samchain/econo-pairs-v1 huggingface dataset:
We have also advanced in a technological leveling project and we have implemented three-year periods for strategic planning. I am also proud to have presided over the Central Bank during a period where the average annual inflation rate was 2.8%, and was most of the time within the established tolerance range and where the functioning of internal and external payments was totally normal. These are the objectives set forth by our Constitutional Organic Law. Unfortunately, the unusual increases in the prices of foods and energy pushed annual inflation above 7% toward this year’s end. This should be a transitory rise in inflation that will fade away in coming quarters, conditional to annual inflation expectations remain anchored around 3%. It is not pleasant to leave the Central Bank with such a high inflation figure. But I understand that it is a circumstantial development that is part of the job, and that the highly qualified Board and staff will take the appropriate decisions to achieve the objective to return inflation to 3% within the habitual policy horizon. We have applied an effective monetary policy that has become a powerful countercyclical tool, in light of the experience of recent years. But it would be of little use if we did not rely on the responsible fiscal policy that Chile has applied. 2  BIS Review 149/2007  During my term, I was lucky to work with two top-level finance ministers, with whom I always had very fluent communication in the subjects of common concern.

As a result, companies that can bypass the banks to access capital markets directly are doing so. Indeed, in the first four months of this year, more finance was raised in debt and equity markets than is normally the case in an entire year. Most companies, however, especially smaller and medium-sized enterprises, rely heavily on bank finance. And with current market sentiment it may take further additions to equity capital before the banking system will be able to supply credit at a price and on a scale to finance a sustained recovery. That is likely to take time. It is too soon to reverse the extraordinary policy stimulus that has been injected into the UK economy through monetary policy, the provision of liquidity support to banks, guarantees of bank funding, and fiscal policy. Nevertheless, it is not too early to prepare such “exit strategies” and to explain how they would work. The challenge facing the Monetary Policy Committee is straightforward in principle but difficult in practice. As activity returns to more normal levels, the outlook for inflation will pick up. And it is the outlook for inflation that will guide decisions on the pace and timing of a withdrawal of monetary stimulus. Reaching judgements on the outlook for inflation is never easy, and assessing their implications for policy will always be a matter of balancing risks. In contrast, the choice of instruments is simple.
The world economy continues to grow and the US economy remains robust despite the interest rate hikes by the Fed and the slight softening in the property market that ensued. The Asian economies are deriving increasing benefits from China's vitality. An economic upturn is also visible in Europe, especially in Germany, even though it is still moderate. In addition, the fact that world growth is generating more demand for investment goods is creating a particularly favourable situation for our exports. We may expect a positive spin-off from this good foreign trade performance for all areas of the Swiss economy – in production as in employment. To date, the rise in sales abroad has been handled through substantial gains in productivity, but we may hope that this will now be followed by a resumption of investment in equipment, along with increased recruitment. Consequently, the overall economic climate in Switzerland is likely to continue improving over the next few months, thereby supporting consumption. We project growth of slightly over 2% for the year as a whole. This return to growth does not constitute a threat to price stability. Our forecasts indicat that average inflation for this year is likely to be about 1%, and the outlook remains just as favourable for 2007. Compared with other countries, Switzerland will continue to enjoy a privileged position in this respect. What may we expect from monetary policy? The inflation forecast we published in March clearly indicates that the current interest rate level is incompatible with long-term price stability.

