samchain/econo-pairs-v1 huggingface dataset:
And although consumer price inflation here is close to target at 2.1%, three developments now threaten to push it significantly above target this year. First, oil prices are around $ a barrel, although they have fallen back in recent days. In August, the price was $ Second, oil price increases have been accompanied by rising gas prices in wholesale markets. And this month we have seen announcements from suppliers of increases in household gas and electricity bills of the order of 15%. Third, world food prices have risen sharply as a result of strong demand growth on the one hand and poor harvests from South Australia to North Carolina on the other. Food prices on world markets are a third higher than they were six months ago, and that has been feeding through to prices in the shops. Food price inflation in our own Consumer Price Index reached almost 6% in December. So 2008 is likely to see higher energy prices, higher food prices and, with a lower exchange rate, higher import prices, pushing inflation above the 2% target. It is possible that inflation could rise to the level at which I would need to write an open letter of explanation, possibly more than one, to the Chancellor. Although there is little we can do now to avoid some rise in inflation this year, the task of the Monetary Policy Committee is to ensure that it is short-lived.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at a dinner hosted by the IoD South West and the CBI, Bristol, 22 January 2008. *  *  *  It is four months since Northern Rock came to the Bank of England for support. And the headlines continue to be dominated by its fate. Northern Rock, however, is not the epicentre of the present global banking crisis. That lies in the very substantial losses made by many banks in the main financial centres as a result of the collapse of the US sub-prime mortgage market. Those losses, and the fear of future losses on a wider range of loans, pose a threat to the ability of the banking system to finance continued economic growth – the so-called credit crunch. Concerns about the implications of a credit crunch, not only for the health of the US but for the world economy, lie behind the sharp falls in global equity markets over the past week. So the next year will pose economic challenges for all of us – more so than at any time since the Bank of England was given its independence in 1997. Both industrialised and emerging market economies have been affected by the fall in asset prices but conditions vary across countries. It is striking that the banking crisis originated at the heart of the world’s major financial centres.
The Fund must enhance its surveillance activities and its advice must be acted upon to a greater extent. However, this probably requires changes in the IMF’s governance structure. Countries that are now gaining in economic strength are seeking greater influence, and the IMF must also improve its reputation in these countries. We have to ensure that the Fund has sufficient resources to grant loans to member countries that are particularly hard hit by the financial crisis. The financial resources of the IMF are being discussed at the G20 summit in London. The IMF aims to double its lending capacity and has called on member countries to provide the necessary funding. Several countries have responded positively, among them Norway. The Government has offered to make available a contribution of up to NOK 30 billion to the IMF, subject to approval by the Storting. The US has asked for the NAB 3 to be increased substantially. Even a special one-time allocation of SDRs 4 to strengthen global liquidity may be considered. The Government Pension Fund – Global Let me now turn to the Government Pension Fund – Global. International capital markets have been a boon to Norway. We drew on borrowing opportunities abroad when the petroleum industry was being built up. We did the same in order to expand welfare schemes and to finance the countercyclical policy of the mid-1970s and the early 1990s. National oil and gas resources are now converted into equities and bonds abroad in the Government Pension Fund – Global.

Hong Kong How does the present situation in Hong Kong match up against these various considerations? Hong Kong is in several respects exceptional, if not unique. It has no specific central bank law of the type common in other jurisdictions (although a number of laws, such as the Exchange Fund Ordinance and the Banking Ordinance, govern particular aspects of the Monetary Authority’s functions). It has no mainstream government debt. It operates a currency board rather than a discretionary monetary policy. And it has only quite recently become familiar with the idea of a budget deficit persisting for longer than an isolated year or two. Although the absence of a law to explicitly prohibit monetary financing of the budget deficit – of the sort which has been adopted in many economies, both new and old, in the course of the past couple  BIS Review 70/2002  3  of decades – may be thought a weakness, it need not be so in reality. Whether or not it has a formal legal basis, the proscription of monetary financing has nowadays become so firmly established as part of the policy landscape in the developed financial economies, that any of them which dared breach it would be immediately crucified by the markets, the world media, the IMF and so on. One could class this as a sort of de facto law of nature, which is likely to be at least as effective and durable as any law passed by a legislature, if not more so.
On two further points – dynamic volatility adjustment and the risk margin – we are still working and will respond to the TSC in due course. On the risk margin we will act to tackle the problems we, the industry and the TSC have agreed exist. 4 5  From 2.5% to -0.75%. The Ogden rate is used to discount future liabilities for personal injury and fatality claims. Based on 2016 data. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  But let me be clear: we are not going to go soft. We can tell the difference between feedback about a genuine technical flaw and generalised lobbying for lighter-touch regulation. And we will continue with our forward-looking, judgement-based approach to supervision – which will inevitably mean that conflicts with firms sometimes arise. This is inherent in a system in which a regulator is charged with pursuing the public interest through the activities of privately-owned firms. In that spirit, let me say a few words about the Matching Adjustment (MA). Allowing insurers to capitalise an illiquidity premium has long been a feature of the UK regime. It makes sense and we fought hard to get it included in Solvency II. It delivers a massive benefit to those insurers that use it – £ billion in capital which is the difference between those firms being at 155% of their capital requirement and 65% of it.

