samchain/econo-pairs-v1 huggingface dataset:
This past year, many countries in Latin America - other than the major oil exporters - faced the further shock of a worsening in their terms of trade, as commodity prices declined in the wake of the crises in Asia and Russia. However, a number of countries in Latin America have begun to see a resurgence of growth, following sharp falloffs in 1998. As we look ahead to the next decade, I am convinced that many of the developments we have witnessed over this past decade have greatly widened the opportunities for strong growth in the years ahead. Inflation in the global economy appears subdued, fiscal deficits have been widely reduced - and we have gained a much better understanding of how solid, non-inflationary growth can be achieved. The economic and financial crises of the 1990s, while having very adverse macroeconomic implications for the countries involved, nonetheless have reinforced the importance of sound monetary and fiscal policies for all countries and the desirability of market reforms. In addition, these crises have laid the foundation for renewed attention to structural reforms for the banking and corporate sectors as well as to the need for strengthened regulatory and supervisory measures. The challenge going forward will be to execute the necessary strategies to realize these goals. When economic times are reasonably favorable, as they are now, the risk is that complacency sets in and the  BIS Review 29/2000  6  steps needed to address the more deeply rooted structural problems are harder to take.

They also have had to pay more attention to evaluating business opportunities by using more sophisticated risk/return analysis than they previously did, a strategy financial firms have been particularly aggressive in pursuing. What lessons might other countries thus draw from the US experience and what are the implications of the strong economic performance in the United States for other countries? One lesson seems clear. With the advances in technology, all countries that move toward more open and transparent markets stand to benefit from the universally available strides that have been made in information technology. I want to emphasize that the processes I am speaking about do not call for just onetime efforts. Quite the contrary. They demand ongoing attention and adaptation to new circumstances. Second, it is not just that productivity growth is being driven by technological advances. It is also a question of how these technological advances are applied. At the end of the day, I believe, the United States has had such strong economic performance because of the high degree of flexibility and adaptability that has been built into the US labor, product and financial markets over the past decade. BIS Review 29/2000  4  These lessons seem to be gaining a following, as many countries across the globe have begun to record substantial progress in liberalizing and deepening their capital markets, deregulating their state-owned enterprises, and easing existing labor market rigidities. In so doing, these countries position their economies to capture the manifold benefits technological advances allow them to enjoy.
The distinction here is between policies that are designed to bolster deficient aggregate demand and those that facilitate the necessary reduction in indebtedness and unwinding of the misdirected investments – most obviously in housing and construction – made before the crisis. The latter requires balance sheet repair of households and banks, including the writing down of debts that cannot be plausibly repaid and the closure of unviable businesses. That in turn allows resources to be reallocated to where they can be used more productively. Now there is some validity to this critique. Bolstering aggregate demand through sustained low interest rates and quantitative and credit easing will indeed tend to work against the desired rebalancing of demand away from consumption towards saving and net exports – this is what the previous Governor of the Bank of England christened the “paradox of policy” (see King, 2009). And the present period of low interest rates may indeed allow some businesses to survive that do not have a viable long-term future. BIS central bankers’ speeches  1  But against that, it is easier for households, businesses and banks to repair balance sheets when demand is strong than when it is weak. A sustained period of weak demand may also push many businesses that are perfectly viable in the long run into insolvency, especially if the supply of credit is impaired.

That “portfolio rebalancing” channel is thought to have been largely absent in Japan, where most of the Japanese government bonds purchased were held by the banks, which in turn used the proceeds to directly de-leverage without obviously increasing the demand for other assets (although the purchases may have had an impact through other channels). Buying assets held by non-banks was relatively straightforward in the UK. At the time, insurance companies and pension funds were the largest category of holders of gilts in issue. Although commercial banks act as market-makers for gilts, and were thus the immediate conduit for the gilt purchases, they typically held only a very small amount on their own balance sheets as part of their liquidity portfolios. Market-makers had to source gilts in the market before selling on to the Bank. Moreover, because the banks’ own liquidity holdings were generally very short-dated, we were able to target our purchases by restricting them to be longer-dated: initially we only bought gilts over 5 years maturity. 9 We were also conscious of the pressures on pension funds and their need to match longdated liabilities by buying index-linked and longer-dated nominal gilts. Real yields and ultra-long nominal yields were already being driven to low levels by that demand. Hence, we restricted the Bank’s purchases to nominal gilts only and initially capped the maturity at 25 years. The latter restriction was later relaxed as the purchase programme expanded.
Subprime loans were often packaged together with other loans. This resulted in complicated financial products that were sold on by the banks that were responsible for granting the loans to other banks and financial agents. The products were difficult to gain insight into and therefore often came to buyers who found it difficult to assess the risks they had purchased. When the credit losses increased there was uncertainty over where the losses would finally appear. This is in turn led to reluctance on the part of banks and other players to lend money to one another. The structured credit products were created to make the management of credit risks more efficient. At the same time, they in practice contributed to building up the risks that have made the financial crisis so severe. There have also been problems with credit rating agencies (such as Standard & Poor’s, Moody’s and Fitch). These agencies used similar methods for evaluating the structured products as those used for ordinary bonds. Many investors assumed that the credit ratings covered all of the risks, despite the fact that they really only focussed on the credit risk and ignored the liquidity risk, which can often be substantial for structured products. This meant that the credit ratings often underestimated the risks to which investors were exposed. This has greatly undermined the credibility of the credit rating agencies and they have a tough job ahead of them to build up this confidence once again. The supervision of the financial markets has not been effective enough either.

