samchain/econo-pairs-v1 huggingface dataset:
But if one really thought that the repo rate should have been 0.25 per cent, it is difficult to understand why one would advocate a repo-rate path that did not turn down at all over the coming three years, but rose throughout the entire forecast period and reached 3.8 per cent in the middle of 2014.4 So what was the view outside of the Riksbank? At around the same time, in June 2011, the National Institute of Economic Research forecast that the repo rate would be 3 per cent at the end of 2012 and that at the end of 2014 – that is, around now – it would be just over 4 per cent.5 The NIER’s forecasts are often something of a benchmark for other analysts and on this occasion, too, they were a good reflection of how most analysts perceived the situation. The forecast for the repo rate was also fairly well in line with the Riksbank’s view (see Figure 2). This policy was considered compatible with a balanced resource utilisation in 2014 and a CPIF inflation rate close to 2 per cent in 2013–2015. It is thus obvious that this is a picture of a policy that was essentially governed by traditional monetary policy motives and where concern over household debt certainly did not play a major role. How did international analysts view the Swedish economy at this point in time?

And it will focus on improving how we communicate, both internally and externally. We want all our colleagues to feel empowered to raise issues promptly, to challenge and to voice any concerns they have. These initiatives will help us build the trust that is crucial to delivering our mission. And they will help us merit that trust by making us more effective. The Bank will learn the lessons of these unfortunate events and apply those lessons to reinforce what’s best in banking and the Bank of England. 14  For details of recent Court reports see: http://www.bankofengland.co.uk/about/Pages/ieo/default.aspx. Additionally, see Grabiner, “Bank of England Foreign Exchange Market Investigation”, 2014, at: www.bankofengland.co.uk/publications/Documents/news/2014/grabiner.pdf 8  All speeches are available online at www.bankofengland.co.uk/speeches  8
BIS central bankers’ speeches  15  Figure 14 Housing prices (index, base 2008 avg =100)  200  200  CChC  BCCh RM  BCCh  Previous FS Report  160  160  120  120  80  80  40  40  0  0 04  05  06  07  08  09  10  11  12  13  14  15  16  Sources: Central Bank of Chile (BCCh) and Chilean Chamber of Construction (CChC). Figure 15 Household indebtedness (RDI) and financial burden (RCI) (percent of disposable income)  70  30  60  25 RDI  50  20 RCI (right axis)  40  30  15  06  07  08  09  10  11  12  13  14  15  10  Source: Central Bank of Chile based on SBIF, SuSeSo and SVS data. 16  BIS central bankers’ speeches  Figure 16 Cross-country comparison of capital adequacy indexes (1)(2)(3) (percent)  25  Median  25th and 75th percentiles  Chile  25  Mín-Max  20  20  15  15  10  10  5  5 09  10  11  12  13  14  15  16  (1) Effective equity over risk-weighted assets. 2016 figure uses effective capital increases in 2016 for Chile, ceteris paribus , plus the effect of the CCF reduction CCF (20bp).

In other ways, though, the aftermath of the attacks on the US has highlighted the robustness of the international financial system. Although several firms suffered grievous losses of staff and destruction of equipment, overall the market place was back up and functioning remarkably quickly. I think there were a number of reasons for this. In the first place the Federal Reserve System did an excellent job in making the necessary liquidity available to markets, both in the United States and in other financial centres through swap arrangements with the ECB, the Bank of England and other central banks. Second, the authorities and systems providers were able to keep the main payment systems (Fedwire and Chips) open during and after the evening of September 11th itself. This was a significant achievement, enabling the huge daily volume of dollar payments to be made, including of course substantial dollar flows from the foreign exchange and other dollar markets based in London. Equally impressive was that most of the big firms affected were using their back-up contingency sites very quickly, allowing them to continue in business with a minimum of obvious disruption. Some of those contingency sites were in New Jersey, others put increased volumes through their London office. In New York itself, connectivity of telephone traffic was initially badly affected because of the routing of so much traffic through connections located downtown. But this problem was short lived.
Rather the let down has been on the import side, where there has been less substitution of domestically supplied goods and services for imports than past experience would have led one to expect. It is possible that increased specialisation means that demand is less responsive to price than it used to be. Alternatively, heightened uncertainty and the absence of UK suppliers for some sorts of goods and services may mean that it takes longer for import penetration to respond to the enhanced profit opportunities. In any case, the MPC still expects net exports to contribute substantially to the overall growth in demand over the next few years as the necessary rebalancing gradually takes place. The most recent trade figures indicate that net exports of goods boosted GDP by around 1¼ percentage points in the first quarter2, and suggest that we may at last be starting to see a more significant contribution to growth. Chart 4 shows the MPC’s current assessment of the outlook for four-quarter GDP growth, as published last week in the Bank’s latest Inflation Report and assuming that Bank Rate follows the gently rising path implied by market interest rates. The single most likely path lies within the deepest green band. The near-term path is somewhat choppy, reflecting the impact of factors such as the extra bank holiday associated with the royal wedding.