That might be because they hold assets directly in their trading books. For example, the £ of credit trading losses of RBS in 2008 amounted to 40% of the total net accounting losses of RBS between 2007 and 2010. 5  Or they might be exposed to a corporate sector that, if asset prices adjusted, would have a debt overhang. Our stress tests show that losses on corporate loans can account for more than a third of banks’ losses in an economic shock, even though they account for only a fifth of banks’ loans. iii)  Markets lack resilience and so amplify adjustments  There are myriad reasons why this can happen and I’ll discuss some live examples later. 4  Research by Bahaj, Foulis and Pinter (2016) suggests that a 10% fall in UK commercial real estate prices is associated with a 1% decline in firm investment. 5 See the report by the board of the Financial Services Authority (2011), ‘The failure of the Royal Bank of Scotland’, for additional information. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  When markets amplify price adjustments, the other channels become more powerful. And there is also an important direct effect on the economy: the cost of new finance to the wider economy is driven up and its availability driven down. In extreme cases, markets can become dysfunctional and effectively shut out access to finance. UK high yield bond issuance markets were closed for four consecutive quarters during the global financial crisis of 2008-9.
The studies further cited successful community banks as having a strong and localized customer service focus – that is, avoiding the temptation to expand into new, less familiar areas and markets – and high community visibility, with staff members heavily involved in community activities, which in turn, created customer relationships built on trust. 5 So what did we learn from the experience of community banks with the financial crisis? A foundation built on good risk management practices and intimate local knowledge helped the successful banks to thrive during one of this country’s most difficult financial periods. The banks that prosper in the future will likely have characteristics similar to those that outperformed during the financial crisis. It bears repeating that community banks are critical in keeping local economies vibrant and growing. Strong community banks are essential to the provision of credit to small businesses in their localities. 4  See United States Government Accountability Office, Financial Institutions: Causes and Consequences of Recent Community Bank Failures, Statement of Lawrance L. Evans, Jr., Director Financial Markets and Community Investment, June 13, 2013. Also see Gilbert et al. (2013). 5  St. Louis Federal Reserve Study Shows Community Bank Model Can Thrive in Good Times and in Bad. BIS central bankers’ speeches  3  Importance of small business lending It is often noted that small businesses contribute disproportionately to employment growth in their communities. When you dig a little deeper into this stylized fact, you discover that it is new small businesses that are responsible for this growth.

