samchain/econo-pairs-v1 huggingface dataset:
Completion of the crisis-initiated reforms of the policy framework As I have already highlighted, the policy reforms initiated in response to the financial crisis are not yet complete. While the basic frameworks for risk-based capital and, more recently, liquidity are now largely settled, many of the other reforms I noted earlier remain very much a work in progress. To ensure that the weaknesses in the regulatory framework brought to light by the financial crisis do not persist for any longer than necessary, the Committee is aiming to have much of this work completed by the end of 2014. This is an ambitious target, but given the importance of these reforms, there is no basis for unnecessary delay. Our plan is for the leverage ratio work – which is largely devoted to the detailed specification of the exposure measure (ie the denominator) of the ratio – to be largely completed this year, while the NSFR, trading book, securitisation and large exposures policy work will be finalised in 2014. The Committee also has two other major policy initiatives that it plans to launch soon. While not obviously thought of as immediate and essential responses to the financial  BIS central bankers’ speeches  3  crisis, they are nevertheless quite important for ensuring that the overall prudential framework remains robust, and existing reforms are effective.

In addition, the use of local currency in regional trade and investment has been promoted to lower business transaction costs and mitigate volatility of the major currencies. We hope that policy to strengthen financial connectivity with our neighbors will facilitate closer economic integration for the shared benefits of the region. The second plan is the Payment Systems Roadmap. The plan is aimed to promote safe and efficient electronic payment services with new technologies and innovation, with a view to reducing transaction costs, improving governance standards, and being supportive of expanding economic activities. In particular,  BIS central bankers’ speeches  3  integrated payment channels, such as mobile phones, internet, debit/ credit cards, and emoney along with a competitive fee structure, will support e-Commerce/ m-Commerce and benefit both businesses and consumers alike. The Bank of Thailand will also continue to work with regional regulators to advance payment systems connectivity to support international trades, labor movements, and tourisms. Under this roadmap, the Bank of Thailand has worked closely with the government to advocate the idea of digital economy by taking a lead in the National e-Payment Plan to promote Any ID infrastructure and debit card usage. Development of a new payment infrastructure as the “open architecture” to allow network interoperability among various types of players will lower payment fees and discourage the use of cash, thus resulting in much lower operating costs and higher efficiency for the corporate and banking sectors.
Christian Noyer: Monetary policy and macroprudential policy Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the conference on “The future of Monetary Policy”, Rome, 1 October 2010. *  *  *  Ladies and Gentlemen, It is a great pleasure for me to be here today at this joint Banca d’Italia, Einaudi Institute and Banque de France conference, which has provided a lot of stimulating ideas on the future of monetary policy frameworks. In my intervention, I will start with some reflections on the relationship between the objectives of price stability and financial stability, and I will then proceed to discuss several issues concerning the joint implementation of, and the interaction between, monetary and macroprudential policies. I. General considerations on the relationship between financial stability and price stability  Both the experience of the last decades and, looking much further back, economic history provides a useful perspective on the relationship between price and financial stability: first, price stability is not a sufficient condition for financial stability but second is necessary; third, a key reason why the authorities in charge of monetary policy have a stake in maintaining financial stability is that financial instability may give rise to “tail risks” to price stability. Let me elaborate on these two issues in turn. A.

