be acute in 2009, although it is expected that at some point during 2010, taking into account the current high uncertainty any forecasting exercise entails, an incipient recovery may become discernible. The Spanish banking system, as is inevitable when faced with a global financial crisis, has not been immune. Nevertheless, the impact has been no less than in other banking systems, where public authorities have had to take control of very large institutions, as I have said. This better relative performance can be explained by at least two factors. Firstly, the business model of Spanish credit institutions is based on traditional retail banking and is founded on long-term relationships with customers and creditors. This type of banking model has enabled credit institutions to acquire in-depth knowledge of their customers, reducing the perverse effects linked to asymmetrical information present in any banking business model. Similarly, since it does not use asset securitisation as a risk transfer mechanism but only as a means of obtaining liquidity, the origination and acquisition of complex structured products has been avoided, which have proved to be substantially opaque and the cause of hefty losses for many institutions in various countries.
Wage costs have great significance As total wage costs comprise almost 70 per cent of the total value added in the economy, developments in wage costs have decisive significance for the development of costs and prices. Making an assessment of future developments in wage costs is therefore a natural and central element in the Riksbank's analysis of inflation prospects. If there is an overly rapid increase in wage costs, companies may be forced to raise their prices significantly and this would result in inflation exceeding the target level. This would require tightening monetary policy, i.e. raising the repo rate. Although this would bring inflation back to the target level, it would be at the cost of an increase in unemployment. In the long term, however, developments in unemployment are essentially dependent on how well the labour market and wage formation function. Monetary policy has affected the wage formation process; the uncertainty over future price developments has declined thanks to inflation targeting. Wage-earners no longer need worry that their pay rises will be eaten up by overly rapid price increases. At the same time, employers find it easier to determine the size of the scope for wage increases. It also appears as though what is usually termed "monetary illusion" may have disappeared. The labour market organisations appear today to focus to a greater extent on real wage cost increases. The strong confidence in the inflation target has meant that these organisations' inflation expectations have been at a level of around 2 per cent since 1996.

The strained economic situation among a number of municipalities and county councils meant that we assessed it to be difficult for the Swedish Municipal Workers' Union to achieve any further far-reaching wage increases for its members. It was estimated that, all in all, the demand situation would have a subduing effect on wage demands and we thus did not expect to see any major contagion effects in the 2004 wage bargaining rounds from the early termination of the Municipal Workers' Union's wage agreement. We did not find reason to make any fundamental changes to these assessments at the beginning of February, when we had our most recent monetary policy meeting. Wages comprise only part of the total costs for labour among companies; on top of these come costs for negotiated and legislated employer contributions, various types of fringe benefits and shorter working hours. As it is the total wage cost that is important to inflationary pressure, it is also necessary to make an estimate of all of these factors. The assessment in the Inflation Report was that the wage costs for the economy as a whole would increase by just under 5 per cent this year and just over 4 per cent next year. It was also assumed in the forecast that productivity growth would recover after a decline in 2001 and approach the more normal, trend level.
In this trajectory, the maturation of the mining investment cycle discussed in previous Reports has played a major role. In addition, the extraordinary imports of transport materials of the last quarter of 2012 did not continue into this year, and imports of other capital goods were weak in the past few months. Consumption has also slowed down, although its adjustment has proceeded gradually, because of still tight labor market conditions, real wages growing strongly and consumer expectations still optimistic, although less so than in the first half of the year. The deceleration of private consumption is expected to continue over the coming months coupled with a not so strong labor market, a vision that is grounded on our business perception report Informe de Percepciones de Negocios. CPI inflation has been below expectations, mainly reflecting the drop in international fuel prices, which more than offset the seasonal price increases of some perishable foods and the peso depreciation. Thus, in October the CPI rose 1.5% y-o-y, which again placed it temporarily below the tolerance range. In contrast, the core measure CPIEFE brought no major surprises and continued to increase up to 1.6% annually in the same month. Two years ahead inflation expectations remain around 3% (figure 3). In the international financial markets, movements in the last few months have been largely determined by news about the future course of monetary and fiscal policies in the United States.