And this would benefit the banks in general, not just the select few with a large market share. In fact, our research indicates that with reasonably conservative assumptions regarding growth and inflation over the three years from 2003 to 2005, the profitability for the average bank in our sample would get back to the average return on assets over the past ten years by around 2005. Obviously, the improvement in the economy would need to materialise for this to happen - and I cannot predict whether it will or not. But at least the banks can take comfort from the fact that the current difficult operating environment may to a large extent be due to cyclical factors, which should eventually reverse. I would stress that this does not mean that banks should simply sit back and wait for the rising tide of the economy to lift them up, or that they should ignore the opportunities that may arise from merger and acquisition. Bank-specific factors will still matter in terms of explaining variations in performance across banks, even if their relative importance was less pronounced after the Asian crisis. Among these bank-specific factors, operational efficiency, as measured by the ratio of non-interest expense to total assets plays the most significant role in determining profitability, at least for the banks in our sample. Surprisingly, the effect of credit quality seems to have diminished over time, perhaps reflecting improvements in the banks’ ability to manage credit risk.
The wealthy friend did not graduate from college and was later sent to the US to finish his bachelor’s degree, while the second successfully earned his bachelor’s degree and won a scholarship for graduate school also in the US. Neither man changed his ways while living abroad. The first continued his unencumbered spending spree with cars, expensive apartment, and credit cards. The second, more studious and frugal of the two, worked long and hard and was able to bring home his Masters degree on time. His hard work ethic stuck with him as he got older, and today he is one of Thailand’s successful business entrepreneurs. The other person however, left the States without any degrees but with a trail of unpaid credit card bills for his parents to repay. He started working in Bangkok but could not stay in any place for long. He started his own small business which loss money and ultimately failed. Unable to change his spending habits, he had to sell his assets and house in order to make good on his debts. To this day, he has no stable income, and must rely on the kindness of people around him for help. One of the lessons that 1 have drawn from the story is that immature adults, when presented with easy access to credit, may form the habit of spending beyond their means until they themselves become a burden on their community and society.

A more recent story that comes to mind involves two factory workers who earn approximately 6,000 baht per month. Both were invited to apply for a credit card but only one signed up for the offer. This worker first used his credit card to purchase a TV set, which he could easily finance with his salary. Nevertheless, the TV was followed by a washing machine and a motorcycle, which eventually pushed his monthly debt payment to exceed his income. As he exhausted all of his savings, and could no longer borrow from family and friends, his belongings were repossessed by the creditors, and finally he had to quit his job in hopes of running away from his remaining creditors. The story highlights a dangerous combination in the fabric of Thai society and that is low-income earners who lack financial literacy, or the ability to effectively manage their finances, but yet have very high marginal propensity consume. They in turn are more susceptible to unknowingly consume beyond their means, and like my previous story, become a burden an society. That burden is further intensified by the difficulty in finding and obtaining new employment. This probable risk demands that stakeholders take a more cautious approach to ensure quality growth in Thailand’s consumer finance market. Ladies and Gentleman, In reality there are more than one type of savings behavior in the world, but most importantly the savings behavior should be appropriate for the developmental needs of each country.
And how do consumers make their choice? The next question is how cards and cash are actually used. How does the Swedish consumer make this choice? To find out, the Riksbank ordered a survey of the consumer’s  4  Bergman, M., Guibourg, G., Segendorf, B., (2007), “The Costs of Paying – Private and Social Costs of Cash and Card Payments”. Sveriges Riksbank Working Paper Series No. 212. 5  The study uses Swedish cost data from 2002. 6  The Swedish Financial Market 2007, Sveriges Riksbank. 7  Bergman, M., Guibourg, G., Segendorf, B., (2007), “The Costs of Paying – Private and Social Costs of Cash and Card Payments”. Sveriges Riksbank Working Paper Series No. 212. BIS Review 68/2008  3  choice between cards and cash. 8 In addition to the actual choice of means of payment, the individuals were asked about the size of their most recent purchase. We were able to use data from this survey to estimate the actual cut-off point in the choice between cards and cash. This was defined as the amount at which the probability that a consumer would choose to pay by card was as great as the probability that the consumer would choose to pay by cash. The survey showed that an average consumer chooses to pay by card when the amount exceeds SEK 123. 9 Neither gender nor region appears to play any major role in the choice.