Lending to small businesses and entrepreneurs requires deep knowledge of local business conditions and potential borrowers, both of which community banks have a comparative advantage in acquiring. Former Chairman Ben Bernanke in a 2012 interview summarized this point quite well. He stated that “community banks have the capacity to respond with greater agility to lending requests than their national competitors; they have more detailed knowledge of the needs of their customers and closer ties to the communities they serve.” 2 Given this critical role played by community banks for localities such as the Bronx, it is important to ensure that the local banking sector remains vibrant. The financial crisis offers important lessons for community banks in this regard. Lessons for community banks from the financial crisis America’s banking system began with community banks, and today they continue to play a critical role in the financial system. However, the number of commercial bank charters has declined by 50 percent since 1985, with the recent financial crisis contributing to this decline. A total of 417 banks and thrifts failed between 2006 through 2011. 3 Many community banks, though, not only survived but also thrived during the crisis. Why? What sets those banks apart from others that failed, or that survived but did not thrive? What were some common  2  The Importance of Community Banking: A Conversation with Chairman Ben Bernanke, Community Banking Connections, Third Quarter 2012.
The Bank would be accountable to Parliament for operating the instruments of monetary policy to achieve the objectives of monetary policy, which would be determined by the Government. 21 The operational independence of the Bank of England is an example of power flowing from the people via Parliament within carefully circumscribed limits. Independence in turn demands accountability in order that the Bank commands the legitimacy it needs to fulfil its mission. By publishing its analysis, giving testimony, and delivering speeches, the Bank explains how it is exercising its powers to achieve its clearly defined policy Remits. 19  Even the “fish weirs” clause (33) can be read, in hindsight, as a protection both of the public good (in Roman law terms, res publica) and of the freedom of navigation: the same principle for the which the English entered into the Seven Years War of 1756–63, whose costs, in turn, brought about the American Revolution of 1776. 20  George, E. (2000), “Central bank independence”, speech at the SEANZA Governors’ Symposium, 26 August 2000. 21  See, for example, King, M. (2000), “Monetary policy: theory in practice”, 7th January 2000. King attributes the “constrained” versus “unfettered” distinction originally to Ben Bernanke and Frederick Mishkin. BIS central bankers’ speeches  7  To illustrate these points, I will conclude with some reflections on monetary policy. Our objective, given to us by Parliament, is to maintain price stability and, subject to that, to support the economic policy of Her Majesty’s Government, including its objectives for growth and employment.

Overall, given the acceptance of countercyclical approaches to macroprudential policy, I am sure that the panel discussion tomorrow on the Spanish countercyclical provisions experience will offer not just an interesting study in history, but also some lessons for the future. Without further ado, I am pleased to open this first Conference on Financial Stability giving the floor now to Rafael Repullo, director of CEMFI, who will chair the first session. Thank you for your attention. 5/5
In this respect, I should first like to refer to the recent developments in the doubtful assets ratio for loans granted to households for house purchase. For the last few months, this ratio has been on a rising trend. And as it will no doubt continue to grow in the future, I feel we should view it as a worrying factor, but only a moderately worrying one, for the following reasons. Primarily, because we must not forget that this ratio had been at exceptionally low levels as a result of the high rates of growth of lending itself (the denominator of the ratio), so that increases would have been expected even in the absence of the present tensions. Secondly, because the current levels are still relatively low and well below those of other markets. However, in addition, there are some specific features of our financial practices that tend to limit the scope of this source of risk. I am basically referring to the fact that in Spain, unlike in the United States, households tend to default on their mortgage payments only in really extreme conditions. The causes for concern may be greater in the case of loans for property development. True, the coincidence of the maturing of the property cycle and the triggering of international financial tensions has been particularly untimely for the Spanish economy.

This is the stance that should, in my opinion, inform the actions of central government and other government bodies, which in Spain’s highly decentralised system of regional government have very significant responsibilities, as well as the behaviour of economic and social agents, whose attitude may determine the degree of flexibility of the productive system and of the institutional framework and the viability of the necessary reforms. We should be aware that there is very little room for expansionary demand policies here and that inappropriate use of such policies may even be counter-productive. Monetary policy ceased to be an autonomous economic policy tool a decade ago. Its primary objective is to maintain price stability in the euro area over the medium term. From the point of view of domestic requirements, the monetary and financial conditions in which Spanish households and businesses have been operating have been becoming progressively tighter and are currently more in line with the need to stem inflationary pressures in the Spanish economy. For its part, the fiscal position is in a favourable starting position since public finances were again in surplus in 2007 (2.2% of GDP) and the debt ratio stood at 36.2% of GDP, levels unprecedented in the recent history of the Spanish economy. These results reflect the strong commitment of previous governments to fiscal discipline, but also substantial growth of the Spanish economy in recent years and the buoyancy of the property market. That has resulted in strong growth in tax revenues, exceeding that seen in previous upturns.
According to this proposal, the initial contribution to the foundation would be in the form of a 500-tonne gold donation by the SNB.1 In 1997, the SNB was not only a special case with respect to the size of its gold holdings but also with respect to the amount of its capital reserves. The extreme level of capital reserves was the result of the restrictive profit distribution of the previous decades. In April 1997, the Swiss government commissioned a group of experts to draft a proposal for a new monetary constitution and to estimate, among others things, the excess capital reserves of the bank. The report, which was presented to the public in October 1997, came to the conclusion that capital reserves equivalent to 1300 tonnes of gold were no longer necessary for monetary purposes and could therefore be withdrawn from the SNB’s balance sheet and used for other purposes. In May 1998, this proposal was incorporated in the government’s message concerning the new monetary article of the federal constitution. Two further legislative steps were required for actual gold sales to begin. First, the Swiss people had to ratify the reform of the constitution. This occurred in April 1999. Second, the Swiss Parliament needed to adopt the new federal law on currency and payment instruments which replaced the old Coinage Act. The new law came into force in May 2000. Hence, it was only 27 years after the collapse of Bretton Woods that the SNB was legally in a position to start selling gold.

