samchain/econo-pairs-v1 huggingface dataset:
Our forecast is that unemployment will rise to just over 9 per cent during the latter part of 2010. Both the number of persons employed and the number of hours worked will fall. Labour productivity has been weak over a long period of time; it has even fallen, but in 2009 GDP is expected to grow more quickly than the number of hours worked. Productivity will thus increase again, albeit weakly to start with. We are expecting productivity growth to average at just under 3 per cent in 2010 and 2011. …but brighter prospects await after the decline The picture I have now painted is certainly not very cheerful. But global growth is expected to bottom out this year. Developments do look brighter for most countries as early as the beginning of 2010. As with all economic downturns, sooner or later there will be an upturn, although it may take time. It is necessary to adjust to the new conditions and it may take some time before households and companies have the confidence to begin consuming and investing again. But once the adjustment has come, when consumption and investment have picked up, the wheels of the economy will begin to turn more quickly. The stimulation from  4  BIS Review 23/2009  monetary policy, fiscal policy and other measures around the world will also contribute to dampening the decline and speeding up the recovery that is waiting around the corner. As I said, growth here at home has weakened rapidly as well.

Like when we Executive Board members take a decision on what interest rate path is needed for inflation to be close to the target of 2 per cent a couple of years ahead. How much do we need to change it and how quickly? Decisions in times of uncertainty and how we manage this is a recurring theme today. You members of the Committee on Finance will later be asking questions on the basis of the material for assessing monetary policy published by the Riksbank on 16 February.2 Your views on our interest rate decisions of recent years – whether you consider they were wellbalanced given the information at the disposal of the Executive Board at the time the  1  This calculation is based on the SEK/USD exchange rate on the respective auction date. 2  See “Material for assessing monetary policy 2006-2008”. BIS Review 23/2009  1  decision was made – comprise important information for us. I am therefore looking forward to discussing the assessment later, during the actual hearing. But first I would like to talk about how the financial crisis affects the conditions for our policy. I shall also discuss the most recent interest rate decision and our readiness for dealing with unexpected economic developments. The financial crisis affects the conditions for monetary policy For a long time, the global financial crisis only had a fairly limited effect on the Swedish economy.
A higher level of integration will therefore be beneficial for our economy, enabling investors to find profitable investment opportunities whenever and wherever they arise. It will also enhance competition among financial intermediaries and among financial infrastructures and, as a consequence, reduce the costs of intermediation. However, highly interconnected systems could also be more prone to systemic risks. To avoid those risks, integration initiatives are being undertaken which place a very strong emphasis on the safety and resilience of financial markets and infrastructures. Let me now turn to post-trade harmonisation, the central theme of this conference. The harmonisation of market practices, rules and standards in post-trading is a necessary component of financial integration. Inefficiencies and barriers in clearing and settlement make market access difficult for investors and for issuers. The European securities market cannot be said to be fully integrated if post-trade arrangements are not harmonised, ensuring safety, full competition and the absence of barriers across national markets. This is why both authorities and industry players are making great efforts to achieve posttrade harmonisation. Today, we have been offered a comprehensive overview of what is currently happening in Europe at the post-trade level. On behalf of Commissioner Barnier, Mr Paulis highlighted how, with the crisis, the speed of financial reforms has accelerated. Many participants have underscored the importance of transparency to achieve safer posttrading and to increase the existing level of competition in the industry.

