samchain/econo-pairs-v1 huggingface dataset:
To the contrary, during the current liberalization period, which commenced with vigor in 1992, the Bank, in conformity with market reforms, has steadily moved towards the use of market-based structures and systems as opposed to direct instruments in the conduct of its monetary policy. In this  BIS Review 48/2004  1  regard, and beginning 1993, deregulation of interest rates, removal of capital controls and freeing of the foreign exchange market were implemented as part of the broader financial sector reforms. As a result, through the use of mainly market-based instruments of monetary policy, the Bank has made several notable achievements. Amongst these, has been its contribution to the reduction of annual inflation to 17.2% in December 2003 from 197.0% at the end of December 1992. Further, inflation has remained just under 20% in the first half of 2004 and it is the Bank’s desire to see single digit inflation within the foreseeable future. The benefits of lower inflation in single digits can not be over-emphasized, especially with regard to the fight against poverty. Madam Chairperson, last October the Bank took a bold stand of effecting a down-ward adjustment in the statutory reserve ratio to 14.0% from 17.5 % on both Kwacha and foreign currency deposit liabilities. This was intended to release funds to commercial banks. The outcome of this policy action has been increased loanable funds being available to commercial banks. This in turn has greatly contributed to the downward trend in lending rates in the economy.

But the regeneration of urban communities, and the efforts of British Waterways, have reversed this decline. The number of miles is now increasing. Last year, 13 million people visited our canals and the number of boats is actually higher now than during the Industrial Revolution. Such examples are important because our economy faces the prospect of change again. After an unprecedented financial crisis and deep recession, the UK economy needs to rebalance. Tonight I want to talk about what those changes will entail and the role which the Bank of England can play in supporting them. The Bank of England’s key role has always been to ensure that the economy is supplied with the right quantity of money – neither too much nor too little. For fifty years, my predecessors struggled to prevent there being too much, so leading to inflation. I find myself in the opposite situation having to explain that there is too little money in the economy. But, in the wake of the financial crisis, and the sharp downturn that followed, the amount of money in the economy as a whole – broad money – is now barely growing at all. That is restraining activity and pushing down the outlook for inflation. So the Bank of England has taken extraordinary monetary policy measures – through our so-called “quantitative easing” programme of asset purchases – to ensure that the amount of money starts growing again in order to support a recovery and keep inflation on track to meet our target in the medium term.
Prominent among the measures that have been announced or that are pending approval or final design include occupational pension schemes, a review of maximum social security contribution bases and maximum pensions, a new contribution system for self-employed workers, and a review of the reference period for calculating the regulatory base. In recent years, the Banco de España has, in various documents and reports, set out certain principles that should govern the pension reform. First, once the level of benefits the system should provide has been established at the political level, it is crucial that the strategy be rounded off by setting revenue levels and other system parameters (e.g. the retirement age) to ensure the system’s funding. As part of this strategy, it would also be desirable to strengthen the link between contributions made and benefits received – ensuring a sufficient level for the most vulnerable households –, and to analyse the consequences of the reforms envisaged in terms of redistribution and intergenerational equity, to ensure that any adjustments to the system do not fall disproportionately on specific population groups, such as the retired population or future cohorts of workers. The system should also be made more transparent and easier to plan for, to offer greater certainty to the population and facilitate decision-making as regards saving, work and retirement. In this respect, automatic adjustment mechanisms could possibly be introduced, to adapt certain system parameters to changes in demographic and economic dynamics.

Naturally, the financial system and central banks – within the scope of their mandates – must also contribute to the green transition. In this respect, from the standpoint of the Eurosystem in general, and of the Banco de España in particular, one priority at present and in the more immediate future is to make headway, in conjunction with the financial system, in incorporating climate considerations into the operating frameworks of monetary policy, financial stability, supervision and regulation. Banking sector challenges Complementary to this Annual Report, our Financial Stability Report (FSR) published in May analyses the situation of the Spanish banking sector in depth. The sector is facing the shock caused by the Russian invasion of Ukraine, in a setting in which its resilience remains generally high, returns have recovered their pre-pandemic levels and lending has normalised. Yet the war in Ukraine entails new risks to financial stability. Although Spanish banks have very little direct financial exposure to Russia and Ukraine, the indirect effects of the war may be significant. In particular, the macroeconomic deterioration could impact households’ and firms’ ability to pay, above all those experiencing a slower or tardier recovery from the pandemic and whose solvency may now have worsened. Against this backdrop, lending in Spain fell slightly in 2021. Firms’ demand for credit was lower, as they faced lower liquidity needs than in 2020, but this was largely offset by stronger lending to households, especially in the loans for house purchase segment.
In order to successfully maintain price stability, we constantly have to make all the reasons underlying our decisions transparent to the public. 1  2  Source: http://www.ecb.int/stats/payments/payments/html/04_table2.en.html  BIS Review 59/2004  The announcement of the monetary policy strategy in October 1998, before the introduction of the euro, was a milestone in this regard. It clearly stated the ECB's understanding of its objective and the framework used to guide policy decisions. In addition, the Governing Council's assessment of the economic situation and the risks to price stability are regularly published and monetary policy decisions are explained in a press conference that I and the Vice President give immediately after each monthly meeting in which monetary policy is discussed ; in this respect, the ECB has been very bold in its communication policy, as the usual practice of central banks in 1999 was to release their diagnosis about 6 to 8 weeks after the meeting of their decision making body; by providing a comprehensive explanation of its decisions almost in real time, the ECB has certainly set new standards of transparency in the world of central banking. We are convinced that transparency is a prerequisite for accountability and enhances the understanding among the markets of how the central bank conducts its monetary policy, thereby promoting predictability and supporting substantially policy effectiveness.

