samchain/econo-pairs-v1 huggingface dataset:
In the case of banks, there is also an increase in their external debt. It is worth noting, however, that this has not been associated to larger currency mismatches in the banks’  BIS central bankers’ speeches  5  balance sheets, nor to increased credit in foreign currency to firms whose income is in pesos. The maturities of such debt have been extended, contributing to the solid situation of the banking industry, despite the increase in lending activity. Finally, on aggregate, the indicators of international solvency of the Chilean economy – such as the net international investment position and the current-account deficit – remain stable with a marginal improvement of the liquidity position. Overall, in the scenario we estimate today to be the most likely, the Chilean economy will operate in a favorable context. Risks persist, however, that must be taken into careful consideration, both because of their implications for monetary policy making and because of their associated risks for our economy’s financial stability. Now let me make a few remarks. Final remarks The Chilean economy has recovered strongly from the 2009 recession, and the different variables are beginning to converge to their estimated equilibrium levels. Output gaps are closed, unemployment is down, and trend inflation remains below the lower limit of the target’s tolerance range, but gradually approaching three percent. Thus, the monetary policy rate should be around its neutral level, neither increasing nor reducing aggregate demand with respect to its trend.

The shifts in demand during the pandemic – which are geographical as well as sectoral – may have introduced a degree of dislocation between the two. Another is that the sheer speed of the recovery has thrown some sand in the wheels of the labour market. It’s usual for actual hiring to lag changes in vacancies and, so rapid has been that increase in vacancies, there was bound to be a bit of friction in the process of filling them (see Chart 15). These aren’t mutually exclusive, but the latter would be slightly more benign because it would need only time for things to improve. Once those wheels start to turn, and jobs get allocated, one would expect some of this pressure to abate. 13  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  13  Whether that’s the case remains to be seen, however. And, in the meantime, the result is continuing upward pressure on pay. Chart 14 included a survey index of wage growth for new  Chart 19. Wage growth stronger than usual, given the rate of unemployment Annual nominal wage growth, per cent 5 2021  4  employees. Chart 19 plots official numbers for average wage (AWE) growth across the economy as a whole, in the years since the financial crisis,  3 2013-19 2  against the rate of unemployment. Unfortunately, labour market data have been subject to significant distortions during the pandemic.
We do not have zero appetite for failure of individual firms, provided that they do so in an orderly way that does not impose large costs or disruption on policyholders – neither in the form of direct losses nor of disruption – does not have knock on effects elsewhere in the financial system, and there is sufficient capacity elsewhere to substitute for the loss of the failing firm. We cannot leave this all to the market. Intervention in the form of prudential regulation is necessary because of the inverted production cycle in insurance – policies pay out after, in many cases long after, they are taken out – because of the limited or non-existent ability of many policyholders to monitor or react to increases in risk taking by their insurer during the life of their policy, and because of the incentive for managers and limited liability shareholders to increase risk if their capital stake drops too low – so called gambling for resurrection. These market failures are addressed not just by capital requirements, but by the interplay between capital and the other two pillars of the regime. Goldilocks and the three pillars: how much capital is just right? ‐ speech by Anna Sweeney | Bank of England  Page 3  Pillar 3: market discipline Pillar 3 is disclosure of information about a firm’s balance sheet risks. Market discipline is not wholly absent from the insurance sector either at the inception of or during the course of policies.

But of course the existence of this safety net blunts the policyholder incentive to distinguish between a high risk and a low risk insurer at the point of taking out a policy. Paradoxically the stronger the safety net, the stronger the other two regulatory pillars need to be to hold it up. The less the market and policyholders discipline a firm, the more the regulator needs to do it for them, including by policing financial standards. Pillar 2: intervention and risk management Pillar 2 contains a range of qualitative measures, but broadly speaking they can be divided into the ladder of intervention, and requirements for good risk management, including the prudent person principle. These are both intimately connected to how we define capital adequacy. The ladder of intervention is critical to preventing gambling for resurrection: it formalizes and defines the power to intervene before the interests of shareholders and policyholders diverge, in the same way that debt covenants protect creditors by giving them the ability to intervene in clearly defined circumstances under which their interests will diverge from those of the providers of equity capital. The role of regulatory capital in relation to the ladder is to buy time for that intervention.
In addition, dollars would no longer be fungible, because each dollar would have a different amount of interest accrued on it. The difference in those two situations is the subject of money illusion – the behavioral tendency of people to think in nominal terms. 4 To the extent that money illusion is operative, then imposing negative nominal interest rates will be perceived as more costly to people than engineering an increase in inflation of the same amount – in both cases, the real wealth of the person’s money holdings is the same, but in the case of inflation, the person holds the same number of dollars at the end of the period, whereas with negative nominal interest rates, some of the person’s money holdings have been paid out as interest. Money illusion causes the payment of interest to be perceived as more costly, much as people resist nominal decreases in wages which manifests itself as downward wage rigidity. 3  Charles M. Kahn, James McAndrews, and William Roberds, “Money Is Privacy,” International Economic Review 46, no. 2 (May 2005): 377–99. 4  See Eldar Shafir, Peter Diamond, and Amos Tversky, “Money Illusion,” Quarterly Journal of Economics 112, no. 2 (1997): 341–74, for evidence on money illusion. BIS central bankers’ speeches  5  2. Legal and operational frictions  Legal and operational challenges will also arise as money and capital markets adjust to negative rates.