One estimate of r-star in the United States, from a model developed by Holston, Laubach, and myself, is around half a percent in the United States. That’s actually now lower than at any time before the Great Recession.3 We’ve seen similar declines in r-star in other advanced economies, including in Japan and the euro area. In fact, the GDP-weighted average of estimates of r-star for Canada, the euro area, the United Kingdom, and the United States is now also half a percent, nearly 2 percentage points below where it stood at the turn of this century.4 These very low neutral rates are largely a result of global, longer-term structural factors. They’re driven by demographic changes, slow productivity growth, and demand for safe assets—all of which are unlikely to reverse any time soon.5 One key takeaway from these global trends is that interest rates and inflation are going to stay lower than we’ve come to expect in the past.6 This means that monetary policy will likely be more frequently constrained by the lower bound, or LB for short, creating a set of challenges for policymakers. In particular, life near the LB means central banks have much less room to maneuver using adjustments in short-term interest rates when faced with a downturn. The Fundamentals of Inflation Targeting Given that inflation targeting was designed in a world where inflation was undesirably high, does it still work for a world with the opposite problem?
The United States drew benefit from the flexibility of its economy, which allowed a better and swifter adaptation to a more demanding environment, while policies took on an unmistaken expansionary stance. Conversely, the Japanese economy had neither the flexibility to adapt, owing to its numerous rigidities, nor scope for stimulus from its demand-side policies, whose room for manoeuvre essentially petered out some time back. Finally, the euro area economy, also beset by structural rigidities, was relatively inflexible in that fiscal policy leeway was directly proportionate in each country to the consolidation drive pursued in the previous upturn, with room for manoeuvre proving greater in the case of the single monetary policy. Consequently, the experience of recent years shows how vital it is to harness economic upturns so as first, to increase the flexibility of economies in order to absorb more readily the impact of adverse disturbances; and further, to give economic policies sufficient headroom in contractionary phases. In this context, it is of paramount importance that macroprudential policies should remain particularly vigilant and react promptly and decisively in the face of potential signs of weakness in the segments of the financial system under their supervision. In the wake of the crises of recent years, an increasing number of emerging economies undertook with varying degrees of ambition and success - structural reforms aimed at greater flexibility. Yet these improvements did not prevent crises from continuing in some of these countries, virulently so in Latin America in 2002.

Jean-Claude Trichet: ECB and ESCB – ten-year anniversary Address by Mr Jean-Claude Trichet, President of the European Central Bank, at the ceremony to mark the 10th anniversary of the European Central Bank and the European System of Central Banks, Frankfurt am Main, 2 June 2008. *  *  *  Mr President of the Republic, Sehr geehrte Frau Bundeskanzlerin, Mr President of the European Parliament, Mr President of the European Union, Mr President of the European Commission, Mr President of the Eurogroup, Ministers, Excellencies, fellow Governors, Ladies and gentlemen, Ten years ago, on 1 June 1998, the European Central Bank was founded, together with the European System of Central Banks, the ESCB. The primary mandate of the ECB and the ESCB was, and is, to preserve price stability and to safeguard the credibility of Europe's single currency, the euro, which was created seven months later. It was the will of the democracies of Europe that led to the creation of the ECB. Its mandate and its independence in fulfilling its mandate were given by the people of Europe on a multinational and multi-partisan basis. We are faithful to our mandate because we are faithful to the democratic will of the Member States. Jean Monnet writes in his Mémoires: “Rien n’est possible sans les hommes. Rien n’est durable sans les institutions”. “Nothing is possible without men.
This led to a quicker drop in unemployment and the increased use of foreign labour. Consequently, 2006 was very clearly a year of consolidation in the economic cycle, following the uncertainties of the prior periods. The current outlook represents a continuation of this situation since the order books are well filled and the CEO confidence index remains positive. Thus, the rate of unemployment is likely to continue dropping over the course of the next few months. One sector that is dependent less on the foreign economic situation and more on the financial environment is the construction sector. Residential construction has benefited strongly from the low interest rates over the past few years. In 2006, 41,000 new dwellings came onto the market or almost double the number in the early 2000s. Demographic developments as well as increasing incomes linked to favourable financing conditions assured a healthy level of demand. Nevertheless, there were initial signs of saturation, and a gradual drop in the mortgage growth rate was evident. Everything points to a further decline in growth momentum for residential construction this year. By contrast, industrial and commercial construction is likely to continue improving. Growth in employment and income had a favourable impact on household expenditure. Growing at a rate of some 2%, consumption became a driver of the economy, a situation which contrasted to that of past years. The continued decline in unemployment over the months to come is likely to consolidate this picture. Overall, the Swiss economy recorded real growth of about 3% in 2006.