In the third quarter, the U.S. exceeded market consensus expectations  2  BIS central bankers’ speeches  and, although inventory accumulation played a part, the improved performance of the housing and labor markets, combined with better entrepreneurial and consumer expectations, the behavior of stock and other asset prices and, in particular, the lower intensity of the fiscal adjustment suggest that next year the country will outperform its 2013 figures. The recovery of the Japanese economy is still ongoing, but the tax increases announced for 2014 will taper economic growth. The Eurozone posted positive growth for the second consecutive quarter, although less than expected by the consensus. Worth noting were the slower growth of Germany and the contraction of the French economy and, on a positive note, that some of the peripheral economies grew again. Emerging economies have slowed down further and consensus forecasts have seen new downward revisions. In China, after a substantial correction to its growth projections in the first half of the year, recent data show growth stabilizing around 7.5 percent, quite less than in recent years, however. The baseline scenario assumes that the Chinese economy will slow further to reach 7.2 percent annually in 2015, which points to the need to continue to restructure its sources of growth and resolve some of the vulnerabilities of its financial system. In the rest of the emerging world, economic activity continues to moderate, leading some economies to lower their benchmark rates.
I have spent just over four and a half years as a member of the MPC and it has been a most eventful period to be involved with economic policy-making. My period on the Committee has been dominated by the global financial crisis and the major global recession it triggered in late 2008 and early 2009. However, the global recession is now behind us, even if we are still feeling some if its after-effects. Since the second half of 2009, the world economy has been in a recovery phase and the UK and most other European economies have shared in this return to growth. Indeed, the growth of the UK economy has tracked very closely the average performance of the European Union through the recession and into the early phases of the recovery, as Chart 1 shows. And current forecasts point to a continuation of this pattern this year and next. Chart 1 – UK and EU output growth, 1997–2012 Percentage change in real GDP 5 4 3 2 1 0 -1 -2 UK (exc. oil and gas) *  -3  EU-27 *  -4 -5 -6  1997  1999  2001  2003  2005  2007  2009  2011  *:2011 and 2012 are IMF forecasts. Forecasts for the UK do not exclude oil and gas.

In recent weeks, the perceived likelihood of No Deal has risen sharply as evidenced by betting odds and financial market asset pricing (the UK now has the highest FX implied volatility, the highest equity risk premium and lowest real yields of any advanced economy). In the event of a No Deal No Transition Brexit, sterling would probably fall, pushing up inflation, and demand would weaken further, reflecting lost trade access, heightened uncertainty and tighter financial conditions. Unusually for an advanced economy slowdown, there would also be a large, immediate hit to supply. The Monetary Policy Committee (MPC) would need to assess to what extent that reflects temporary disruption to 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  production, with limited implications for inflation in the medium term, or a fundamental destruction of supply capacity because of the abrupt change in the UK’s economic relationship with the EU. As the MPC has repeatedly emphasised, the monetary policy response to No Deal would not be automatic but would depend on the balance of these effects – on demand, supply and the exchange rate – on medium term inflationary pressures. In my view, the appropriate policy path would be more likely to ease than not, using the flexibility in the MPC’s remit to lengthen the period over which inflation is returned to target. But much would depend on the exact nature of No Deal and its impact.
Overall, these different lines of reasoning help explain why most central banks, including us, have followed a tightening path that combines some gradualism (in the sense of reaching the terminal rate –whichever that turns out to be– through a sequence of interest rate hikes, as opposed to doing so in one or two goes) with a certain front-loading of the adjustment path towards the terminal rate (as exemplified by our 75 pb hike earlier this month) in an effort to preserve the anchoring of inflation expectations. At our latest meeting we also announced that further rate hikes will follow. How much will our rates increase eventually? Let me come back to the first of the two questions I raised before: where is the target-compatible terminal rate? Where do we go: the target-compatible terminal rate Let me be clear about it: no one knows where the terminal rate lies. This is not only a consequence of the uncertainty I mentioned before: it also depends on future events, such as the eventual course of the war in Ukraine and the associated geopolitical developments. This, however, does not mean that we are completely clueless about what terminal rate seems more likely from today’s point of view. Indeed, given the current state of the economy, we can employ our macroeconomic models to obtain a range of the most likely values for the terminal rate. These values are conditional on the information available today, so they must be and will be revised as new information arrives.