DLT) and across borders  RTGS 24/7 Payments  DLT  4  30.3.2023  Swiss Payments Vision – an ecosystem for future-proof payments | Money Market Event | Andréa M. Maechler / Thomas Moser | © Swiss National Bank  Instant payments offer many benefits for the economy  In real time, final and around the clock like cash, but in electronic form  Lower costs and risks through shorter settlement chains Seamless connection with new services as part of automated value chains Cross-border payments thanks to links with other IP systems  Settlement in central bank money 5  30.3.2023  Account-based at commercial banks  Swiss Payments Vision – an ecosystem for future-proof payments | Money Market Event | Andréa M. Maechler / Thomas Moser | © Swiss National Bank  Instant payments – an innovation based on proven principles for futureproof payments  24/7  max.
14  Figure 5 Durable consumption and imports (annual change, percent)  30  15  Durable consumption (right 10 axis) 5  20 Capital goods imports (*)  10 0  0  -10  -5  Consumer goods imports  -20  -10  -30  -15 14  16  15  17  (*) Excludes uncommon transport vehicles. Source: Central Bank of Chile. Figure 6 Evolution of self-employment (percent of total employment)  32  32 Self-employment  30  1986-2017 average  30  28  28  26  26  24  24 2010-2017 average  22  22 86  88  90  92  94  96  98  00  02  04  06  Sources: Central Bank of Chile and National Statistics Institute (INE). 08  10  12  14  16  15  Figure 7 Interest rate by type of loan (1) (index, 2002-2017=100)  200  200 Commercial  180 160  180 160  Housing (2)  140  140  120  120  100  100 Consumer  80  80  60  60  40  40 02  05  08  11  14  17  (1) Weighted average rates of all operations performed each month. (2) Loans denominated in UFs. Source: Central Bank of Chile using SBIF information.

In this FS Report, we emphasize that in recent times the Chilean financial system has seen no major disrupting events, and the information at hand indicates that it is in a good position to withstand the impact of stress scenarios. Both domestic and external payment systems have operated normally, while credit risk indicators have remained low. However, recent developments indicate a gradual increase in the latter. One important risk is that, if the economic slowdown continues as it has for some years, this deterioration might deepen. On the external front, the risks identified in the FSR are similar to those I just described for the Monetary Policy Report. Note that global uncertainty is still high, so going forward, the risks of revisions to the world economic outlook cannot be ruled out. Note also that possible increases in long-term interest rates in international markets, besides entailing a forex effect, might be transmitted to local rates and translate into higher funding costs for local agents. As I just said, the cost of local short- and long-term financing reached record lows, in line with market expectations for the MPR and the environment of low long-term external rates. In this context, institutional investors made moderate changes in the composition of their portfolios. In particular, the assets in layer 1 mutual funds continued to grow relative to the other funds; Life insurance companies continued to increase their positions in real estate investment; and pension funds increased their exposure in local bonds.
The Objective of the FPC The UK government has proposed that the FPC’s main responsibility should be taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system (my emphasis). “Systemic risk” is defined to embrace both faultlines in the structure of the financial system, ie the way its components are joined up; and cyclical threats from unsustainable levels of leverage, debt or credit growth. Two glosses on that are warranted. First, the government’s plan does not entail the FPC being held accountable for fine tuning the credit cycle, but rather for ensuring stability by maintaining the resilience of the financial system. An example might help. Say that in the face of a credit boom, the FPC raised banks’ capital requirements. That might help to slow the boom, and it would be helpful if it did so. But even if the boom continued, by virtue of having higher capital ratios the banking system should be more resilient when the bubble burst. If those FPC actions prevented the banks going bust, the downswing in the credit cycle, and so in the business cycle, would be less severe because the flow of credit services could be sustained. That would be a success. Perhaps not always a glorious success, but a whole lot better than where we are right now.

