samchain/econo-pairs-v1 huggingface dataset:
In some countries the State has been able to obtain foreign loans and thereby contribute liquidity to banks with problems. Meanwhile, these countries have made their own efforts to implement confidence-enhancing measures that would stabilise the situation. Other countries have been obliged to turn to the international community, headed by the International Monetary Fund, for assistance with foreign liquidity. Private banks have also been engaged, as one might expect considering that they are the banks which have exposures in these countries. In return, the countries have been required to take measures so that confidence can be restored. In other words, the underlying problems must be tackled. By itself, liquidity support does not suffice. The required measures include the orderly winding up of insolvent banks, a clearer account of the problems, a reduction of current-account deficits, a consolidation of government finances so that expenditures for restoring the financial sector can be covered, and a construction of monetary policy that guards against the risk of the country been suddenly hit by massive currency outflows. In such a situation one cannot expected the necessary adjustment to be painless or free from difficult decisions. Attempts by a country to isolate itself from the international exchange of financial services would probably lead in time to effects on growth and prosperity that are just as disastrous as protectionist measures in other fields. A country that chooses to impose controls for a time would find it hard to re-enter the international credit market once the crisis had subsided.

The central banks also cooperate on matters of this type in the framework of the Bank for International Settlements in Basle, Switzerland, where representatives of central banks throughout the world meet regularly once a month. Conclusion To sum up, the financial system is undergoing a rapid transformation and development. The middle of the 19th century is commonly associated with the industrial revolution. Perhaps future historians will see the late 20th century as the era of the financial revolution. Europe’s move towards a single currency will accelerate the trend. The transformation and development of the financial system will ultimately contribute to future prosperity. But experience has taught us that it is a development which needs to be monitored very closely and presupposes a high degree of discipline in economic policy. It requires a great deal from decision-makers in the political system and the supervisory authorities, as well as from those of us who work in central banks. BIS Review 81/1998  -6-  Developments in the financial field are creating large opportunities. But it is also important to bear in mind that major, far-reaching changes normally entail risks. In view of these risks, every agent in the financial system needs to act wisely and discerningly. Only in this way can the full benefits be drawn from the opportunities that financial developments are providing. BIS Review 81/1998
The target is for the annual rate of change in the CPI to be 2 per cent, with a tolerance for deviations of plus/minus 1 percentage point. The decision to define the target for monetary policy in terms of a specific figure was of course partly due to the desire to create a nominal anchor that everyone could recognise and base their expectations on. However, another important reason was that a specific target would facilitate assessments of the Riksbank’s activities and make it easier to hold the Riksbank accountable, which was important when it had been granted so much independence. Inflation can be measured in many different ways. The Riksbank chose the CPI as target variable partly because it is a broad price index that represents typical purchases made by consumers and the index is familiar to the general public. But the development of the CPI cannot always indicate what monetary policy is needed at a particular time – no single inflation measure can do this. The Riksbank therefore uses various measures of underlying inflation to describe the trend rate of inflation and to justify the monetary policy conducted. Our most commonly used measure, with the not so pronunciation-friendly name UND1X, consists of the CPI adjusted for certain items that are very directly affected by fiscal and monetary policy. So, there are educational gains with using measures of underlying inflation.

If inflation two years ahead was expected to be lower than two per cent, this was a signal that the interest rate needed to be cut, and if it was expected to be higher, the rate needed to be raised. Of course, this rule could not capture all of the nuances in the monetary policy considerations, but it provided a rough explanation of the monetary policy decisions. However, there were also disadvantages. In normal cases it is not, for instance, particularly realistic that the policy rate would remain unchanged a couple of years ahead. The fact that the forecasts were based on this assumption made it difficult to assess our forecasts and to compare them with those of other forecasters. Nor was it easy to implement the assumption of a constant rate in a consistent manner in the forecasting process. These problems would have been aggravated when we extended our forecast horizon. The transition to the new interest rate assumption at the same time meant that the simple policy rule used to explain monetary policy had to be abandoned. This rule was easy to understand and was therefore a good educational tool: if the forecast of a constant repo rate showed inflation close to target the interest rate would be held unchanged. However, it gradually became clear that this rule could sometimes form an obstacle in our communication. It created an exaggerated focus on the current interest rate decision and on the inflation forecast exactly two years ahead.
The multifaceted interplay of ever greater processing power and storage capacity, together with the increase in the mobile use of services, are opening up entirely new business areas. This is also reflected in the large number of different business models currently represented in the Swiss fintech industry. The slide 9 shows the different business models in Switzerland. Only 15% of the enterprises within this segment are focusing on DLT, while the remainder are spread across other fields of application. One of the key areas for fintech is retail payments, i.e. payment transactions for companies and private individuals. A well-functioning system of payment transactions for end customers is a key pillar in any efficient economy. This payments area is undergoing a period of rapid technological change. Page 6/8  As with all fintech innovations, the primary focus is on the user-friendliness and speed of the services offered. Technological advances have led to marked changes in consumer expectations and requirements. Consumers want payment services to be ever faster and more user-friendly, and they want to be able to use them wherever they may be. End consumers these days are asking why it should take them longer to make a cashless payment than to send a WhatsApp message. As elsewhere, customers expect immediate service when it comes to payment transactions, and demand round-the-clock availability as well. To satisfy these demands, fintech companies and banks are working on new solutions, such as new applications, functionalities and services.