Yet the good results can be explained quite logically, since they arise from a combination of particularly favourable factors. First, I would like to mention the remarkable ability of the private sector to adapt to the challenges presented by the globalisation of markets. Thanks to reorganisation efforts in the export sector, results in foreign trade have improved substantially. Over the past ten years, our exports have grown by more than 80%, or five times as fast as the gross domestic product. We now run a surplus in goods trading in addition to our traditional surplus in the area of trade in services. The success of strategies geared to quality and high-tech content are demonstrated by the vigorous growth recorded by exports in high added-value areas such as electronics, watchmaking, chemical and pharmaceutical products. Alongside this we should mention the growth in the exports of services, particularly in the areas of finance and tourism. Overall, our net balance from trading in goods and services has increased from CHF 17 billion to CHF 37 billion in 10 years, in other words, from 4.6% to 8.3% of GDP. Clearly, far from threatening our expansion abroad, globalisation has led to an expansion in our markets from which our companies have been able to derive extensive benefits. The prosperity of our foreign trade depends to a large extent on the good shape of the global economy, whose performance has been very good over the past few years.
In the weeks before 15 January, the level of intervention needed to maintain the EUR/CHF minimum exchange rate on the foreign exchange markets was already high and climbing rapidly. The further depreciation of the euro against the dollar after 15 January, and following the ECB’s decision on quantitative easing shortly afterwards, is an impressive illustration of how enormous the additional pressure would have been to maintain the minimum exchange rate. Had we delayed the discontinuation of the minimum exchange rate, this would only have been at the expense of an uncontrollable expansion of the SNB balance sheet – by hundreds of billions of Swiss francs, and potentially several times Swiss GDP. Such an expansion would have severely impaired the SNB’s future ability to conduct monetary policy and substantially jeopardised the fulfilment of its mandate in the long term. Moreover, given the fact that the minimum exchange rate was no longer sustainable, further intervention would have been pointless, and the magnitude of the associated losses could not have been justified. Following the discontinuation of the minimum exchange rate, the Swiss franc initially appreciated sharply against all currencies, before weakening again somewhat in recent weeks. Overall, the Swiss franc is still significantly overvalued. We expect that this will be corrected with time. We are aware that the new situation presents the Swiss economy with great challenges. Nevertheless, it cannot be compared with conditions before the introduction of the minimum exchange rate.

The cure in such cases is to achieve primary surpluses in the future, and this can be done in two ways: cutting fixed expenditures or raising taxes. We know, even from our own experience in the 1990s, that this process is painful. On the other hand, there is real danger of conflict between the objectives and directions of the fiscal and monetary policies. Tightened monetary conditions and loosened fiscal conditions have contrary macroeconomic effects, at least on demand. To this we could add the significantly delayed structural reforms which could have supported the resolution of supply-related problems, but have not yet been brought into the focus of the budgeting debate. The combination of these two factors would seriously hinder the endeavours to limit and keep inflation down; and what is more, it would create conditions for return to the macroeconomic imbalances of the recent past. Such a development, inter alia, would have a strongly deleterious effect on the businesses and banks in Bulgaria. Therefore, in terms of greater predictability of the macroeconomic environment dynamics, now one of the major economic policy tasks is to try to synchronise as much as possible the monetary and fiscal conditions in Bulgaria. In the language of  2/5  BIS - Central bankers' speeches  budgeting, this means accomplishing fiscal consolidation that can be measured by a concrete number: a budget deficit not higher than 3% of GDP.
This creates a risk that innovative new businesses aren’t able to access the funding they need to grow and develop their ideas. In addition, having a financial system that supports business investment is particularly important as we transition to net zero carbon emissions. UK businesses will need to make significant investments in coming years – in technology, energy efficiency and decarbonising their processes. That will only happen with the financial system’s support. So what has the FPC done to make sure the financial system supports business investment? Let me highlight two strands: removing barriers to long-term, stable funding for businesses, including to support the transition to net zero; and improving our understanding of UK businesses’ access to finance and ability to invest. The types of productive investment businesses need to make – to support long-term growth and transition to net zero – are long term. For businesses to commit to long-term investment they need long-term finance. Few CFOs will be happy investing in a multi-year project when its finance might not be rolled over next month. So to facilitate the type of investment we need, we need patient funding. That means pools of capital with the right long-term investment horizon, and well-designed investment structures to channel this capital into companies and projects that need it. The FPC has been active in both these areas. On pools of capital, we have worked with other UK authorities to set up the Productive Finance Working group, which brought together experts from across the financial services industry.