It will also give us the most important public platform to explain and defend our decisions, which sooner or later will prove unpopular. Unlikely as it may now seem, there will come a day when much of the public, businesses and banks find themselves on the same side, united in their opposition to the FPC taking away the Punchbowl before the party gets totally out of control. But the FPC will not be like the MPC in all respects. In contrast to monetary policy decisions, at least as practiced in the UK where we decide via individual votes, we will aim to reach decisions by consensus (although there will be provision for voting). That is essentially because of the wide range of issues the FPC will consider and the range of instruments potentially under our control. Another contrast with monetary policy is that, in some respects, we are entering unchartered territory for a developed economy. We will all – policymakers, bankers, investors, commentators, politicians – be learning about how, for example, varying capital, liquidity or collateral requirements is transmitted into the credit markets and the economy more widely. I therefore expect us to publish papers on how we approach our task and on the underlying economics. And, through the Remit process I described earlier, the government will be able to adapt the regime at the edges as we all learn. And we will need to learn, sometimes from mistakes or missed opportunities.
If inflation deviates from target by more than 1 percentage point, the MPC has to write a public letter to the Chancellor to explain why, and what it is doing to bring it back. These arrangements remain relatively novel and unusual in UK constitutional terms. Prior to 1997, a longstanding objection to Bank of England independence was concern that such arrangements would be inconsistent with Ministerial duty to answer to the House of Commons on major matters of policy. A high level of transparency and openness about MPC decisions has been a critical aspect of meeting expectations of parliamentary and public accountability as well as an effective way of enhancing the credibility of monetary policy. In fact greater openness about monetary policy was part of the package of changes that were made to restore credibility after the UK’s exit from the ERM in 1992. The Bank played its part by introducing a new quarterly Inflation Report, which by 1997 had won widespread respect for its objectivity and  1  Goodhart, C (1999) ‘Recent developments in central banking: some special features of the Monetary Policy Committee and of the European system of central Banks’ Jean Monnet Lecture, Dublin European Institute, 1999. BIS Review 17/2005  1  professionalism. Against this background, the 1998 Bank of England Act required the new Monetary Policy Committee to sign off the Bank’s Inflation Report. In practice, the MPC’s sign off has been far from a formality, though the Inflation Report formally remains the Bank’s report.

To be sure, there have been times when differences of view about the central projection have been too significant to be handled within the ambit of the fan chart and on those (few) occasions the Inflation Report has included material illustrating the minority view. But, as the MPC’s preface to the Inflation Report notes, the fan charts reflect the Committee’s best collective judgement about the most likely paths for output and inflation and the uncertainties surrounding the central projections, while recognising that members may have slightly different views about the underlying assumptions. Forecasts and interest rate decisions How influential is the forecasting process when it comes to the actual business of taking decisions about interest rates? One yardstick might be whether the MPC is more likely to change rates in Inflation Report months. There is no necessary reason why this should be so: information accrues relatively evenly over the year, and the Committee goes through the same decision taking process every month. On the other hand, the MPC might be more likely to change rates after a systematic and full review of the inflation outlook, rather than in response to the news on the month. On this argument, ready-reckoners may give a rough indication of what the impact of new data may be, but they are no substitute for a full analysis. So in non-Inflation Report months the MPC may sometimes decide to ‘wait-and-see’ – to postpone a possible interest rate change until more evidence has accumulated.
Thank you for your attention. 4  BIS central bankers’ speeches

Anita Angelovska Bezoska: Journalists are one of the main transmitters of monetary policy messages Address by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of Macedonia, at the Journalist Workshop - 2018, organized by the National Bank of the Republic of Macedonia, Skopje, 25 December 2018. * * * Distinguished media representatives,  Welcome to the fourth Journalist Workshop hosted by the NBRM. I am glad to see you in greater numbers this year, which is confirmation of your interest in the topics that will be the focus of today’s event. Allow me to take a brief look at several basic, yet important aspects of central bank communication: 1. Why is central bank transparency and communication important and needed? 2. How has central bank communication evolved over the years? What were the challenges in the period after the outbreak of the global crisis and how were they addressed globally? 3. Challenges in central bank communication in the Republic of Macedonia. A comparison between the current and the past transparency level and central bank communication shows an exceptional transformation in this segment. The need for strengthening central bank transparency was brought to the fore for the first time in the 1990s, implying enhanced communication with the public, including the media. This change is associated with the concept of central bank independence, or the independence of the monetary policy from fiscal policy.