2  BIS central bankers’ speeches  requirements by the end of 2014.4 At the same time, regulators are working on the establishment of resolution and recovery plans. When finalised, these plans should enable the regulators to secure the orderly resolution of a global bank in the event of a severe crisis and, in doing so, to make sure that systemically important functions can be maintained. As an important step towards this goal, FINMA has been authorised, since November 2012, to order a bail-in of creditors to generate the financial means necessary for restructuring a bank. Turning to cyclical risk, in June 2012, the Federal Council announced a set of measures consisting of three elements: (1) a permanent increase in risk weights for high loan-to-value mortgage loans,5 (2) a revision of the banking industry’s self-regulation guidelines for mortgage lending,6 and (3) the legal basis for the activation of a countercyclical capital buffer (CCB), as proposed in the Basel III framework. This instrument allows for a temporary increase in capital requirements when imbalances appear to be building up in the credit markets. It thus aims to increase the resilience of the banking system, and helps to lean against excessive credit growth. In February 2013, following a proposal by the SNB, the Federal Council activated the CCB, requiring banks to hold additional capital amounting to 1% of risk-weighted residential mortgage loan positions. Banks have been obliged to comply with this rule since 30 September 2013.
On the former, key principles guiding the policy approach should include clear global rule beyond 2012, the need for clear incentive structure by the government at the country level, reliance on market mechanism to innovate and grow the response, and financial regulation that is neutral on the issue. Under such policy setting, there will be ample opportunities for the financial system, especially in supporting green technology and carbon trading market. Lastly, for emerging markets that are starting up on the issue, five actions along the following lines could be useful. They are (1) establish the country’s overall strategy on carbon trading; (2) reduce search cost in matching buyers and sellers through a centralized system; (3) create awareness and educate all market players; (4) provide the needed tax incentive to build up the market, and (5) provide a clear legal framework. Actions in these five areas will go a long way in avoiding many of the problems that some countries are now encountering. Thank you. 4  BIS Review 97/2008

The second pillar is a broadly based assessment of a wide range of other economic and financial indicators. This all-encompassing and systematic approach guarantees that the Governing Council of the ECB takes into consideration all relevant pieces of information when assessing the outlook for price stability in the medium term. All this shows clearly that the ECB needs to focus on the euro area when conducting its monetary policy. Focusing on domestic objectives is, in fact, the mandate of all major central banks in the world, and rightly so. I strongly believe that the best contribution that the euro area can make to world economic growth is to ensure macroeconomic stability "at home" by pursuing policies which lead to sustainable non-inflationary growth in the euro area. Given the size of the economy of the euro area, a stability-oriented policy will help to create a favourable environment conductive to non-inflationary growth at the global level. The mandate of the ECB is fully consistent with this principle. This is the only reasonable allocation of responsibilities among the large economies in the world. Anything else risks blurring such responsibilities and diluting accountability, which would in turn distort incentives in a perverse way. This notwithstanding, the euro area is not, of course, economically speaking, an island and global developments do affect the euro area economy. Hence, let me also stress that one of the requirements of a globalised world is a frequent exchange of information and views among policymakers.
Of course the foreign exchange costs in the eurozone were limited right from the start of the EMU in 1999, but they will now disappear completely. For the economy as a whole, however, this exchange of cash has involved a relatively small cost, which is nevertheless symbolically important. A somewhat larger cost has arisen from the handling charges the companies have been forced to bear to hedge against undesirable fluctuations in exchange rates. This cost disappeared as early as 1999 within the eurozone, but it is not particularly large in relation to our GDP – perhaps a few tenths of a percentage point. A single currency will promote competition within the EU and benefit the consumers, who will experience lower prices and thereby have more money in their pockets. When everyone uses the same unit of currency, it is easier to compare prices between countries. It will also be an advantage for the national economy as a whole, since competition facilitates the work on holding down inflation. Some differences in prices are unavoidable and arise from transport and information costs, but not all of the differences can be attributed to these costs. Despite the fact that we now have a common market with free trade for goods and services throughout the entire EU, there are still large differences in prices between different countries within the union.