BIS central bankers’ speeches  1  The challenge for most individual euro area countries is obviously to achieve strong fiscal consolidation while ensuring long-term growth. Clearly for me, there is no contradiction between these two objectives. On the contrary, they are complementary. The efforts already made on the fiscal front by the euro area are already bearing fruit: not only is the absolute level of the euro area’s deficit half that of elsewhere, but also the pace of fiscal consolidation is actually much greater. It is clearly an asset for us today and an element of confidence both for the markets and economic agents, which needs to be further enhanced. But, by the same token, countries need to create the conditions for a strong and sustainable growth through strong structural reforms. Here as well, the progress already made in many countries is important but more needs to be done, notably with regard to the labour and goods and services markets. Beyond these national efforts, I believe that what the euro area really needs today is to make progress towards a more coherent and integrated economic and financial union. Indeed, the crisis has clearly brought to the fore a number of weaknesses in the functioning of the euro area and has thus fuelled concerns. First, the fiscal discipline mechanism through peer pressure as established by the Stability and Growth Pact proved to be weak. Second, the euro area did not equip itself at the outset with an instrument for monitoring competitiveness.
With respect to welfare benefits, the Stability Programme reflects the 1.6% settlement for the revaluation of public pensions, both in 2018 and 2019. This increase will be 3% this year, 2018, in the case of minimum and non-contributory pensions. I shall later return to this. In any event, given the trend growth in the number of pensions and the substitution effect arising from the new pensions replacing those that are terminated, which are generally higher than was earlier the case, the forecast growth in the budget earmarked for welfare benefits in 2018 (3.7%) may also be surpassed. Among the remaining expenditure items for this year, goods and services purchases will notably continue to be contained, and interest payments to decline, while there will be a significant increase in public investment. This latter development is partly in response to the inclusion in 2018 of the expenditure associated with amounts for which the government may be liable under the insolvency-related legal proceedings currently affecting certain toll motorways. But even after adjusting for this effect, public investment is expected to be more expansionary than other items, as was the case in 2017. All told, public investment is expected to stand at 2.1% of GDP in 2018, excluding the temporary effect arising from the above-mentioning legal proceedings, a level far below the average for the previous two decades, which was 3.6%. Overall, it may be concluded that the attainment of the budget deficit target for this year, namely 2.2% of GDP, is subject to significant risks.

This would be partly offset by the introduction of a new tax on certain digital services, which might contribute to raising resources by around € million in 2018 and by € billion in 2019, according to the Programme. However, this new instrument is still relatively undefined, meaning it is difficult to judge its tax-raising potential. Overall, and as stated in my last appearance before Parliament in relation to the Budget, achieving the public revenue targets for the current year, 2018, will entail a greater response by tax revenues to growth in economic activity than has been historically observed. As regards the expenditure forecast for 2018, its more expansionary trend relative to previous years is mainly due to the agreements reached on employment and compensation of public-sector employees, on one hand, and on the revaluation of pensions, on the other. 6/9  The agreement reached by the Government with the main trade union organisations includes an increase in public-sector employees’ remuneration of 1.75% in 2018, plus additional funds for targets and specific bodies that might entail a further 0.4 pp increase in total gross wages. In the following years, to 2020, there would be even higher increases than these. The budgetary plan also includes an extension to the hiring policy of the last two years, raising replacement rates in some sectors and enacting additional measures affecting working hours and temporary employment. Against this background, the estimated 2% increase in public-sector employees’ remuneration in the Stability Programme for 2018 will probably be surpassed.
The latest study by the FSI on the application of Basel II, published in September 2006 and conducted among 115 countries, shows that 82 Non-Basel Committee Member Countries intend to implement the new framework, in most cases as of 2008 or 2009, and in some cases at a later date. Fully aware of the practical aspects of implementing a more modern, complete and risk-sensitive prudential framework, the Basel Committee published, in July 2004, i.e. directly in the wake of the New Capital Accord, a document entitled “Implementation of Basel II: practical considerations”. Recognising that the adoption and application of Basel II may not be a short-term priority for a certain number of supervisory authorities of non-G10 Countries, the Committee encouraged the latter to develop their own approaches and implementation timetables. Given that the necessary legislative and regulatory changes and human resource requirements have to be identified, the application of Basel II will necessarily be a gradual process throughout the world. This is especially the case since technical decisions often have to be taken on the exact choice regarding the scope of application of Basel II or the possibility of a staggered implementation of the three pillars. In this respect, I welcome the choice made by Algeria to adopt and implement Basel II in the near future. This choice should not be seen by banks as a regulatory constraint but rather as a great opportunity to converge towards best international practices.