In these circumstances, the counterpart of capital inflows is an increase in the current account deficit. If this phenomenon does not occur facing an abrupt capital inflow increase, it means that capitals are flowing out as well. It is less than evident that, from a mere macroeconomic consistency perspective, gross capital inflows or outflows cause severe disruptions. If in the short run, because of frictions in financial markets, momentary illiquidity or portfolio effects, simultaneous inflows and outflows stress the markets, they could be dealt by using liquidity providing instruments that are regularly used by central banks. This discussion centers around the main macroeconomic impacts, with a special emphasis on inflation, output, and the exchange rate. However, it is worth noting that, from a financial stability perspective, monitoring requires also paying attention to other effects caused by capital flows. Accordingly, important areas to monitor, aside from the behavior of the current account and its counter-entry in the capital account, are asset prices and the evolution of global credit. Also important is using macro-prudential measures to complement monetary policies. In any case, the current scenario differs distinctively from other periods of booming capital inflows to emerging economies. For example, in the early 1980s there were massive net capital inflows to Latin American countries (figure 7). When it reversed, because of an increase in interest rates in the United States, the debt crisis burst and a period of no capital flows to the region started.
Since 2015, the banks’ individual exemption thresholds have been set as a common multiple of their statutory minimum reserve requirements. In such a system, some banks’ holdings of sight deposits will exceed the exemption threshold they were granted. These banks have an incentive to provide this liquidity to other banks. They will, for example, be willing to transact in the repo market if paying the repo rate costs them less than paying the SNB’s negative interest rate on sight deposits. Conversely, there are also some banks whose holdings of sight deposits fall below their exemption thresholds. These banks have an incentive to enter the repo market as cash takers and earn the repo rate, which they will be willing to do as long as the repo rate is below zero. This system, characterised by the negative interest rate on sight deposits and exemption thresholds, has led to a sizable and sustained increase in liquidity redistribution via the interbank market since the beginning of 2015. For this system to work, there must be a sufficiently large volume of sight deposits subject to the negative interest rate. Clearly, in aggregate, the sum of all exemption thresholds must be smaller than the sum of all sight deposits. Otherwise, banks could carry out money market transactions such that no remaining balances would be subject to negative interest, resulting in money market rates close to zero.

In particular, because even though expectations have improved in general, they have done so by anticipating a better future economic performance rather than by current results. In this context, we have held the Monetary Policy Rate (MPR) at 2.5% since May and we expect that, if the baseline scenario comes true, we will keep the monetary impulse near its current levels, to begin withdrawing it only once the economy begins to close the activity gap. Anyway, it is important to carefully monitor any downward deviations of inflation in the short term, because in the context of a weak economy, low inflation and some measures of medium-term inflation expectations remaining somewhat below 3%, the convergence of inflation could be affected, in which case it would be necessary to make the already expansionary monetary policy more so. The financial conditions have helped to shape the macroeconomic scenario described above. Borrowing remains accessible and inexpensive, in line with the orientation of monetary policy. The local financial market has seen no major disruptive events and the internal and external payment systems have functioned normally. Non-financial companies maintain their levels of profitability and indebtedness, while the increase in household debt is concentrated in mortgage credit, which covers long periods, at fixed rates and with a prudent loan-to-value ratio, which keeps the financial burden fairly constant. For its part, in the residential real estate sector, sales of new homes stabilized and prices continued to rise, albeit modestly. Nonetheless, some financial risks identified in past reports are still important.
The basic pattern is suited for countries which are introducing central banking systems for the first time because it contains certain signposts and warning signals which should prove useful to administrators who do not have long established traditions and years of personal experience upon which to rely. It also provides a legal structure which is flexible and adaptable to changing economic conditions. Within the structure there is ample room for the development of policies that are appropriate to the times. Good central banking is less good law than good practice. The Central Bank of Ceylon may make its influence felt more effectively through the development of day-to-day relations of confidence and understanding between itself and the various banking institutions than through the exercise of all of the powers given it under this bill. Such influence is known in the textbooks as “moral suasion” and should be especially important in a small country where  BIS central bankers’ speeches  1  it should be possible to develop close relations between the Central Bank and each of the fairly limited number of banking institutions…..” Having worked as an economist in the Central Bank and banker and investment banker in global financial environment, I perfectly understand what Mr. Exter meant. I invite you all to read the Exter Report if you are interested in knowing what type of institution the Central Bank is?