Nonetheless, the SNB’s unilateral announcement in June 1999 of its intention to sell 1300 tonnes of its gold reserves certainly contributed to setting in motion the process that led to the September 1999 joint statement issued by the fifteen European central banks. III. Selling strategy  The Washington Agreement now set the parameters for the SNB’s selling program. The practical details were negotiated in the months following the signature of the agreement. Annual quotas were assigned for each period going from October to the following September. As you can see in Figure 4, the SNB was allowed to sell 120 tonnes of gold between October 1999 and September 2000, 200 tonnes for the next 12 months, 283 tonnes between October 2001 and September 2002, 283 tonnes again between October 2002 and September 2003, 284 tonnes between October 2003 and September 2004 and 130 tonnes after September 2004. The participating central banks agreed to eliminate the possibility of hedging the gold price risk for the entire five year period. However, flexibility was maintained in hedging the gold price risk for the selling quota within each current 12-month subperiod. In other words, forward sales or option programs were possible for the annual allocations only. On the other hand, there were no limitations on hedging currency risk. The SNB was therefore free to hedge the expected USD proceeds from the sales against the Swiss franc. At the outset, the SNB decided to use the BIS as its selling agent.
Nonetheless, the most recent data could suggest a change in trend in this market stemming from the macro-financial setting that I have described. Specifically, housing transactions contracted in July, which is significant given that this month usually has a positive seasonal component. Also, house prices ceased to accelerate in Q2, posting growth similar to the first three months of the year. In any event, we will have to wait for new information to assess this behaviour more accurately, meaning we will need to keep a close eye on this market. As for the public sector, fiscal policy has clearly played a key role since the outset of the pandemic to soften its impact on household and corporate income, thus avoiding more persistent negative effects. The corollary of this has been a significant increase in public debt relative to GDP, which was already high before the pandemic. This high government indebtedness and the likewise high structural budget deficit evidently represent vulnerabilities when faced with a tightening of financing conditions, as is the case at present, and reduce fiscal policy headroom to respond to future shocks. Mitigating factors include most notably the higher-than-initially-forecast reduction in public deficit in 2022 and the significant lengthening of the average government debt maturity in Spain, which stands at more than eight years and delays the impact of interest rate increases on the public debt burden. In any event, Spain’s annual public sector financing requirements stand at high levels, around 20 pp of GDP.

Some legal issues have yet to be thoroughly examined, such as the application and enforceability of laws for the crossborder DLT models, mechanisms for handling liability and dispute resolution if there is no centralised party administrating the DLT platform, and compliance with personal data protection principles in relation to data sharing and perpetual storage. Also, traditional cybersecurity issues still apply to DLT, including denial of access attacks and other cyber attacks. 7. The next stage of ASTRI’s study will deliver more detailed findings from a number of the proof-of-concept trials, along with assessment on whether some of this work can be put into action. It will also address the regulatory implications of DLT, and the general control principles for DLT for the banking and payment industry. We plan to deliver the next set of results in the form of another white paper in the second half of 2017. 8. Third, as I announced in September, we are setting up the HKMA-ASTRI Fintech Innovation Hub. I am now pleased to say that, following intensive preparation, the Hub is ready for use as from today. The Hub is equipped with high-powered computing resources and supported by the experts at ASTRI to allow banks, payment service providers, fintech firms and the HKMA to brainstorm innovative ideas, try out and evaluate new fintech solutions in a safe and efficient manner. All in all, the Hub will cater for the big and small institutions alike in supporting their research and adoption of fintech. 9.