samchain/econo-pairs-v1 huggingface dataset:
Enterprises with worldwide operations may be another. The economic indicators show a clear slowdown in growth in Europe’s industrial output. The effect on the Swedish economy has been severe, resulting in a record-low exchange rate. One Swedish krone now costs approximately 80 Norwegian øre. This is 30 per cent less than 10 years ago. Vulnerable emerging economies with high government debt must pay very high interest rates to borrow capital. Many central banks have reduced interest rates, most recently 17 and 18 September. Interest rates have been reduced because of the prospect of a downturn in each of these economies. Real interest rates are low in many countries. The inflation component that is driven by domestic wage and price increases is still high. Growth in Norwegian labour costs has been around 5-6 per cent in recent years. This is 1½ - 2 percentage points higher than among our trading partners. The higher interest rate level in Norway reflects this fact. At the moment, there is no clear indication of a marked slowdown in the Norwegian economy. The price of oil remained high for a long time, despite the international downturn, but fell more than USD 3 yesterday, 24 September. The price of aluminium has fallen somewhat but is still high compared with the average price in recent years. The year-on-year increase in the export of metals, excluding iron and steel, was 0.7 per cent in the second quarter of 2001.

3 Figure 2 shows that the flexprice gap occasionally differs somewhat from the GDP gap. The fluctuations in the flexprice gap have in general been slightly less, which is partly because the flexprice gap only captures the fluctuations in GDP that can be explained by sticky prices and wages. However, the flexprice gap and the GDP gap do provide a uniform picture of the recent development towards an excessively low level of resource utilisation in the economy. The fact that the flexprice gap is now negative is currently interpreted to mean that output is now lower than it would have been if prices and wages had adjusted to the changes that have recently affected the economy. Labour market gaps Another type of measure focuses on utilisation of labour. These are based on Statistics Sweden’s labour force surveys and on the National Accounts. Figure 3 shows two such measures: unemployment and the employment rate, that is, what percentage of the population of working age is employed. The curves provide a consistent picture of changes in resource utilisation over time. At the same time, they show that the crisis of the 1990s permanently raised unemployment and reduced the employment rate. This makes it difficult to determine what is a long-term sustainable level for resource utilisation in the labour market. From the perspective of general politics, it is normally regarded as an advantage if employment is high and unemployment is low.
Mr. McDonough describes the role of the FRBNY in the events leading up to private-sector recapitalization of Long-Term Capital Management Testimony by the President of the Federal Reserve Bank of New York, Mr. William J. McDonough, before the Committee on Banking and Financial Services of the US House of Representatives on 1/10/98. Good morning Mr. Chairman and members of the Committee. I am pleased to appear before you today to describe the Federal Reserve Bank of New York’s role in the events leading up to the recent private-sector recapitalization of Long-Term Capital Management and its fund, Long-Term Capital Portfolio. I will cover four points. First, I will provide some background on Long-Term Capital’s financial problems. Second, I will explain our judgment that an abrupt and disorderly close-out of Long-Term Capital’s positions would have posed unacceptable risks to the American economy. Third, I will explain the limited role we played in facilitating the privatesector resolution to this private-sector problem. Fourth, I will identify some of the issues that should concern us as we begin to understand the lessons of this experience. Background Long-Term Capital is an investment partnership that was started in 1994. It has many of the characteristics of a “hedge fund” in that it borrows money to leverage its capital and is only available to wealthy investors. The strategy of Long-Term Capital was to use complex mathematical formulas to identify temporary price discrepancies between different interest rates.