The New Keynesian IS curve in the euro area This brings me to the second channel I would like to discuss this morning: the effects of monetary policy on real economic activity. 7 / 14  BIS central bankers' speeches  Much of our attention recently has been focused on the properties of the Phillips curve – that it may be flatter, non-linear or mis-specified in terms of the relevant economic slack. By now, we are fairly confident that non-linearities and broader labour market slack are likely to explain much of the weakness in inflation as of late.10 Some observers have interpreted the lack of stronger price pressures as a failure of monetary policy to stimulate the economy. They argue that persistently low inflation is testimony to the ineffectiveness of non-standard policy measures. If this were true, then also the reasoning behind the shock-based exchange rate pass-through would in part be misguided. I would argue, however, that such claims reflect a serious misunderstanding and simplification of how monetary policy works. There are very few instances, such as through the exchange rate, where policy can directly affect prices. In most cases monetary policy transmits to prices through its impact on the intertemporal allocation of consumption, savings and investment. If prices are slow to adjust, a cut in the key policy rate lowers the real interest rate, which, in turn, stimulates interest-sensitive spending.
Although the world economy froze significantly in the last year, other important dimensions of the external scenario, such as the terms of trade and international financial conditions, took a course that is favorable to us. Actually, Chile’s economic performance has been quite different from that of many other countries. The main advanced economies are still struggling with the consequences of the financial crisis that resulted in the world recession of 2009. They have a long road ahead to resolve the imbalances and weaknesses associated with this situation before they can resume sustained growth. The Eurozone countries have made progress in resolving their fiscal and financial problems, as well as strengthening the institutional pillars of the monetary union. These steps have been welcome by the markets, but the efforts must continue. Achieving a solution is a slow, costly and complex process, considering the great number of players involved. There is also the ongoing deterioration of the economic situation, which only makes things worse and complicates the required adjustments. Countries suffering negative growth rates and high unemployment for too long already cannot easily implement new austerity measures. Furthermore, the core European economies, which until recently had been relatively spared of the recession of the peripheral countries, have begun showing signs of weakness. Accordingly, the risks in the Eurozone remain. In the United States, the recovery of output and demand is weak, insufficient to quickly absorb its high unemployment.

This type of developments could create vulnerabilities in the real estate and construction industry, or in those households searching for a new home. It is also worth noting that the current combination of higher property prices, low long-term interest rates, favorable lending standards and higher volatility of other financial asset categories, configure a scenario that could motivate an increase in financial investment in the sector, potentially exacerbating these risks. Therefore, we have stressed how important it is that agents consider these risk factors when evaluating their investment and lending decisions in the sector. In particular, these decisions need to bear in mind that past price increases are no guarantee of further increases in the future. We believe that raising this type of alert, thus increasing the amount of information available for risk assessment, is part of our role of promoting the normal functioning of the  BIS central bankers’ speeches  5  financial system. We believe that the extended discussion that has taken place on the topics of the real estate sector is extremely valuable. Another risk factor requiring close attention is the evolution of medium-sized banks. Recently, credits granted by these banks have increased faster than those of other banks (figure 8). There is certainly a positive side to it, as it implies lower concentration of risks in the system. However, its growth dynamic could become a source of vulnerabilities.
Robert T Parry: Monetary policy in a new environment - the US experience  Speech by Mr Robert T Parry, President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, at the Joint Bundesbank/BIS conference on “Recent developments in financial systems and the challenges for economic policy”, held in Frankfurt, 28-29 September 2000. *  *  *  It’s a pleasure to have this opportunity to give you a US perspective on the challenges of conducting monetary policy in an environment of structural change. In the US, there is, of course, no modern-day parallel to the historic events in the financial sector here in Europe. The formation of a monetary union and a multinational central bank poses precedent-setting challenges for policy. At the same time, the US has seen massive and rapid changes in its financial sector. I’ll argue, however, that while these changes in the US financial sector have posed challenges, they have not posed significant problems for the Fed’s conduct of monetary policy for quite some time. Of course, financial change was a major issue in policy 20 years ago. At that time, financial deregulation and innovation undermined the stability of the monetary aggregates, which were a central part of Fed policymaking. Since that history is probably familiar territory to you, I plan to review it only briefly. The bottom line is that by the mid-1980s, we had relegated the monetary aggregates to a minor role.