When expectations were lowered, equity prices fell. The decline was amplified after the downturn in the global economy deepened as a result of terror and fears of war. Investors sought to avert the risk in the stock market. Demand for bonds increased, resulting in low long-term interest rates. Chart 3. A war economy? Index. January 2001=100 110  150  Swiss franc (left-hand scale)  105  125  100  95  100  Oil price (right-hand scale)  Gold reserves (right-hand scale) 11 September  75  Resolution 1441  90 2001  50 2002  2003  Source: EcoWin  In response to heightened uncertainty and fears of war, traditional safe havens for capital, such as the Swiss franc and gold, have become increasingly attractive. The Swiss franc appreciated after the terrorist attacks on 11 September 2001 and towards the end of last year. Gold prices moved up sharply after UN Security Council Resolution 1441 was adopted on 8 November last year. Oil prices fell markedly after 11 September 2001, but have since risen. Fears of war in Iraq have increased the uncertainty surrounding global oil supplies. Strategic oil reserves have risen, while private reserves are low. This has exerted upward pressure on oil prices. The strike in Venezuela has also had an impact. Major economies such as the US, Germany and France are struggling with stagnation and fears of recession. Substantial tax relief and low interest rates are holding up activity in the US.
Both John Maynard Keynes’ theories and analytical tools developed by Norwegian economists such as Ragnar Frisch and Trygve Haavelmo generated regulatory optimism, which laid the basis for a new approach to economic planning, for example through the annual national budgets. Fiscal policy – changes in public spending and taxes – was now regarded as the most important instrument for smoothing economic fluctuations. The use of direct regulation of the economy increased. The role of interest rate policy was toned down considerably. 21 Centralised planning gained ground, with the Ministry of Finance playing a prominent role. As a result, there was also a shift in Norges Bank’s responsibilities, with the full agreement of the Bank. In his first annual address in 1946, Governor of Norges Bank Gunnar Jahn said: “It goes without saying that a bank of issue cannot and should not conduct a policy that is inconsistent with that determined by the Storting and the government.” Coordination with government policy was formally strengthened in 1949 when the government acquired all the shares in Norges Bank. In addition, the Bank’s annual report was to be sent to the Ministry of Finance and no longer directly to the Storting. Corporatist channels became important, providing some scope for a central bank in search of a mission. Samarbeidsnemnda (the Cooperation Committee), a body established in 1951, comprised commercial and savings banks, insurance companies, the Ministry of Finance, the Banking Inspectorate and Norges Bank, with the central bank governor as chair.

The interest rate level which has now been established should, in addition to directly contributing to stabilising the krone exchange rate, dampen price expectations.”  32  Svein Gedrem (1999) “Utfordringer i pengepolitikken” [Monetary policy challenges], Aftenposten, 4 May. 33  Kydland, Finn E. and Prescott, Edward C. (1977): “Rules Rather than Discretion: The Inconsistency of Optimal Plans.” Journal of Political Economy No. 87, pp 473–492. 34  Barro, Robert J. and David B. Gordon (1983): “A Positive Theory of Monetary Policy in a Natural Rate Model”, Journal of Political Economy No. 12 pp. 101–121. BIS Review 154/2010  9  long-term cost can be considerable and the short-term gains limited. Norway and other countries learned this in the 1970s and 1980s. The British prime minister Harold Wilson once remarked, “A week is a long time in politics”. This attitude also influenced economic policy in our country. The result was economic instability, with both high inflation and high unemployment. Just as Ulysses had himself tied to the mast to resist the Sirens’ 35 temptations, the government authorities can prevent themselves from pursuing a policy that is harmful in the long run by setting objectives and delegating tasks. A central bank should be independent in its use of policy instruments, though the objective of monetary policy should naturally be set out by the government and the Storting. 36 The division of responsibility was clearly defined when the government presented its guidelines in 2001.
We know how to confront international recessions and financial turbulences. We did so just a couple of years ago and we designed instruments that ensure the proper functioning of the financial system. Inflation is close to the target and the policy rate is within a range we consider normal. The fiscal policy also has room to maneuver like few countries in the world. But there are also good reasons to be worried. We don’t know for how long the emerging economies can grow if the developed ones are still weak. How long can China sustain world growth? Do all the emerging economies have fiscal room to back a weak scenario, or it has been shrinking after the strong stimulus packages of 2008–2009? And there are the local tensions, too. Certainly, the climate of political and social unrest is not the most appropriate to confront a further deterioration of the world economy. For the same reason, this scenario imposes more than ever the challenge of building an effective solution for these specific problems, but always safeguarding macroeconomic stability and strengthening our capacity to grow. This is not only about the specific policies we apply, but also about how we resolve our problems. As much as some have trouble admitting – it seems that the trendy thing is to complain about everything – our country is exemplary. In the past few decades, all of us Chileans have enjoyed progress like never before in our history.