It is worth noting that the current elevated inflation rate of 4.5% can be largely accounted for by the effects of energy and import prices and VAT: energy prices and VAT are probably each contributing around one percentage point to current inflation, and non-energy import prices around double that. The twelve-month inflation rate is likely to remain elevated through the remainder of this year, and indeed may rise further in the second half of the year, as utility prices are likely to rise sharply to reflect higher oil and wholesale gas prices. But inflation should fall back as we go into 2012 and factors such as the rise in VAT drop out of the calculation. But the pace and extent to which inflation will drop back will depend on a number of factors. First, there may be further significant movements in commodity prices and in import prices more generally. Second, there may be some resistance to the past erosion in living standards, resulting in a period of faster pay growth. Third, although pay growth has been subdued, the low rate of growth of productivity has nevertheless resulted in a squeeze in profit margins and there may be some attempt to restore these as the economy strengthens. Finally, if the period of elevated inflation leads business and households to expect higher inflation in the future, then it may also lead them to set higher pay and prices.
It also covers a large proportion of household consumption. These were central arguments when the CPI was chosen as the target variable in the beginning of 1993. A disadvantage with the CPI, however, is that it combines information about inflation’s underlying trend with transitory price movements. In the period in which the inflation target has been in force, transitory factors have had a marked effect on the CPI on a number of occasions. Examples of such factors are tax changes (most recently the increases to and subsequent cuts in property and tobacco taxes) and fluctuations in interest rates (which affect the CPI in the form of house mortgage expenditure). During 1996 and 1997 in particular the CPI has been relatively markedly below not just the targeted rate but even the tolerance interval. This has faced the Riksbank with educational problems. Transitory effects on inflation ought to be a secondary consideration in monetary policy and be absorbed inside the tolerance interval of 1–3 per cent. That is one of the interval’s functions. And BIS Review 47/1998  -6provided it is a question of temporary price movements around a stable rate of inflation, there is no reason to counter such movements with repo rate adjustments. On the contrary, that might have a destabilising effect in the real economy. Instead, monetary policy’s central concern is the direction of inflation’s long-term trend. It is this trend which can be affected more directly by total demand and hence by monetary policy.

These attributes are a prerequisite for a vibrant international financial system and are supportive to global trade. A regime with many reserve currencies would imply a well-governed international economy. This should facilitate global investment, resulting in rising productivity growth and improving standards of living. In other words, I don’t see this as a zero-sum game. If other countries’ currencies emerge to gain stature as reserve currencies, it is not obvious to me that the United States loses. This is assuming, of course, that the emergence of alternatives is being driven by their progress, rather than by the U.S. doing a poorer job in satisfying the attributes that I discussed earlier. Having more countries achieve the stature of having a reserve currency may also be desirable for other reasons. First, with more reserve currencies available, portfolio diversification opportunities are enhanced. This is desirable because, all else equal, it would allow investors to move further out on the risk/return frontier. Second, more currencies are likely to be close substitutes, which could dampen currency volatility. With many viable reserve currencies available, no particular one would necessarily have to bear the bulk of any adjustment. The dollar’s dominant reserve currency status has sometimes been referred to as the United States’ “exorbitant privilege,” implying that the U.S. benefits extraordinarily from this privileged status. I’d argue that the situation is much more nuanced. Yes, this status does allow the U.S. to benefit from seigniorage. More than half of all U.S. currency outstanding is held abroad.
Freer flows of funds and closer financial ties within the region, after all, will provide much-needed support for investment activities and business dealings over the years to come. D.  Concluding remark  Ladies and Gentlemen, I would like to conclude my talk today by restating my firm belief in the promising future of the Thai economy, and stressing again the pressing need for the country to move forward to the long-term agenda of competitiveness and sustainable growth. In these days, once we get so used to reacting to new information in the marketplace, it does not take long before we get so involved in the battle scene that we might lose the long-term perspective. It also does not take long before we forget that meaningful upgrading takes a careful, deliberate planning to truly succeed and a considerable amount of time to unfold. Given many challenges at home and abroad, moving Thailand forward is sure to be an arduous task. As a non-crisis country this time, it is wise to stay vigilant since “good” time is still the time when bad loans are made and imbalances accumulate. It is much wiser, however, to also use this time to make a head start toward the brighter future. The world is moving toward greater speed and greater interconnectedness every second, and to thrive in such environment, a balanced mix of demand management and structural reforms is a prerequisite. They are entrance tickets to a safe, undisrupted trip on the road to prosperity over the years to come.