Because of this, during the first two weeks of September, concern about LongTerm Capital was a widespread topic of conversation in financial markets. It is a traditional and essential role for the President and senior officers of the New York Fed to be talking to, and receiving calls from, market participants regarding significant developments and potential dislocations. In fact, the partners at Long-Term Capital called me early in September to notify me of their difficulties and their discussion with investment houses about plans to raise new capital. By Friday, September 18, with the efforts to raise new capital still unsuccessful and with an increasing number of people now aware of Long-Term’s plight because of the efforts to bring in new investors - events seemed to come to a head. With market conditions particularly unsettled that day, I made a series of calls to senior Wall Street officials to discuss overall market conditions. Let me take a moment to put those calls in context. One important objective of the Federal Reserve is to assure financial stability. Particularly in times of stress, it is essential that the Federal Reserve continue to take the pulse of the market. One way to do that is through candid and open communication with key market participants. Everyone I spoke to that day volunteered concern about the serious effect the deteriorating situation of Long-Term could have on world markets.
It shouldn’t be so sure”, column in the Washington Post, 6 September, https://www.washingtonpost.com/news/wonk/wp/2016/09/06/larry-summersthe-fed-thinks-it-can-fight-the-next-recession-it-shouldnt-be-so-sure/ Woodford, Michael (2020), Effective Demand Failures and the Limits of Monetary Stabilization Policy”, NBER Working Paper No. 2776. 12 [15]  Diagram 1: Policy rates at the lower bound Per cent 3  3  2  2  1  1  0  0  -1  -1 10  12  14  16  Sweden  Euro area  18 USA  20 UK  Sources: National central banks and the Riksbank  Diagram 2: Inflation forecasts below target Per cent, yearly inflation 3,5  3,5  3  3  2,5  2,5  2  2  1,5  1,5  1  1  0,5  0,5  0  0 10  12  14 UK, CPI  USA, CPI  16  18 Euro area, HICP  20  22  Sweden, CPIF  Sources: BOE, ECB, Federal Reserve and the Riksbank Note. Inflation refers to the CPIF, the HICP and the CPI. Annual data. Inflation forecast for USA refers to the median of the members of the FOMC's individual forecasts. The euro area’s inflation forecast refers to the forecasts by ECB and Eurosystem employees.

As the world economy began feeling the brunt of the global financial crisis with the fall of Lehman Brothers in September 2008, public discourse in most countries called for a rapid and decisive policy response. In an unprecedented move, finance ministers from many OECD and emerging countries announced important fiscal packages in an attempt to revive the world economy. Chile was no exception, where the government implemented a fiscal expansion over 2% of GDP – in relative terms, among the largest in the world. Central banks, for their part, also implemented large monetary expansion measures to stimulate the struggling economy, first by lowering interest rates to their effective lower bound, and then, in many cases, by taking additional steps aimed at providing liquidity to seized financial markets. This was also the case of Chile, where we reduced interest rates to its lowest historical level, and then increase its expansionary stance by implementing nonconventional measures. This is a fundamental factor in Chile’s current strong recovery. The present challenge is the withdrawal of the monetary stimulus at an appropriate pace, which insures that inflation forecast is consistent with our target of three percent in a two year horizon. We are taking into account the different factors affecting the outlook, such as the behavior of the exchange rate, the strength of the expansion of demand and activity, and the perspectives of lower interest rates in the world, among others.
I will say something first about the trigger, and then about different resolution tools and strategies. The trigger for resolution Not a few people worry about the trigger for putting a firm into resolution – not too early, not too late. It is obviously important to get that trigger right. To my mind, the best way of thinking about it is that a firm should go into resolution when its time is up – when Recovery strategies are exhausted, and the firm just will not be able to  BIS central bankers’ speeches  1  reverse its decline into insolvency or lack of viability. How to frame that thought more precisely? Every country has criteria for authorising/licensing a bank. A sensible trigger for resolution would be when a bank no longer meets the criteria for being authorised and, crucially, when there is no reasonable prospect of its doing so again. That does not give a damaging degree of flexibility to the authorities; it is a demanding test. Some resolution strategies In the banking field, many resolution tools entail separating out a distressed firm into different parts. Separating bad from good assets; and separating essential from non-essential functions. The good and critical functions are sold and transferred to another bank (often known as “Purchase & Assumption”); or to a bridge bank pending such a transfer. The rump goes into administration, run down and disposal.