Some temporary retrenchment is probably not undesirable at this point, as cross-border banking – and perhaps financial globalisation more generally – far outpaced developments in public frameworks. The issue of global liquidity provision to banks needs further exploration. And finally, if countries are increasingly taking unilateral action to protect themselves, someone – probably the IMF – must monitor the process. Going forward, some ground rules might have to be considered so that we are not faced with too serious unintended consequences for the global system. Thank you very much. BIS central bankers’ speeches  5
When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or the persons involved. Criminals do this by disguising the sources, changing the forms of the funds, or moving the said funds to a place where they are less likely to attract attention. In response to mounting concern over money laundering, the Financial Action Task Force on money laundering (FATF) was established by the G-7 Summit in Paris in 1989 to develop a coordinated international response. One of the first task of the FATF was to develop Recommendations, (40 in all, plus 9 Special Recommendations) which set out the measures national governments should take to implement effective anti-money laundering programs. The FATF works closely with other international bodies involved in fight against money laundering. And, one of those international organizations is the Asia Pacific Group on Money Laundering (the APG) in which Samoa is a member. The APG was officially established as an autonomous regional anti-money laundering body in February 1997 for Asia and the Pacific region at the Fourth Asia/Pacific Money Laundering Symposium in Bangkok, Thailand. This was the culmination of a process of “awareness raising” in the Asia Pacific region initiated by the FATF as part of its global strategy. To date, the APG has 39 member countries and a number of international and regional observers, including the United Nations, the IMF and the World Bank.

2  BIS Review 85/2009  As a member of the APG, Samoa is required to undertake a domestic review of its NPO sector to determine the degree of vulnerability to money laundering and terrorist financing activities. I should stress that this workshop is part and parcel of such a review. Under the conditions of membership, all APG members have committed to implement the FATF Forty Recommendations and Nine Special Recommendations. Special Recommendation VIII relates to non-profit organizations. SRVIII calls on all countries to “review the adequacy of laws and regulations that relate to entities that can be abused for money laundering and financing of terrorism. Non-profit organizations are particularly vulnerable and countries should ensure that they cannot be misused: i)  by terrorist organizations posing as legitimate entities;  ii)  to exploit legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset freezing measures; and  iii)  to conceal or obscure the illegal diversion of funds intended for legitimate purposes to terrorist organizations.”  What is the scale of the problem? By its very nature, money laundering occurs outside of the normal range of economic statistics. Nevertheless, as with other aspects of underground economic activity, rough estimates have been put forward to give some sense of the scale to the problem. The International Monetary Fund (IMF), for example, has stated that the aggregate size of money laundering in the world could be somewhere between two to five percent of the world’s Gross Domestic Products (GDP).
Thirdly, the private and public sector complement one another by filling different roles. While the public sector provides trust and stability, the private sector takes care of innovation. Throughout history, then, occasionally the public sector has had to take the lead in creating changes that are beneficial to society. Fourthly, network and scale effects are important factors to consider within payments. They generate barriers to entry, but also leave room for efficiency gains. Though not new, both effects may have been accentuated by the digitalisation of payments. After the historical walkthrough, I will explain those observations further and put them into the context of our current work on developing the payment infrastructure. Finally, I will say a few words about the Riksbank’s e-krona project and our involvement in international work to improve cross-border payments. Those initiatives are targeted more at end-users of payment services. Yet, both can equally well be related to the lessons just highlighted. 2 [15]  The history of payments – fasten your seatbelts! With the brief time I have at my disposal now, a tour through the history of payments must be limited to picking out a few main developments. However, for those with more time to spend, I can certainly recommend this subject for further study. In addition to useful insights into how we got to where we are now, I dare to say that it is packed with drama unfolding around great historical events. I will cover a few of them here.