(2) Geometric average for the U.S., the Eurozone and Japan. Sources: Central Bank of Chile, Consensus Forecasts and IMF. BIS central bankers’ speeches  9  Figure 7 Monetary policy interest rates (1) (percent) 12  12  10  10  8  8  6  6  4  4  2  2  0  0 01  02  03  04  05  06  Developed (2)  07  08  Emerging (3)  09  10  11  Chile  (1) Simple average of monetary policy rates of each group of countries. (2) Considers the Eurozone, Japan and the U.S. (3) Brazil, China, Colombia, the Czech Republic, Hungary, Mexico, Peru, Poland, South Africa and South Korea. Sources: Respective central banks and Bloomberg. Figure 8  Unemployment (*) (index centered on mean of period 1990-2011)  40  40 1.100  1.100  1.000  1.000  900  900  800  800  700  700  600  600  500  500  400  400  20  20  0  0  -20  -20  -40  -40 90 93 96 99 02 05 08 11  Capital goods imports (*) (millions of dollars, moving quarterly average)  06 07 08 09 10 11  (*) Seasonally-adjusted quarterly series. Sources: Central Bank of Chile, National Statistics Institute (INE), and Ricaurte, M. 2011, “Indicadores de Mercado Laboral para la Comparación de las Crisis Asiática y Financiera Internacional ”.
Zeti Akhtar Aziz: Islamic finance - dynamic industry in a rapidly changing global environment Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 2nd International Islamic Finance Conference, Dubai, UAE, 22 September 2003. *  *  *  Bismillahirrahmanirrahim “The Islamic financial industry is ascending to prominence in an environment that is highly competitive and constantly subject to the forces of change. The industry has made significant progress, with the essential fundamentals underpinning financial infrastructure to support its sound expansion in place. The challenge before us is to bring the industry to its next stage of development and reinforce the robustness of the industry in a more challenging environment. Of importance is the need to evolve the strategies that need to be adopted to build key strengths and enhance institutional capacity in the industry. Indeed, collaborative efforts need to be intensified on the global front and integration accelerated. As the decade unfolds, insha-Allah, the Islamic financial industry will evolve into an increasingly dynamic and vibrant industry” It is my honour and pleasure to be here today at this Second International Islamic Finance Conference, organised by the Islamic Development Bank and the General Council of Islamic Banks and Financial Institutions. Globalization and financial liberalization have brought profound changes to our domestic and international financial landscape. These changes have been accompanied by an accelerating pace of financial liberalisation, driven by advances in technology. The advancements in information and communication technology have removed barriers in the market place.

Jean-Pierre Roth: The current economic and monetary policy situation 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 Centro di Studi Bancari, Vezia, 17 September 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is difficult to determine to what extent the turmoil in the US sub-prime mortgage market impacts on the real economy. It has hit Switzerland at a time when our economy is in enviably good shape. Should the situation in the financial markets not deteriorate any further, it is hard to imagine these factors abruptly slowing economic growth. With its decision to let the Libor slide back towards 2.75% in the short term, the SNB has clearly signalled to the markets an easing of the situation. In Switzerland, price stability has been maintained for the past 13 years, economic growth is significantly higher than in the 1990s and our unemployment rate is the lowest of all industrialised countries. It is our goal to preserve this favourable situation. BIS Review 102/2007  1
Vítor Constâncio: The governance of financial stability in the euro area Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the “ECB and its Watchers XIII” conference, Frankfurt am Main, 10 June 2011. *  *  *  Introduction Ladies and gentlemen, It is a pleasure to take part in this thirteenth edition of the ECB and its Watchers conference. I would like to use my intervention today to reflect on how the economic and financial crisis should alter policymakers’ conception of the governance of financial stability in the euro area. Prior to the crisis, financial stability was often viewed in a rather abstract manner, as a condition that flowed from other well-defined pre-conditions – for example, low inflation – or as a concept that could only be addressed after the fact – for example, once bubbles had burst. However, the crisis revealed that financial stability warrants much more prominent attention:   First, it became clear that financial stability depends on a much broader range of sources than was previously acknowledged, from both macroeconomic imbalances in the real economy and imbalances in the financial sector.   Second, it was revealed that the channels through which financial instability could spread are various and complex, with negative consequences for both the financial and real sectors, thus requiring ex ante and not only ex post policy responses.

