samchain/econo-pairs-v1 huggingface dataset:
Matters would be different if the effects in question were temporary, so that they only affect the price level for a year or so. In that case there might be grounds for disregarding them. But deregulations and increased international competition are presumably as much a part of the inflation process today as were the opposite effects that increased employer contributions and other taxes exerted in the 1970s and 1980s. 3. Why have a rule of action? The Riksbank formulates monetary policy primarily on the basis of a forecast of inflation one to two years ahead. If inflation, measured as the annual change in the CPI, is expected to be above 2% during this time horizon, the interest rate is normally increased and vice versa. This rule of action is intended to: •  make policy more intelligible;  •  act as a support for internal decision-making;  •  enhance external credibility. The rule of action has been an important support for the Riksbank in recent years. Besides helping to make monetary policy more intelligible, it has contributed to a tighter analysis and a more structured internal discussion. But a simple rule such as this clearly cannot be applied mechanically. A noteworthy aspect is the time horizon to which the rule refers. The Riksbank is required to maximise goal fulfilment, that is, to keep inflation in line with the target, for ever.

Ladies and gentlemen, I hope that some of my more general comments on the deficiencies of the current regulatory “push” have not ruined your motivation for this meeting. I wish you every success in your work. BIS central bankers’ speeches  3
At the same time, the existence of fierce competition for good customers makes it difficult to raise lending rates. A second factor putting pressure on profitability is the still low level of banking activity. In fact, despite the improvement in recent years, year-on-year growth in lending to the private resident sector remains negative, standing at -4% at the end of 2016. Another factor is the still significant volume of non-productive assets (non-performing and foreclosed) on bank balance sheets. The good news is that this volume is falling – last year it fell by 9% –, which translates into lower provisions. Finally, as a result of the financial crisis there has been an increase in the regulatory pressure to which banks are subject. The tightening of the minimum capital requirements for banks, in terms of quantity and quality, has not been accompanied by an equivalent reduction in the perception of the riskiness of banking business, so that its cost of capital remains high and exceeds its profitability. Moreover, the stricter prudential requirements are compounded by the obligation to comply with the new resolution regulations, which requires banks to have a minimum level of liabilities enabling losses to be absorbed should this be necessary (MREL). Again, complying with this minimum volume of liabilities will not be cheap and may in fact be particularly difficult for those banks which, as a consequence of their business model, do not have the necessary experience of issuing this type of instrument.

There may be costs arising from investments in innovation that fail to bear fruit or from investments with payback cycles that end up being much longer than expected, as apparently may be the case, in principle, of some of the initiatives being developed in relation to Distributed Ledger Technology. And risks relating, inter alia, to personal information privacy, fraud or cyber-attacks. In addition, the proliferation of new technologies may also lead to the financial exclusion of those users at a distance from them, who could be adversely affected if the continuity of service provision through traditional systems is not guaranteed. In short, we are facing great technological change in the banking industry, the effects of which are still not clear. The development of new services is a great opportunity for renewal for the more dynamic banks, as it may provide them with efficiency improvements and mean that they can offer greater services to their customers. And, improving customer service is precisely one of the main challenges facing the banking industry, which brings me to the final point of my address: the importance of maintaining the confidence of bank customers. 5/7  3 Confidence Confidence is the most important and the most fragile of a bank’s assets and determines the nature of its relationship with its customers, beyond the ambit of mere commercial transactions. Bank customers deposit their savings with credit institutions, trusting that they will return those savings to them, when they need them, on the terms agreed.
To do so, let us initially examine a snap shot of our economy in 2005. Growth in 2005 was 6.2%, with the average growth for the 7 years, 1999 to 2005, being 4.3%; Foreign reserves were around $ 2.7 billion, or about the equivalent of 2 ½ months imports; The country was at the mercy of a ruthless terrorist group and on the brink of war; Unemployment was at 7.2%; Poverty was at a level over 15%; Inflation was on a sharp rising trend; The banking system was vulnerable and displaying several worrisome cracks; Public debt to GDP level exceeded 90%; Per capita income was under $ GDP was around $ billion; The Western Province share of GDP was an overwhelming 51%; Infrastructure development was almost non-existent; The fiscal deficit was over 7% although very little infrastructure development work had been carried out. All in all, a rather bleak picture, and worse still, a bleak outlook.