The problem that has been with us for some time now is the sectoral (and associated regional) imbalance within our overall economy. The domestically-oriented sectors have, for the most part, been doing relatively well, whereas those sectors that are exposed to competition within or from the Euro area have been under considerable pressure. Domestic demand growth has remained relatively robust into this year, but we too are affected by the US slowdown and by the associated weakening of equity prices. And we have had a new problem of our own in the form of Foot and Mouth Disease, the effects of which have gone a good deal wider than just the agricultural sector. These new developments were likely to have a dampening effect on demand pressure within the overall economy, both through their direct impact and through possible damaging effects on confidence. Given the fact that we started from a position in which inflation was below target (and expected to remain so for some period ahead); and given only modest upward pressure – at least so far – on wages and earnings growth, despite the continuing tightness in the labour market; we judged that we needed to reduce interest rates – by ½% – earlier this year in order to meet the inflation target further ahead. And we have made it clear that we will continue to monitor the downside risks very closely, in the context of course of all the other developments affecting our economy.
Petar Goshev: Overview of the Macedonian economy Address by Mr Petar Goshev, Governor of the National Bank of the Republic of Macedonia, at the farewell reception, Skopje, 16 May 2011. *  *  *  Ladies and gentlemen, Your Excellences, dear friends! I am immensely grateful that you are here tonight, at the end of my seven-year responsibility and seven-year pleasure to govern this exceptionally important institution. I would also like to express my gratitude to those who gave me this opportunity to cope with an assignment which is incredibly challenging and highly responsible for every macro economist – to govern a central bank – a bank of the banks, bank of the state, a regulator and a supervisor of money deposit institutions and an entity responsible for the functioning of the payment systems. I would also like to thank all those who have cooperated with us all these seven years – cooperation that have positive effects, directly or indirectly, on the conduct of my tasks and the overall legal term at the National Bank.

In 2006, as most of you well know, we issued a monograph on the sixty years of central banking operations in Macedonia, and today we have made presentation of the report on the NBRM operations in the last seven years, discussing, on about 400 pages, its main activities and accomplishments. These two books are, de facto, a first attempt for aggregate presentation of the historical course of the central banking in Macedonia, since the World War II. I think that this will help the students, the monetary policy analysts, teachers and professors engaged in this issue, and certainly many others in the financial sector. Tonight you can see the hard copies in Macedonian and in English, and the electronic version of the second book, the seven-year report where we extensively discuss the period that ends these days. Nevertheless, I assume that tonight many of you would like to ask to what extent am I (or are we) satisfied of what we have achieved, and, what would I, in few words, highlight as the most important? If there is such question, I would briefly say the following: All decisions in the last seven years were made by the National Bank, with zero influence from the outside, regardless of the verbal suggestions and insistence coming from well known addresses.
Table 1 Domestic scenario (annual change, percent)  2018  2019 (f) Dec.18 Report  GDP Mining GDP Non-mining GDP Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports Current account (% of GDP) Gross national saving (% of GDP) Nominal gross fixed capital formation (% of GDP)  4.0 5.2 3.9 4.7 3.9 4.7 3.7 5.0 7.6 -3.1 19.6 21.3  (f) Forecast. Source: Central Bank of Chile.

Companies with revenues linked to inflation may use this market to hedge against the perspective of low inflation while companies with liabilities linked to inflation may use it to hedge against the risks of high inflation. Compared to inflation-indexed bonds, they provide a wider maturity spectrum for short and medium horizons. However, they are affected by the same biases, in particular the inflation risk and liquidity premia. This tool, however, usefully complements inflation-indexed bonds in the Eurosystem’s information set7 and, so far, the information provided by this new financial instrument has been broadly  6  See F. Alonso, R. Blanco and A. del Rio: “Estimating Inflation Expectations Using French Government inflation-indexed bonds”, Banco de Espana, Documento de Trabajo, n° 0111, 2001. 7  See for instance the box entitled “Deriving euro area inflation expectations from inflation-linked swaps”, ECB monthly Bulletin, September 2003. 4  BIS Review 37/2004  in line with the information derived from indexed bonds, suggesting an average ten-year expected inflation rate of around 2%. In addition to financial indicators, central banks, and the ECB in particular, also rely heavily on surveys to extract relevant information as regards long-term inflation expectations. I will limit myself to two examples: The first is the quarterly survey that has been carried out by the ECB since 1999, in which information is gathered from professional forecasters.