that the krona has been affected by a net outflow of capital from Sweden. The development of the krona and the stock market has shown a strong correlation since the beginning of 2000. This is probably connected with foreign investors selling Swedish shares in line with falls on the stock market, which has affected Sweden more than other countries, as a large part of the stock market value is owned by foreign investors. Moreover, Swedish investors have bought a large amount of foreign shares, which is probably connected with the new pension system and the freer investment regulations for the AP pension funds. It has been possible for the AP pension funds to increase their foreign exchange exposure, i.e. the percentage of foreign assets, from 10 to 15 per cent with effect from this year. The funds can increase their exposure by five percentage points a year to a maximum of 40 per cent in 2006. On top of this comes a factor that is difficult to explain on the basis of classical exchange rate theories. The krona is affected to a large extent by general unease on the global financial markets. During times of financial unrest the krona weakens when investors leave the Swedish market for ones considered a safer investment. This was particularly noticeable during the Mexico crisis of 1995 and the Asia crisis of 1997-98. The recent unrest on the financial markets in connection with uncertainty over the global business climate has once again had a negative effect on the krona.
As I peer into the future, the question is not so much what is wrong with inflation targeting, but rather what we need to preserve and, in fact, strengthen it. Any evolution of the current framework should involve doubling down on fundamental principles that have proven to be successful. What do I mean by that? There are three fundamental elements of inflation targeting that will be crucial as central banks work to prevent inflation from drifting too low: well-anchored inflation expectations, accountability, and transparency. Inflation Expectations, Accountability, and Transparency The most critical element is anchoring inflation expectations at the right level. For those of you who lived through the 1970s and 1980s, the specter of high inflation probably still looms large. But millennials and Generation Z have never faced the prospect of paying 15 percent on a mortgage. It’s often claimed that we don’t really understand what drives inflation expectations. But, in fact, researchers have made significant progress on this topic. Research using a number of approaches has found that the history of inflation plays a big role in inflation expectations. Now, this does not mean that expectations are a mechanical average of past inflation, like in traditional versions of adaptive expectations. Instead, the key finding of this research is that inflation expectations depend on the historical behavior of inflation as shaped by the conduct of monetary policy.

Such an approach would have to be designed to limit the moral hazard implications, incorporating strict conditionality. But it can be useful as a means of supporting a country as it takes remedial policy action through bridging finance. The issue of the standstill is, as many of you will know, controversial in the sovereign context, notwithstanding the fact that an informal standstill plays a crucial role in corporate workouts. Voluntary debt rollover agreements with creditors or bond restructurings are, I believe, useful aspects of effective PSI. But historical experience of involuntary sovereign debt standstills, in the form of payments suspensions, has not exactly been encouraging – the process has often been inefficient and inequitable. Nevertheless, there are circumstances in a sovereign debt crisis where the immediate payments relief provided by a standstill may make an important contribution. An example would be where capital flight is pervasive because immediate policy adjustment is insufficient to bring about adequate voluntary private sector refinancing. In these circumstances, a standstill may realise the same advantages as in a corporate workout if it provides breathing space for remedial policy measures to be evaluated and put in place; if it promotes creditor co-ordination and avoids unjustified creditor preference by treating creditors of the same type equitably; and if it provides incentives to both creditors and debtors to reach a voluntary arrangement sooner rather than later.