Had this happened, the króna would probably have plunged in the meantime and not recovered before prices and wages had adjusted. But the problem was not restricted to non-residents. Residents, including Iceland’s pension funds, allocate substantial funds that must be invested on a continuous basis. With the economy paralysed and the Treasury’s ability to fund a large deficit over the next few years uncertain, domestic institutional investors also became reluctant to invest in domestic assets. Under these conditions, central government financing would have been extremely challenging, which would have undermined exchange rate stability still further. The third reason for the capital controls was the shaky balance sheets of the newly established financial institutions and the other financial firms that survived the onslaught, however briefly. Their balance sheets were fraught with uncertainty and potentially unstable. BIS Review 138/2010  1  A considerable share of their deposits could prove unstable as well. The balance sheets of households and businesses were likewise in a state of disarray. In the absence of exchange rate stability, it would be extremely difficult to restructure the finances of Iceland’s households, corporations, and banks. Prerequisites for capital account liberalisation The foregoing discussion should make it clear that the capital controls will not be lifted in full until confidence has been restored to the extent that their removal will not cause prolonged instability.
Emerging economies are better prepared than in the 1990s to absorb these shocks, but we do not expect the subsidy coming from the commodity windfall. One final point about China  China has become a source of stability in the world economy in the last few decades (isn´t this the role China played after the Global Financial Crisis in 2009 and 2010? ), but it has become more interconnected with the rest of the world, and it is also subject to pressures on the capital account and its balance of payments. The very same risks that emerging economies face from US rate increases are relevant for China, too. This time, a bumpy process of monetary normalization in the US could become amplified rather than ameliorated, depending upon how China is able to adjust to it. And this time, the room looks smaller.

 Thank you  4  Figure 1 Panel A: Federal Funds Rates (percent) 9 8 7  Fed fund  1994  2004  2015  1999  6 5 4 3 2 1 0 90  92  94  96  98  00  02  04  06  08  10  12  14  16  Source: Bloomberg  Panel B: Fed Funds Hiking Cycles (percentage points) 4,5  1994 1999 2004 2015 (Futures) 2015 (FOMC)  4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0  0 2 4 6 8 10121416182022242628303234363840424446 0  1Y  2Y  3Y  Source: Bloomberg  5  Figuree 2 Panel A: Spread 10 0‐years and 2‐years, US G Government Bonds, basiss points (*)  (*) Red mark indicates th he start of the 1999 cycle.
And as the editorial of the November issue of the Institute’s journal Financial World goes on to explain, “It is the mood that has fundamentally changed and this change is why, though governments may pump money into banks, share prices are still weak. It is why central banks are cutting rates but Libor is staying put. It is also why, despite public money to provide liquidity to markets, to guarantee bond issues and even to take stakes in banks, stock markets continue to drop like so many stones.” Perhaps this is happening because, as former ECB Executive Board member and Italian Economy Minister, Tommaso Padoa Schioppa aptly put it, this is not a crisis in the system, it is a crisis of the system. As tales of woe beyond our shores multiply, it is appropriate to take stock of what this systemic shock could mean for Malta. First, some background. Our financial system has changed beyond recognition in recent years, driven by a combination of domestic market reforms and international integration. The liberalisation process of the 1990s saw the gradual removal of interest rate restrictions, the easing of capital controls and the privatisation of most of the financial sector. The legal framework was entirely overhauled, bringing it in line with EU standards and laying the foundations for the growth of new areas of financial activity, such as investment services and trusts. EU membership in 2004 opened up the Maltese financial market to service providers from other member states.

For example, only about 20 percent of the respondents to the July NABE business conditions survey indicated their firms face shortages of skilled labor. 11 And if skills mismatch was a large ongoing problem, we’d expect to see wages rising much faster for those with the skills in excess demand. Here, there is evidence of larger wage increases in some occupations, but the degree of wage-growth dispersion does not appear to be unusual. Wages Indeed, wage growth in general continues to be very modest–at a bit over 2 percent per year. That is a long way from the 3 to 4 percent benchmark implied by productivity growth and our inflation objective. Indeed, over the past three years, the unemployment rate has fallen by a percentage point per year; yet real wage growth has barely budged. It’s hard for me to imagine a full labor market recovery without genuine improvement in compensation growth. But am I wrong? Has the wage Phillips curve completely broken down? Some claim the answer is no – you just have to look at the right measure of unemployment.
Similar to IOER for banks, ON RRPs provide a risk-free overnight investment directly to a broad range of bank and non-bank counterparties. By reaching financial institutions that are ineligible to earn IOER, an ON RRP facility widens the universe of counterparties that should generally be unwilling to lend at rates below those available from the Fed. Such a facility could also enhance competition in money markets by offering an alternative safe investment and thus  6  Moreover, competition may be imperfect in some money markets currently, allowing spreads to persist longer than they would if markets were more competitive. For example, much money market activity is over-thecounter, potentially leading to search frictions and bargaining. Anecdotal evidence suggests that lenders typically interact directly with a relatively small number of counterparties, perhaps because a portion of the activity is derived from costly relationship lending. Finally, to limit counterparty credit risk, lenders sometimes seek to diversify their lending and apply concentration limits, which are often binding. 7  As I’ll explain, high-frequency variation in balance sheet costs could induce high-frequency changes in the pull of IOER and, in turn, the spread between the IOER and money market rates. We see this transitory dynamic around financial statement reporting dates. On these dates, balance sheet costs for some banks increase, and the fed funds rate and other money market rates fall relative to the IOER rate.