6  BIS central bankers’ speeches  With domestic demand growing at around 3% in 2014, the fastest for ten years, all these factors will underpin the momentum needed to bring domestic cost growth back to up to a rate consistent with the inflation target. The fall in inflation we’ve experienced is in large part down to falling energy prices. It is not generalised “deflation” proper. The proportion of prices that are falling is consistent with the average over the past decade. The Bank will be vigilant in monitoring inflation expectations. Declining headline inflation seems likely to have cooled households’ inflation expectations as the prices of the goods they buy frequently – like fuel and food – have declined markedly. On balance, however, inflation expectations remain broadly consistent with the 2% inflation target. As the MPC noted in our February Inflation Report, we retain considerable policy options in the event that downside risks materialise. 6. Conclusion  The Bank of England’s inflation target is symmetric. We care as much about inflation below target as above. With inflation below target and unemployment above its long-run sustainable rate, we are aiming to return inflation to target as quickly as possible. In our most recent forecast, The Bank expects to return inflation to target within two years and to make limited and gradual increases in Bank Rate over the next three years in order to achieve that in a sustainable manner.
Finally borrowing countries are being increasingly encouraged to develop, in the current less febrile environment, an ongoing dialogue with their major external creditors in the expectation that this would help to identify emerging concerns and possible responses at an earlier stage and to promote a more constructive reaction on the part of those creditors when storms begin to gather. Now, all of these steps are steps which countries themselves can take to reduce the risks of domestic or external macro-economic shocks leading to financial instability, which in turn would be likely to amplify the effects of the initial shock. But with the best will in the world such shocks will no doubt continue to occur. And alongside all this work on what countries can do to help protect themselves, a major review of the terms and conditions of the IMF facilities is taking place, designed to increase the effectiveness of the financial help that the IMF can give to its member countries when they do run into difficulties. This is not an easy issue on which, I know, people hold strong views. We have to try to strike a sensible balance between excessively onerous and excessively liberal conditions attaching to IMF support. On the one hand, if IMF conditions - whether preconditions attaching to quasi-automatic support in the event of sudden capital outflows or adjustment conditions attaching to the Fund’s more traditional facilities - if in either case the conditions were too demanding, countries may be deterred from seeking the Fund’s help.

Traditional banks are taking the new technologies on board, occasionally through strategic alliances with new technology firms. New companies are also being incorporated into the sector, ranging from small start-ups to large firms. The new firms must, however, win the confidence of consumers and investors,  6/7  something that traditional financial institutions have secured over a long period of time, anchored by strong regulation and financial supervision. From the standpoint of the regulators, the fintech challenge affects both prudential and consumer protection policies. From the prudential perspective, regulators must strike a balance between catalysing innovation and the efficiency that new technologies can provide, and maintaining a sound regulatory framework. The guiding principle should be to apply the same regulation for the same type of financial services. In this respect, as the presence of fintech increases, it might be useful to put greater emphasis on the regulation of services, instead of placing it on the institutions that provide these services. Turning to consumer protection policies, it is vital that investors and consumers should understand how the new services function and the attendant risks, including, for example, credit, cyber-security and privacy-protection risks. Here we should strengthen our information and financial education policies. We are mindful at the Banco de España of the need to step up our efforts in this area.
I therefore, urge the donors to the Foundation to increase their allocation in the coming year and in future. I also call on other well wishers in this room and outside to support this noble cause. Remember, an educated population is a pre-requisite to a country’s economic development. This year, the Masomo Scholarship is conferred on three exceptional and deserving young individuals in Ms Lenganji Nalwamba who is studying Electrical Engineering, Mr. Wapatwa Silungwe, studying Civil Engineering and Mr. Emmanuel Mwila who is pursuing Agricultural Economics. In congratulating you on this deserved achievement, let me remind you that as you accept this scholarship, you have an obligation and duty to the Masomo Foundation and to the nation at large. It is this strong sense of obligation, duty, and commitments to serve the nation that enabled our fathers and fore fathers serve the Nation wholeheartedly and brought us where we are today. As students with a Masomo Scholarship, each of you will be given a unique opportunity to prove yourself. I urge you to work hard and learn from others around you including those different from you and less endowed than you. Let me also mention that as a Masomo Scholar, your progress and performance will be closely monitored and you will be looked upon as role models. I urge you to set the standards for others to emulate. I am confident that all three of you will live up to the highest standards and will not disappoint us.