Increase in consumption and private investments, owing to the improved financing terms, confidence and private sector balance sheets, was, and is expected to continue to be, the main driver of the economy’s performance. On the other hand, the public sector has been and remains committed in the path to fiscal consolidation, whereas the external environment continues to face problems and pose challenges to the increase of Albanian exports. In the short run, the increase in consumption and private investments is sufficient to generate initial triggers for economic growth, but the long-term growth of the Albanian economy should rely more on the improvement of its competitive profile and growth of exports. Therefore, we deem that the acceleration of structural reforms has a unique role in supporting economic growth. Inflation continued to stand below our target. Internal inflationary pressures have been upward, but the fall in prices in global markets decelerated the return of inflation to target at home. The monetary policy stance of the Bank of Albania has become strongly accommodative. This policy stance aims at reducing the financing costs of the private sector, in order to sustain the return of the economy to equilibrium and of inflation to target, in the medium-term horizon. In our view, the indicators of economic activity and inflation are performing in the right direction; however, the sustainable accomplishment of targets will need time and will imply keeping low interest rates for some quarters ahead. Overall, the main indicators in banking system activity improved.
I expect not because I think there’s always people that test the limits of the law and regulation and are always trying to see where they can go. And there are obviously going to be bad apples in any really large organization. What I hope is that, one, the banks will sustain their effort to improve their cultures. Banks really are working on this. I spoke at a bank industry conference about a month ago, where they brought in all their very high potential mid-level people to talk about culture, and it was really them talking about bank culture and I came in for a very short period. I think I was the only person from the official sector that spoke there. And I thought the fact that they were taking all these people that are high-performers and spending a day trying to inculcate them with the importance of culture maybe suggests that we’ve passed a tipping point. So, that’s important. I think the other thing that I’m hoping to see is the banks start to cooperate a little bit more with each other and share best practices on bank culture. Up to now it’s been most banks working sort of on their own thing alone. I think if they actually shared best practices, shared survey results, to see how they were doing relative to their peers, that would also help them perform. And the last thing I would say on culture, I think we’ve got to continue to work on incentives.

You could probably do the Volcker Rule in a more efficient way to achieve the same objectives without the burden of regulation that you have right now. You know, right now, if you’re an equity trading desk and the equity market falls very violently, you really aren’t supposed to go in and buy equities unless you actually have customer orders. So, you actually have this crazy situation where the equity desk can’t actually buy equities to support the market. So, I’d like to see the Volcker Rule looked at to see if there’s a way of doing it in a way that – if you’re a client-facing business, and you’re trading your own asset class, you have a little bit more freedom to buy and sell when markets are volatile and maybe provide actually a little liquidity support in the market. But also make it a lot easier, I think, to enforce the Volcker Rule. The other thing I would say is relief for smaller banking institutions. The financial crisis was not about small banking institutions. It was about large banking institutions and particularly it was about large broker-dealers. And so I think the Dodd-Frank Act imposed a lot of compliance and regulatory costs on smaller banking institutions. And I think – we have about 6,500 smaller banks in the United States plus a lot of credit unions and other financial intermediaries.
From the beginning of this year, business surveys have improved, broad money growth has stabilised at around 5% a year, and the housing market is picking up. Despite this encouraging picture, growth is not yet strong enough to reduce the considerable margin of spare capacity in the economy. Nor is recovery at an adequate rate fully assured. The weakness of the euro area and the problems of the UK banking system continue to act as a drag on growth. So the need to support the recovery remains. Of course we must be mindful of the risks from injecting more money into the economy. We cannot afford to return to the inflationary episodes of the past. In the two decades before inflation targeting was introduced in 1992, inflation averaged almost 10% a year. The purpose of inflation targeting was to change the way in which interest rate decisions were made and to build credibility in the UK’s commitment to price stability. Over the following two decades, CPI inflation averaged only a fraction above 2%. Today, inflation is above the 2% target – as it has been for most of the past five years. But our economy has had to absorb an BIS central bankers’ speeches  1  oil price shock on a par with that of the 1970s, as well as a sharp depreciation of sterling.

By taking firm pre-emptive action, we have shown what the new judgement-led approach to supervision means in practice. It substitutes substance for process and judgement for box-ticking. We need not more but better regulation and, just as with monetary policy, we have changed the way regulatory decisions are made. The PRA announcement tomorrow is another step in dealing with the legacy of the past. It will make our banking system more resilient and better able to support recovery. But it is too soon to say that the job is done. Many of our major lenders will still be highly levered. The levels of capital required by the Vickers reforms, on the one hand, and the Basel standards for large international banks, on the other, mean that there is clearly some way to go before we can claim to have a really well-capitalised banking system. In future, the FPC and the PRA will work together to conduct regular stress tests of our banks, starting in 2014. Those stress tests will I am sure be made public, and banks will be expected to set out their plans for making up any identified shortfall in capital. Managing this process, and the transition to a higher level of capital, will be key tasks for the FPC and PRA in the coming years. Those who argue that requiring higher levels of capital will necessarily restrict lending are wrong. The reverse is true. It is insufficient capital that restricts lending.