However, such transitory movements should have no material effect on financial conditions or the broader economy. What matters for policy transmission is the predictability that on most days money market rates will be close to the target range set by the FOMC. 13 Of course, if rates were to move substantially outside the target range and those changes were expected to persist, the Fed would take appropriate action to assure that its intended stance of policy is achieved. In addition, as highlighted in minutes to the Committee’s recent policy meetings, an operating regime with a reasonably large positive spread between the IOER and ON RRP rates would support active trading in the funds market like we see today, and would likely prevent the Fed’s involvement in the repo market from growing too large. This would, in turn, lessen the possibility that patterns of financial intermediation could be altered in unanticipated and potentially undesirable ways by the Fed’s actions. Recent changes to the overnight RRP test exercise Now I’d like to return to the ON RRP testing that the Fed has been conducting over the past year, and discuss the changes to the testing exercise that were introduced following the September FOMC meeting. You’ll recall that we began testing ON RRPs in September 2013, when the Committee instructed the Desk to examine how a potential ON RRP facility might work and how it might affect short-term interest rates.
Chile) External prices (in $  1.9 2.9 3.1 2.5 1.5 6.7 1.8 -1.5 -2.7  4.7 3.3 3.4 2.8 2.2 6.5 1.7 1.1 2.4  LME copper price $ WTI oil price $ Brent oil price $ Gasoline parity price $ Libor $ (nominal, 90 days)  221 43 44 389 0.7  255 50 53 453 1.5  Sep.17 Report  2018 (f) Jun.17 Report  2019 (f) Sep.17 Report  Sep.17 Report  (annual change, percent) 8.5 -0.5 3.5 3.4 3.6 3.5 2.9 2.9 2.1 2.3 6.7 6.3 1.9 1.7 1.1 2.2 3.2 1.4 (levels) 275 250 49 51 52 53 450 447 1.4 2.5  0.0 3.5 3.6 3.0 2.3 6.4 1.7 2.1 1.6  -1.8 3.4 3.6 2.9 2.2 6.1 1.7 2.4 2.3  275 49 52 440 2.3  270 49 52 435 3.0  (f) Forecast. Source: Central Bank of Chile. Figure 9 Activity gap (*) (percentage points)  4  4  2  2 Sep.17 Report  0  0  -2  -2 Jun.17 Report  -4  -4  -6  -6 02  04  06  08  10  12  14  16  18  20  (*) Gray area shows lowest and highest gap estimates using different estimation methods for potential GDP (HP, SVAR, MEP, FMV, trivariate filter and SSA). See Fornero and Zúñiga (2017). Source: Central Bank of Chile.