Moreover, the increasing in competition among commercial banks provides higher incentive for them to serve a wider range of customers, especially SMEs, who once have limited access to raise funds and relied on self-funding in a less-developed market. In another project to ease SMEs access to funds, the Bank of Thailand has set up the SMEs Database to reduce asymmetric information in the market and provide a more favorable business environment. Ladies and Gentlemen, The Bank of Thailand pursues the goal of sustainable well-being, and strong economic fundamentals are requisite to achieving this goal. We closely assess the growth, price, and financial stability in order to ensure our mandate. Meanwhile, to expand the growth frontier we consider thoroughly in all aspects to develop the financial system as a policy instrument, encouraging business to capture the rich opportunity from Thailand strategic location. In the soccer game of the economy, the Central Bank acts as Center Back. In order to safeguard stability during the recent circumstances, we have played a proactive role due to high economic uncertainty. Now that political and economic clarity is higher, the central bank will play a supportive role. At the back we can clearly see the whole field and choose a path to support the team’s offense, especially now that the government has gotten back to its position as the play maker to assist the private sector to reach the goal of achieving growth potential. Thank you. 4  BIS central bankers’ speeches  The resilience of the Thai economy 1.
4  BIS Review 33/2004  As the financial markets have built in expectations of a gradual return to more normal monetary and financial conditions, we have seen some adjustment in a range of credit spreads. A range of surveys has been reporting for some time that dealers and other financial intermediaries have generally reduced their exposure to rising interest rates. These adjustments are healthy. That their impact has been relatively contained so far may suggest that borrowers and lenders were less overextended relative to past periods, despite the sustained period of accommodative financial conditions. The fact that this process of adjustment has been relatively modest in overall impact also reflects the fact that it has occurred in an environment of growing confidence in the sustainability of the expansion and a consensus forecast for quite moderate inflation. Even so, risk managers need to continue to be attentive to the implications of further evolution in monetary and financial conditions. This overall picture suggests the supervisory community should continue to focus on the following priorities: •  Ensuring that overall capital levels provide a sufficiently strong cushion against risk. •  Encouraging firms to continue to strengthen the internal management and control infrastructure as it relates to risk management, the compliance function, and systems and technology. •  Improving the quality and integrity of public disclosure. •  Continuing to work toward a more integrated framework for supervision across the functional lines of financial activities within our markets, and globally as well.

For the Federal Reserve, this means that we will devote even greater attention to the institutions that now constitute the center of our financial system, as well as to the clearance and settlement backbone. It means we need to make a greater investment in looking at risks in the financial system as a whole, not just those that have their origin in banks. And it means that we will have to continue to intensify our cooperation with other supervisory and regulatory authorities. The U.S. financial system is of course only as strong as our economy as a whole. Overall, the fundamentals of the U.S. economy look quite strong. But the size of our fiscal deficit, and the risks posed by our large external imbalance, place a greater burden than would otherwise be the case on the credibility of U.S. monetary policy. In this context, it is particularly important that we preserve the high degree of confidence that now seems to exist that U.S. monetary policy will respond appropriately to the evolving balance of risks in the overall economic outlook, and particularly that we will maintain price stability. This is critically important to sustaining the current expansion, and to sustaining confidence in U.S. financial markets over time. And getting monetary policy right is one of the most important things we can to do contribute to financial stability as well. BIS Review 33/2004  5
Ravi Menon: Net zero - act now, act fast, act together Keynote speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the COP27 Singapore Pavilion Finance Day, Sharm El-Sheikh, 9 November 2022. *** Good morning, ladies and gentlemen. Welcome to the Singapore Pavilion's Finance Day, hosted by the Monetary Authority of Singapore (MAS). Climate change is no longer a prediction, it is becoming a reality. The frequency and intensity of today's extreme weather events have exceeded early climate models. We are in a race for our lives, to reach net-zero greenhouse gas emissions by 2050. Unless we act now, act fast, and act together, we will lose that race. We need to act now to start reducing emissions. The world is currently far from a net-zero emissions trajectory. Global greenhouse gas emissions are still rising, not falling. If we do not act now to start decarbonising, we risk breaching tipping points that will lead to catastrophic and irreversible climate change, with unimaginable risks to lives and livelihoods. We need to act fast to finance the transition to net-zero. Decarbonisation is a costly affair. We must also balance decarbonisation and development. The world requires significant financing for sustainable development and new technologies to reach net zero by 2050 - by some estimates, $ trillion annually. This is $ trillion more than the annual investment today. And we need to act together. The climate challenge is too big for governments or any one country to solve.