And given the interconnected nature of these markets, this is not a purely domestic challenge: UK borrowers are exposed to any deterioration in global risk appetite. One potential trigger for loss of investor appetite is so called ‘fallen angels’ – companies whose credit has been downgraded to sub-investment grade. This is a vulnerability the FPC keeps an eye on, as it could have amplifying effects – with forced selling and many investors scrambling to sell assets at the same time, either because investment mandates prevent them from holding such bonds, or to avoid higher capital requirements associated with riskier debt. There are various international and domestic efforts underway to improve our understanding of market based finance and to make it more resilient to stresses. The Bank, for example, is currently working on a system-wide exploratory scenario to consider bank and non-bank behaviour in a severe but plausible market stress, as well as the potential consequences of their actions. Corporate debt and sustainable growth I’ve talked about why the FPC cares about the supply of finance to corporates under its primary objective for financial stability. But in addition, and subject to meeting that objective, we also have a secondary objective to support the Government’s economic policy – sustainable economic growth. [4] Of course financial stability is a prerequisite for sustainable growth, so pursuing our primary  Page 9  objective helps us meet our secondary one. But the secondary objective broadens our interests in corporate finance.
On the contrary, monetary tightening works to constrain the growth of mortgage rates. They have risen far less than inflation. Unsecured consumer lending is rapidly expanding too. Banks often lure people with belowinflation rates — which may seem like an excellent offer. The borrower thinks: I take a loan for repairs and buy all the construction materials today, or else tomorrow they will be more expensive (indeed, prices have grown rapidly in this market) so I will end up overpaying less than if I bought the materials later. This is a typical situation. The same logic works with regard to other goods. And borrowers end up getting ripped off by a loan rate with an additional loan agreement attached, or through tied products forced on them. We are fighting this practice. Fines for misselling need to be raised. Banks should calculate the full cost of credit in such a way as to make all hidden fees visible to borrowers. It is an absolute priority for us protecting individuals’ rights in their interaction with financial providers. Now that inflation is above target, our action may even be tougher than before. It is important that we protect people from unnecessarily paying for openly pushed services they do not need and overspending on fees. I will spare you the details, but will say that we are developing regulatory measures to reduce consumer costs related to interaction with financial institutions. That would present an opportunity to improve people’s well-being, and we should use it.

The trust deed and prospectus of the PAIF, which comply with laws and regulations of Hong Kong and Singapore and are in line with international standards, served as a model for the drafting of fund documents for the ABF2 Single-Market Funds. This has helped to promote the adoption of international best practices among EMEAP economies. 2  BIS Review 79/2005  ABF and financial stability 15. Let me turn to the other question that I have been asked specifically to address, and this is how the ABF initiative can contribute to financial stability in the region. I must confess that, even though the central banks in the region have been enthusiastic in the development of the project, the benefits of ABF to financial stability in the region have not been clearly articulated in our deliberations. I can assure you, however, that this is not a reflection of any lack of brains on the part of Asian central bankers or because the objectives have not been clearly defined, although there may be a lack of a clear road map. But it should be all right, as Deng Xiaoping pointed out, to cross the river by feeling the stones. The lack of a clear linkage between ABF or indeed debt market development generally and financial stability is more a reflection of the difficulty of defining what financial stability is. 16.
The banking sector has maintained ample liquidity and capital levels thanks to the further rise in public deposits and added capital by parent banks. In terms of non-performing loans, obvious efforts have been made to restructure credit and sell off non-performing loans to non-bank financial institutions. The Albanian Association of Banks has played an active role in discussing the problems with relevant authorities and identifying solutions through the regulatory treatment of nonperforming loans, notably, the legal amendments to collateral execution process, which entered into force in September 2013. Through its activity, the banking industry may transform 2014 into a better year for both the banking industry and the Albanian economy. I think that this may be achieved through harder work in the following aspects: The first aspect pertains to restoring lending to adequate levels in Albania. This objective may be achieved by interlinking these three elements: a)  Cleaning up balance sheets from non-performing loans. It is indispensible that you should mark evident progress during 2014 to write off loss loans from their balance sheets and engage in cautious credit restructuring, where necessary. The improvement in the fiscal handling of loan write-offs, in the near future, is expected to better support this process; however, this does not justify the sluggish and protracted action. I, therefore, call for your utmost commitment to successfully implement projects initiated with the World Bank in this regard.

Additionally, quantitative objectives for reducing the level of non-performing loans should be included in your institution’s annual work plans for 2014;  b)  Evaluating and selecting new loan applications in a professional fashion. Indeed, credit demand remains weak; however, this exists and must be viewed in terms of its potential for growth in the future. In this regard, the banking industry should  BIS central bankers’ speeches  1  strengthen its analysis to steer lending toward those sectors of the economy with high development potentials. Priority should also be given to launching banking products that boost credit demand from small and medium-sized enterprises, mitigating credit risk through portfolio diversification and improving the stable return on bank lending; c)  Reducing lending costs. I refer to the interest rate applied to lek loans. To our opinion, it has inadequately reflected both the key interest rate trend and our expectations. From the decrease in the interest rates applied to government borrowing, we understand that the inert moves in the cost of lending reflect the risk premia the banking industry imposes when lending to the private sector.