Indeed, the data show that, beyond the difficulty of calculating productivity by sector, the negative effect of the decline of mining ore has taking its toll on this industry (figure 12). The evidence from Chile suggests that there are important inefficiencies in resource allocation across firms and that there would be first order gains from measures aimed at improving them, which, unlike the case of human capital, could generate gains sooner. To back this last analysis, the document provides some international comparisons on productivity, microeconomic evidence on how the productivity of firms evolves, and its degree of dispersion. In particular, from a comparative perspective, although Chile's productivity appears to be aligned with its GDP per capita, it is about 60% that of the United States and less than that of the richer OECD countries, which implies that there is great room for improvement (figure 13). In Chile, as in many other economies, there appear to be significant gains from fostering a better allocation of productive resources, helping the more efficient firms to grow and the less efficient to shrink and eventually exit the market. As can be seen in table 3, 9  resource reallocation is an important source of TFP growth. For this, it is essential to have flexible labor markets that allow adjusting the endowment of companies when necessary, developing the financial system to direct resources to where the good ideas are and implement rules that facilitate the creation and dissolution of companies.
Such alliances could benefit from the Singapore manager’s access to local investors as well as the foreign manager’s working relationships with other hedge fund managers. Structures that involve a foreign fund of hedge funds feeding into other funds of hedge funds will also be allowed with good reason and disclosure of all relevant fees and charges. Work has also begun on the third pillar – enlightened investors – which is an essential element of a disclosure-based regulatory regime. The Financial Advisers Act (FAA), which will become operational on 1 October, will create a class of financial advisers who can advise and inform investors on a whole range of investment products. These financial advisers would be able to promote public awareness of more sophisticated products such as hedge funds. As part of the regulatory regime under the FAA, a new code of conduct will be issued shortly to provide guidance on the standards of conduct expected of all persons who provide financial advice  4  BIS Review 52/2002  (including exempt financial advisers like banks and insurance companies). The standards will cover specific responsibilities with regard to hedge fund products such as explaining product features and risks, as well as making investment recommendations to clients. The new regulatory framework under the FAA is expected to raise the quality of advice on investment products and, along with that, investor sophistication. Within MAS, a new division has been set up to provide an overview of investor education efforts across the financial sector.

In other financial centres, having a strong community of well-informed retail investors has helped in developing the sophistication of the financial markets. This is what we would like to see happening in Singapore. MAS will work closely with the industry to identify gaps and study ways of enhancing investor education in Singapore. The industry itself also has a major role to play. Given the untapped potential in the market, there is much to be gained, whether at the individual firm or industry level, by being more active in educating investors about the nature of hedge funds, their contribution to an overall wealth management strategy, and the merits of different products. Only by winning and maintaining the trust of investors can the hedge fund industry seize the unique opportunities that are opening up in Singapore and the region. For its part, MAS will maintain its calibrated approach towards the regulation of hedge funds and hedge fund managers. MAS will also continue to build on the three pillars of enhanced disclosure, enabling and flexible regulation and enlightened investors to establish sound regulatory standards for the industry and foster market development. In each of these areas, we will need to work closely with industry players like yourselves. I consider this conference to be a useful step in promoting such cooperation. Thank you. BIS Review 52/2002  5
In 2000, relative price stability was achieved and the inflation rate on annual basis (December 2000 / December 1999), measured through the retail prices index equals 10.8%. Measured through the costs of living index, as agreed with the IMF arrangement, the inflation in 2000 equaled 6.1%. In 2000, compared to the previous several years, the inflation is higher, however it should be underlined that the reason for that is not the monetary policy, but the impact of the non-monetary factors. These factors are the following: •  one-time effect of the introduction of the value-added tax on prices;  •  increase in the price of oil on the world markets, accompanied with the appreciation of the US Dollar;  •  increase in the price of electricity and maintaining higher tariff for calculation of the price of the electricity;  •  increase in the prices of particular services which are under direct control of the government  However, it is crucial that the potential fundamental generators of inflation such as the monetary policy, the fiscal policy, the exchange rate and the wages remained under control and coordination. Therefore, the Central Bank considers that the impact of the non-monetary factors that gave rise to the inflation in 2000 are of temporary character and that in 2001 the inflation will get back to the level from the previous several years.

And the rising level of consumer debt means it would be reasonable to expect greater losses on it in our future stress tests. That might mean the system has a bit more difficulty passing future tests. If that were the case, a further strengthening of the defence line would be needed. We have already, in recent months, taken steps to strengthen banks’ defences against losses by raising the capital buffers they are required to hold on all their lending. 12  12  That was achieved by increasing the ‘Countercyclical capital buffer’ that banks must hold against their UK-related lending, from 0% to 0.5% of risk-weighted assets, and expect to raise it further, to 1%, in November. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  And to make sure this defence line is kept robust in the face of rapid consumer credit growth, we are accelerating this year’s test of banks’ consumer credit loans. By September we will have assessed whether the rapid growth has created any small gap in the line. If it has, we’ll plug it. The third of our three defence lines is direct restrictions on high loan to income mortgage lending. Lenders should not extend more than 15% of their new loans at or above 4.5 times the borrower’s income. And borrowers are subject to an affordability test that effectively varies that loan to income limit for their 13  individual circumstances.