It has proved difficult to show that attempts at short-run exchange rate stabilisation, using either the repo rate or interventions, have been particularly successful. Neither does experience from other countries with a flexible exchange rate provide all that much support for such a policy. At the same time, increased credibility has made the gradual modification of the Riksbank’s view easier. The Riksbank has accordingly chosen to be comparatively inactive in the currency market. At the same time, an exchange rate that is highly volatile and displays pronounced fluctuations clearly has drawbacks; the uncertainty it generates is liable to spread to other financial markets, besides complicating corporate and personal decisions about investment, production and consumption. In recent years the Riksbank has therefore occasionally chosen to intervene in the foreign exchange market in order to underscore its appraisal of the situation. It need hardly be said that if such interventions had been judged to conflict with the inflation target, they would never have been considered. As long as the Riksbank targets inflation directly, I see no reason to change the current principles for our behaviour in the currency market. But I also want to underscore that the approach to the exchange rate in an inflation targeting strategy is by no means self-evident. Some central banks that target inflation—the Bank of Canada is one example—seem to react to short-run exchange rate fluctuations more frequently, sometimes guided by a monetary index, partly with the aim of stabilising markets and expectations.
A consistent implementation of this policy, with an inflation target, clarifies the rules of the game for wage formation. High wage increases are liable to boost inflation, which necessitates higher interest rates. The inflationary consequences of the wage increases can be modified if productivity growth is good, as has been the case in recent years. But at least a part of this productivity growth is achieved at the expense of jobs; this is one aspect of the process whereby higher labour costs generate stronger rationalisation and maybe also an increased capital input. In this way, too, and not just because the higher interest rates directly affect demand and employment, a rapid wage rise is liable to endanger jobs. Against this background, the outcome of the latest wage negotiations is better than in earlier years. Agreements for the next three years have been concluded at levels around 3 per cent a year. It has been said that this takes wage drift into account but that is probably not entirely the case. Instead one should no doubt count on wage drift averaging around 1 per cent. The average annual wage outcome in the period 1998–2000 would then be 3.5 to 4 per cent. This does still represent some downward shift in the rate of wage increases, which in turn assists the Riksbank’s task of ensuring low inflation. All else equal, we can allow ourselves a somewhat lower level of interest rates and a somewhat stronger growth of demand.

In this period there have been only two occasions when the krona has fluctuated more than 2 per cent against the German mark. Managing transitory effects The subject of the Riksbank’s attitude to the inflation target is also raised from time to time in the media. It has been claimed that the Riksbank shows less concern about inflation moving outside the tolerance interval’s lower limit than it does about the upper limit being exceeded. That is not the case. A couple of years is too short a period on which to base arguments that deviations from the targeted rate are a sign that policy has not been symmetric. Monetary policy work involves a lot of uncertainty, which is no doubt inevitable when the interest rate has to be set on the basis of forecasts that extend several years into the future. At present, moreover, assessments are particularly difficult so soon after the changeover to a low-inflation regime, with all that this may involve in the form of altered behaviour by households and firms. Another complication is that in recent years, inflation throughout the world has been lower than expected. Another aspect of this issue is the Riksbank’s choice of a target variable. Every conceivable indicator of inflation has its shortcomings and these have to be weighed against the advantages when choosing monetary policy’s target variable. The consumer price index (CPI) has the advantages of being well-known and established among economic agents and people in general as a measure of inflation.
Recently, however, the introduction of CREST and RTGS, and the European work on TARGET, has expanded on our work considerably. These maps cannot easily convey a sense of the dynamics of change in central banking. Central banks are evolving creatures, which respond to political and economic forces around them. One unusually powerful force, which will change their environment fundamentally, is EMU. But before considering its impact, I would like to consider the state of play in the rest of (non-EU) Europe, where exciting transformations of a different kind have occurred in the last decade. Turning socialist state banks into central banks The central banks of the formerly planned economies of central and eastern Europe have generally developed important responsibilities in each of my five areas (Figure 3). The old state banks have been transformed to fill the vacuum left by the dissolution of the mechanisms and institutions of a planned economy. Most had extensive branch networks and already operated rudimentary payment systems - though transfers often relied on correspondent banking relationships and slow and unreliable postal systems. But under the old regime there was little if any requirement for the other functions - setting interest rates, managing government debt, and supervising banks. Instead the main roles of the state banks had been the provision of banknotes; and making the financial transfers between state enterprises inherent in the central economic plans. The perceived importance of cash, and the bookkeeping culture, still influence to varying degrees their successor institutions.

At the Bank of England we take a lot of interest in comparative efficiency: we are determined to be a value for money central bank, and benchmark ourselves against others wherever possible. Some of the data we use are confidential: central banks are more candid with each other in private than they are in public. But there are a few published measures. A study in 1995 by Fry, Goodhart and  BIS Review 33/1997  -9-  Almeida3 of a sample of 30 central banks, largely from developing countries, tested twelve variables as possible explanations of non-supervisory staff numbers. Most significant was a country’s population, with an elasticity of one half, confirming substantial economies of scale across the sample countries. There were positive relationships with real per capita income (central banking appears to be a luxury good! ), the number of branches, and the use of exchange controls (both of which would increase staff needs). Perhaps surprisingly the more independent central banks seemed to employ fewer staff (perhaps that could be the basis of an accommodation with Gordon Brown!). Amongst the variables which showed no relationship was the inflation rate (though there could be a simultaneity problem here). Figure 4 shows the numbers of staff employed two or three years ago by the central banks of various industrial countries and some of the transition economies.