I cannot stress enough the importance of having a future generation of workforce that is capable and flexible enough to accommodate changes in production technology. In addition, fostering close collaboration with the private sector could also be an essential part of the solution, and it is very encouraging to see more involvement from large Thai corporates in the process of recruitment and training as of late. (2)  Engineering a “transformative” upgrading of the supply side  In addition to relieving constraints in the labor market, the second reform focus I would like to discuss is the urgent need for a “transformative” upgrading of the supply side. Pursuing growth from labor-intensive activities is no longer a viable option, due to the fact that Thailand would not be able to compete with lower-wage competitors, and also the fact that such strategy is simply unsustainable from a long-term perspective. More importantly, failing to upgrade now will cost us an inestimable amount in the form of missed opportunities. Indeed, it was precisely the inability to engineer a large-scale upgrading, when the time was ripe, that separated our path from peer countries like Taiwan and Korea that started out at a relatively similar income position several decades ago. By using the word “transformative”, I mean that the upgrading process needs to go beyond mere efficient use of workers and capitals. It has to support firms to move up the value chain to higher value-added activities.
We will make sure that this issue, too, is given due consideration in the discussions about the future of the Swiss banking sector. For only with an effective monetary policy can we fulfil our responsibility and ensure price stability for Switzerland. Ladies and gentlemen, thank you for your attention. 4/4  BIS - Central bankers' speeches

William C Dudley: The US economic outlook and monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Club of New York, New York City, 12 November 2015. *  *  *  Jonathan McCarthy, Paolo Pesenti and Joseph Tracy assisted in preparing these remarks. It is a pleasure to have an opportunity to speak here at the Economic Club of New York. As the current chair of the Club, I’m admittedly biased, but this is a great venue to have the opportunity to share my thoughts about the U.S. economic outlook and the implications for monetary policy. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Before I start, I want to be clear about one specific issue I will not address today – that is, whether or not I expect the monetary policy normalization process to commence at the next FOMC meeting in December. Let me just say that my view will depend on how incoming data, broadly defined, influences my assessment of the prospects for further improvement in the U.S. labor market and my confidence that inflation will return to the FOMC’s 2 percent objective over the medium term. With that caveat out of the way, how do I assess the U.S. economic outlook?
I do not claim that Basel II covers all the areas and refinements needed to complete the framework for financial stability, but it does make a landmark contribution by incorporating a new forward-looking approach, to banking regulation and supervision, which is, at the same time, consistent with the lessons of the past. 3. Framework for financial stability. Beginning with my first topic - the framework for financial stability - allow me to make a final reference to the hypothetical book that might be written in 2046. I would not be surprised if the author of that future book noted an interesting contrast that existed at the beginning of the twenty first century. Although we have a well-developed framework for debating and conducting monetary policy, our thinking on financial stability is less advanced. 2  BIS Review 8/2005  As an example, in the monetary field we have agreed on a definition of monetary stability – namely price stability. We have a framework of analysis that allows the causes and consequences of price instability to be studied. And, moreover, we have a highly developed decision-making framework for pursuing monetary policy, which has almost universally adopted the principles of central bank independence and primacy of price stability as the goal of monetary policy. In comparison, and despite significant progress during the last decades, we are not nearly as far along with financial stability, and there are areas where we still have something to learn.