Having been a lecturer at the University of Zambia in the earlier days of my career, puts me in a better position to understand the passion and deep knowledge of the local issues the Zambian teachers and lectures possesses. I have no doubt that supporting our local institutions will lead to a stronger motivation and morale in our teachers. To this end, my Institution, the Bank of Zambia, currently provides scholarships to the University of Zambia and the Copperbelt University. Additionally, we also provide salary supplements to relevant departments as a way of encouraging our Zambian academics who are working under very difficult and challenging situations. Furthermore, I am reliably told, that the Masomo Scholarship is conferred only on the best and intelligent young men and women. The stringent selection criteria ensure that only deserving candidates possessing outstanding performance in academic and co-curricular activities are selected. I am further informed that the candidates are of exemplary character and are committed to the betterment of their families, societies and the nation at large. Ladies and Gentlemen, I am also informed that this year, the Foundation received several applications from a wide section of candidates. It is gratifying to know that many young men and women wish to have an opportunity to better their education in these trying times. It is for this reason that I call on all of us to assist, foundations like Masomo, to increase the number of scholarships so that many more people could benefit from the scholarships.
As mentioned earlier, the Bank faced a number of teething problems in the implementation process of the first stages of the framework with departments having some difficulties in following written guidance that was being given by the Risk Management Department. As one of the possible solutions to this, senior management agreed to the Risk Management Department’s suggestion that Phase II of the risk management framework implementation process also be effected through  BIS Review 71/2008  1  workshops, targeting the Risk Liaison Officers who are, by definition, the critical anchors of the approved risk management framework. This background therefore justifies the gathering that we have here today. Ladies and Gentlemen: Your group, as Risk Liaison Officers, Alternates and Risk Coordinating Officers, occupies and a plays a very important role in the governance structure of the Risk Management Framework. You may wish to note that your group plays a function of a “critical link” between staff from your respective departments and the Head of Department who is, by definition, the Risk Manager. For this reason, the importance of your responsibilities should be very clear and need not be overemphasized. For those who might have forgotten their roles, I wish to encourage you to re-familiarize yourselves with the Risk Management and Business Continuity Management (BCM) Policies, where your respective responsibilities are clearly spelt out.

12  NSO, unpublished estimates  13  During the Euro-Mediterranean Ministerial Conference on Trade held in March 2002, participating Ministers noted that the dismantling of tariffs will not be enough: “Businesses have to benefit from an economic environment where trade is facilitated by an adaptation and a harmonisation of regulatory provisions concerning the free movement of goods, standards, right of establishment, property rights.”  BIS Review 69/2002  3  join, which means that they will shortly have complete access not only to an enlarged EU market, but also to the reciprocal trade agreements which the EU has with third countries. If local businesses are not to lose out to competition from this new source, therefore, the administrative burdens and financial outlays associated with the achievement of legal equivalence and the adoption of EU technical standards will have to be borne within the same time frame available to the other candidate countries, irrespective of whether Malta joins the EU or not. Yet even if such compliance is achieved on schedule, under any arrangement other than membership Malta would only be able to tap the markets covered by EU reciprocal agreements by negotiating individual bilateral agreements with most of the countries in question. Given Malta’s limited negotiating capacity, combined with the slow pace with which the conclusion of such agreements tends to proceed and also the high degree of protection in many developing countries, this seems to be an unrealistic objective.
This would have been the 21st century equivalent of capitalising the ashes in the blast furnace. For what goes around comes around. Hypothetical losses during 2008 would then have totalled in excess of £ billion, as the risk from these projects was realised. The ashes in the furnace truly turned to dust. Had shareholders not already torn it out, this rollercoaster ride in profits would have been hair-raising. In this admittedly extreme case, it is questionable how much shareholder protection fair values would have delivered in practice.   “Fundamental misalignment”  A related but distinct issue arises when market prices deviate from their true values for a protracted period. Marking to market then runs the risk not just of unwarranted volatility but unjustifiable bankruptcy. Take a bank whose liabilities are perfectly maturity matched with its 10-year assets. So there is no necessity for the bank to liquidate its assets to make good its liabilities as they fall due. But the market price of the banks’ assets might well embody a premium for instant liquidity – a liquidity premium. As Chart 5, at times of stress, these premia are large and overshoot, lowering asset prices below economic value. In this situation, a marked to market balance sheet may give a misleading impression of banks’ worth. And if these distortions are large enough, fair values could even generate insolvency.