Asia’s urban population has risen from 33% of total population in 1990 to 43% in 2010. The United Nations projects that Asia’s urbanisation rate would rise to 56% in 2030, and further to 64% in 2050. Accompanying this urbanisation has been the growth of mega-cities with populations exceeding 10 million. Twelve of the world’s 21 mega-cities are in Asia, including Tokyo, Delhi, Mumbai and Shanghai to name a few. Urbanisation has become particularly more pronounced in Malaysia during this period. The proportion of the Malaysian population living in urban areas has increased from less than 50 percent in 1990 to more than 70 percent in 2010, and is expected to rise further to 75 percent in 2020. The improved education and higher income levels that has come with urbanisation has enhanced opportunities for greater access to financial products and services. Indeed, financial institutions and markets have responded to the changing profile of financial consumers by offering a broader range of financial instruments and providing convenient access to meet the changing consumer preferences. It is recognised however that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen. Balanced growth is therefore an important imperative if socio-economic progress is to be achieved and if conditions that limit opportunities for employment and which deepen inequalities of income and wealth are to be avoided.
It appeared probable that the dollar would depreciate as it was difficult to believe that the United States would be able to maintain its deficit indefinitely, 2 and the real exchange rate normally weakens when a current account deficit needs to be corrected. And the dollar’s status as a reserve currency throughout the world made the entire global economy sensitive to rapid changes in the dollar rate. Although a dollar crisis did not occur, the analysis was reasonable. Substantial and persistent current account surpluses or deficits may be a sign of an underlying weakness or imbalance in the economy. Even though global imbalances have subsequently declined, this is due more to cyclical factors than to structural factors. They have also increased again recently in pace with the recovery of the global economy. The International Monetary Fund (IMF) continues to monitor the development of global imbalances and says that an adjustment of these imbalances is necessary if the recovery is to rest on stable foundations. 3 The association of developed countries and emerging economies that goes under the name G20 has therefore decided to perform thorough analyses when surpluses or deficits become substantial, in order to determine whether the country concerned should take measures. In the risk survey conducted by the Riksbank in May this year, in which participants on the Swedish fixed-income and foreign-exchange markets were asked to assess the risks to the Swedish financial system, global imbalances were seen as the greatest risk.

The distribution of euro banknotes and coins had been well prepared in all countries of the euro area well before 1 January 2002. Euro banknotes – particularly the smaller denominations – had to a large extent been distributed in advance to banks and retail traders, beginning in September 2001, and the coins were distributed mainly to retailers and the general public in December. Without this preliminary work, the logistics of the transition would have been much more complicated, so frontloading can be considered a decisive factor in the successful outcome. The countries chose slightly different methods the frontloading of coins; e.g. in the Netherlands a major investment was made in providing a free set of coins to every citizen over the age of six years, while other countries sold sets of varying sizes at their face value. In this way, the euro coins soon became familiar to the general public and created an interest in the new currency. In Finland the central bank exchanged "company packages" equivalent to FIM 2,000 and containing both banknotes and coins, with the aim of preparing small companies for the transition. Common to all of the countries involved was that they supplied the retailers with large amounts of coins so there would be no shortage of change during the transition. Another important factor in the cash changeover was the ATMs, as a large part of the euro banknotes was distributed via these.
The rate of increase has varied this year between 7 and 10 percentage points a year according to Statistics Sweden’s real estate price index. As I see it, there are several factors of a partly structural nature behind this development. One is the decline in interest rates, which is largely a result of the economic policy conducted. The fact that credit markets have been deregulated in recent decades and become more efficient has also created more beneficial conditions for household borrowing. These driving forces have been similar in many countries, although they have occurred at slightly different points in time. The fact that households have increased their indebtedness can to some extent also be due to the changeover in economic policy that took place in Sweden at the beginning of the 1990s, with a focus on price stability. Public finances were consolidated and an inflation target was introduced. Confidence in the low-inflation policy was established gradually and has brought greater stability to the economy, with lower inflation and interest rates. A more stable economy makes it easier to predict future developments in interest rates and inflation. This can in turn mean that the risks connected with slightly higher indebtedness are perceived as smaller. In recent years, household loans have largely been used to buy housing. The fact that the increase in lending to households has gone hand in hand with rising property prices is therefore no surprise.

I recall that, shortly after my appointment as governor in September 1991, I received, from a World Bank expert, the first report regarding the transition from a mono-banking system, common to a centrally planned economy, to the two-tiered banking system (central banks – commercial banks) we have in place today. Truth be told, if I were to mention all the partners and friends from the World Bank, with whom I have worked over the past 30 years, I would exceed my allotted time. The World Bank provided support on multiple fronts. This has been highlighted by the previous speakers and I will not repeat what has already been said. However, there is something that I would like to emphasize. The transition from a centralized economy to a market economy entailed not only loans and financing, but also new laws, building new institutions and good practices. Access to the World Bank knowledge and expertise helped Romania to implement the reforms that followed. 1/2  BIS - Central bankers' speeches  In this context, I would mention two of the World Bank's programs, that have contributed to the development of the Romanian financial and banking system: the Financial and Enterprise Sector Adjustment Loan (FESAL) – a program that focused on reforming the financial sector, and the Private Sector Adjustment Loan (PSAL) – which has offered support towards the privatization of the Romanian banks and to the development of the monetary and capital market, in line, as well, with our objectives of European integration.