In addition to the complications that follow on from an institution being established in several countries, supervision and risk management are made more difficult by the banking group sometimes choosing to manage the risks on a functional basis and not in accordance with the bank’s forma organisation. For example, a bank with operations in several countries can choose to locate all of its credit management to one country and its liquidity management to another country. In general, this development strengthens financial stability. The capacity to identify, manage and reduce risks has increased. The institutions’ cross-border operations make them less dependent on how the economy of an individual country develops. However, at the same time a number of new possible problems arise, which must be prevented and managed by institutions and authorities. Risks and vulnerabilities may fall between different authorities’ or countries’ fields of responsibility and thereby may go unnoticed. Or, if they are noticed, territorial conflicts may arise, making it more difficult to implement the measures needed. It may also be unclear where the risks will end up. Bank supervision can ensure that the banks have sold certain risks, but it is not clear whether the buyers have the knowledge and financial strength to manage these risks. In the worst case scenario, the risk will return to the bank in a loss situation. The development I have described must be met with increased harmonisation of regulations and supervision, both between sectors and between countries.
When India diversifies its economic base in this way, its weight will increase, and its effect on the region will be felt more keenly. Despite several changes of governments and Prime Ministers, India and its leaders have continued on the reform path. A billboard at the 2006 WEF meeting in Davos proclaimed: “15 years, 6 Governments, 5 Prime Ministers, ONE DIRECTION”. The message is clear: reform and liberalisation in India are irreversible. China serves both as an example of what a large country can do and a compelling reason for India to grow faster to keep up. I believe that India will continue to grow at a high rate. I have met Indian leaders across the political spectrum. I am persuaded that they will continue to open up the economy and welcome foreign investments. Take the case of West Bengal in Kolkata, a state that has been under communist rule for 30 years. The Chief Minister, Buddhadeb Bhattacharjee, one of the politburo members of the Communist Party of India (Marxist), candidly said that he welcomed foreign investment, “whatever the colour – be it yellow, red or white”. 2  BIS Review 76/2007  Against this dynamic backdrop, individual ASEAN countries have been strengthening their economies and competitiveness. Collectively, ASEAN integration is quickening and deepening. In January this year, ASEAN Leaders committed to establish by 2015 – five years ahead of the original target – an ASEAN Economic Community.

Yes, many of these countries have been downgraded lately, but what that means in terms of actual default probabilities is not clear to me at this point, although it might be somewhat clearer after the next session. The fact of the matter is that advanced countries have both considerable means and strong incentives to avoid default. Even Iceland was able to avoid a default after the collapse of 90% of its financial sector and its deepest recession since the interwar period. So, for the post-war period, Walter Wriston has been largely right so far, in saying that “countries don’t go bust” – as far as advanced countries are concerned – although he was wrong as regards all countries. And what holds for advanced countries in this respect does so increasingly for the more important and advanced EMEs. I am not denying that sovereign risk has increased, more broadly speaking. Higher deficits and debt levels and weaker growth prospects bear witness to this. But the degree to which this translates into higher default probabilities in the narrow sense is not clear. My prediction is that default probabilities will remain low for most advanced countries. What, then, about the reaction of rating agencies and markets? Here again, we have the question of what rating agencies are actually trying to measure. I have long experience of dealing with them in my current and past jobs, and I have the sense that they are measuring something more than default probabilities.
There is a natural demand for good banking services in all countries and if you, the authorities and policy-makers, set up a reasonable framework for banking, I am convinced that you will soon see applications for new banks or for existing banks to change their structures, activities or mode of operations. In achieving an efficient banking system, the authorities are faced by a number of questions: What is the optimal number of banks? In modernising a banking system you would like to have a “reasonable number” of banks – not too few but not too many. In many countries the lifting of the old and restrictive regulations leads to an influx of a large number of mostly small “family-owned” banks but many of these tend to have overoptimistic plans for their activities and are closed rather soon leading to consolidation of the banking sector. Some depositors and other counterparties could suffer losses from dealing with these banks. Are such events necessary steps in the development or could they be avoided? In my experience, some countries after scrapping their old regulations became ultraliberals and provided licenses for banking on too lenient grounds. They did not properly evaluate the prospects for the banks to conduct profitable business in a competitive environment and they set the requirement for basic minimum capital far too low. But having said that I would warn against doing the opposite – to let the authorities decide how many banks there ought to be and then distribute a fixed number of licenses.

Finally, I would like to explain how at the Banque de France we address them in order to strike an appropriate balance between, on the one hand, the objective of fostering innovation and the overall efficiency of financial services and, on the other hand, the objective of ensuring a secure and level playing field for all suppliers and their customers (3). 1. From Fintechs to Bigtechs: a decade of digitalisation of the financial intermediation’s value chain Understanding how the Fintech sector emerged and has been structured (A) is critical to assessing its impact on the future of intermerdiation (B). (A) The concept of Fintech, contraction of Financial Technology, designates both a structural shift – the digitalisation of finance – and the main actors of this shift: the Tech firms. The digitalisation of finance is prospering on the grounds of cutting-edge technologies. The combination of big data analytics, cloud computing, artificial intelligence and blockchain is transforming the way financial products are designed, processed and distributed. For its advocates, this transformation promises: better consumer experiences; more diversified financing of the economy; and greater efficiency of the financial system. In addition to these promises, cutting-edge technologies also lower the entry barriers to the financial sector for early adopters: the Tech firms. This should not come as a surprise: internet and smartphones have lowered the distribution costs, big data technologies have lowered production costs and the shrinkage of banks’ balance sheet in the wake of the Great Financial Crisis has given space for new players to conquer market shares.