Policy strategy Delivering the growth in activity, the rise in domestic costs and the firming in core inflation measures necessary to return inflation to target requires monetary policy to be set appropriately both now and prospectively. In this regard, one concern has been the constraint imposed on monetary policy by the effective lower bound on policy rates. In my view, with the healing of the financial sector and the lessening of some of the headwinds facing the economy, that concern has become less pressing with the passage of time. As I made clear in my first open letter in February, were downside risks to inflation to materialise the MPC could decide either to expand the Asset Purchase Facility or to cut Bank Rate further towards zero from its current level of ½ per cent. 29 In the current circumstances there is no need to wait to raise rates because of a risk management approach and run the risk of inflation overshooting target. At the same time, the timing and pace of prospective interest rate increases need to be put into perspective. Headwinds to growth and inflation remain. Growth in the parts of the global economy that matter most to the UK is running ¾ percentage points below its historic average. Sterling has appreciated around 18 per cent over the past two years and around 7 per cent since the turn of the year. This will exert a drag on inflation both through lowering import costs and by lowering world demand for UK goods.
Judging by the fact that controls are more efficient provided they are in place before the resumption in large capital inflows, should we use them from the very start  1  A recent classification of control instruments is provided in Qureshi, M., Ostry, J., Ghosh, A., Chamon, M. (2011). BIS central bankers’ speeches  5  of a wave of capital inflows, before resorting to macroeconomic policies? I don’t think so. And what would be the best choice for emerging countries that are members of economic areas based on free capital movement, such as the European Union? Any scheme indicating where controls should be positioned in the policy toolkit of emerging countries needs to be based on a clear-cut distinction between risks associated with large capital inflows and the actual quantities (flows). Controls have a direct impact on quantities. But macroeconomic policies can have an indirect influence on quantities. Once the exchange rate has appreciated enough to near its equilibrium level and foreign reserves have reached a point beyond which any further purchases are suboptimal, changes in macroeconomic policies may go on. We may move from a deficit position to public budget surplus. The lesson that can be drawn from recent experience is that policymakers’ hesitations in this regard may prove costly. Monetary policy has room to lower interest rates just as long as this does not jeopardize the inflation target objectives. From that point on, fiscal policy is the only macroeconomic policy left in the fight against capital inflows.

Later on, the two mainstreams merged in order to create the dynamic stochastic general equilibrium models based on which monetary policy has been conducted ever since the early 1990s. 10  BIS central bankers’ speeches  After practitioners and theoreticians agreed on the above mentioned issue, low and stable inflation became the main, and sometimes the only objective of monetary policy. Blanchard et al. (2010) showed that “this was the result of a coincidence between the reputational need of central bankers to focus on inflation rather than activity (and their desire, at the start of the period, to decrease inflation from the high levels of the 1970s) and the intellectual support for inflation targeting provided by the New Keynesian (NK) model”. According to the NK standard model, low and stable inflation is indeed the best policy to pursue, since the “divine coincidence”, as Blanchard and Gali (2006) called it, is assumed to hold, so that by maintaining a stable inflation, the output gap equals zero. Thus, within this framework, central bankers were able to take care of production without further debating the issue. Moreover, this suited the practitioners since, according to this model, the interest rate was the only instrument resorted to for attaining the inflation target, just like in practice. Nevertheless, preserving stable inflation does not ensure a zero output gap, where the economy also faces other imperfections than the nominal ones. Although both theoreticians and practitioners were aware of this, they maintained their view that low and stable inflation was beneficial for the economy.