What is appropriate for all economies is all the more necessary at the euro area-wide level, where, in the absence of a federal budget, a credible framework ensuring fiscal discipline is a key component for the consistency and the cohesion of our monetary union. Sound fiscal policies implying safe budgetary positions in good times are necessary to ensure that fiscal policy has room to cope with asymmetric shocks, which can no longer be addressed by monetary policy. Not least for these reasons, it is a matter of concern to the ECB that in a number of Member States abnormally large fiscal deficits have persisted over years. The Commission has tabled some proposals and a discussion has been launched to consider how to strengthen and clarify the implementation of the Stability and Growth Pact. We can find common ground between some of the Commission’s proposals and our own thinking, namely, as regards the preventive arm of the Pact. We agree that the implementation of the Stability and Growth Pact should be improved. We agree that ownership and incentives for compliance need to be enhanced. And we agree that implementing the Pact in a way that best reflects its economic rationale should help to achieve this end. At the same time, making the rules exceedingly complex and contingent on too many circumstances would complicate the implementation of the framework to the point where rules would be de facto relaxed.
It ensures the robust collateralisation of the remaining net exposures through the margin taken from participants. And in the event of a default, any losses that exceed the defaulter’s collateral margin held by the CCP are mutualised between the members. As the Lehman experience illustrated, the centralised, rules-based management of a clearing member’s default by a CCP, combined with the incentives created by mutualisation enhance the system’s resilience and continuity during a stress and brings greater certainty to the default management process for market participants. Central clearing also brings greater transparency – in the run up to the crisis and during the crisis itself, authorities had very poor visibility over the network of derivatives transactions. That made it much harder to identify risks and the connections between institutions. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  2  Not all derivative contracts are suitable for central clearing. Where clearing is not possible, the post crisis reforms include similar requirements to margin and report bilateral derivative contracts. But the additional mutualisation and central default management benefits of central clearing, justify in my view, the authorities efforts since the crisis to move derivatives that are suitable for clearing onto CCPs. These efforts have been successful. Reforms since the crisis have led to a very substantial increase in the use of clearing services for both exchange traded and over the counter derivatives.

This concept of “no creditor worse off’’ (NCWO) is a central tenet of resolution regimes for banks. Resolution powers can interfere with property rights and the NCWO protection is needed to constrain use of these powers by the authorities. In the case of a bank, the test is that no creditor should be worse off than if the bank had gone into insolvency. For the reasons set out above, the insolvency counterfactual needs to be modified for CCPs; to assume that in insolvency the pre-agreed order of losses in the rule book would be followed. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Non default losses  Finally, it is important to emphasise that I have been talking throughout about losses at a CCP following default of a clearing member. This, as I said at the outset, is the main vector of risk for a CCP. But it is not the only one. Non-default losses can arise for a number of reasons, particularly operational failures, including following cyber attack, or losses arising from the investment of the collateral held by CCPs. In such cases, CCPs do not generally have recourse to the resources of their members. Losses need to be absorbed by the capital of the firm and if that is insufficient the CCP faces insolvency like any other firm.
Mervyn King: A tale of two cities Speech by Mr Mervyn King, Deputy Governor of the Bank of England, at Cardiff Business School, Cardiff University, 18 June 2001. *  *  *  Vice-chancellor, ladies and gentlemen, It was once said that economic forecasters are the unfathomable in pursuit of the unpredictable. As a student I found this odd. Whenever England played Wales at rugby the result was wholly predictable. The reason was simple. My fellow-student, Gerald Davies, ran faster than Englishmen, even when he carried the ball and they didn't. Economics is, unfortunately, less straightforward. Yet any decision that involves an elapse of time between its implementation and its effects requires a forecast. Time lags are the essence of the transmission mechanism of monetary policy. And that is why the Monetary Policy Committee spends much time thinking about the likely future path of the economy. The severe limits on our ability to anticipate future events means that forecasts can be no more than a description of the relative likelihood of a range of possible outcomes. Anyone who presents you with a point forecast for the future path of the economy is either concealing the most interesting part of their analysis, or suffering from self-deception. So the Monetary Policy Committee presents forecasts in terms of probabilities. And it is the balance of risks to the economy which determines monetary policy. So what are the balance of risks to the British economy at present?

There is, I believe, broad-based support for the objective of setting interest rates to meet the inflation target. Quarterly opinion polls since November 1999, commissioned by the Bank of England and published in our Quarterly Bulletin, provide support for this proposition. But it is clear that the MPC still has much work to do to explain how interest rates affect the economy. Building a constituency for low inflation is a primary objective of the Bank, and one to which we attach great importance. Support for low inflation, and stability more generally, cannot be taken for granted, nor based solely on fading recollections of boom and bust. There is a new generation with little memory of the high and unstable inflation rates of the past. The Bank has, therefore, started an annual competition for schools in which students play the role of the Monetary Policy Committee. The first year's competition attracted over 200 entries, and culminated in the national final at the Bank of England in March. Next year's competition has just been announced, and I would encourage as many schools as possible to enter the competition and pit their wits against the MPC. I am delighted to report that Bassaleg  BIS Review 58/2001  3  Comprehensive School in Newport, who won last year's South Wales regional heat, were the first team in the UK to enter this year's competition.
Tarisa Watanagase: Financial policy and strategy in ASEAN countries Address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the 4th National Conference of Economists, Chiang Mai, 24 October 2008. *  *  *  Distinguished Speakers and Guests, Ladies and Gentlemen, It is a great pleasure to be present at this year’s National Conference of Economists on the theme of “ASEAN Economic Development”. Today, my brief remark on this important topic will focus on two parts. First, I would like to highlight the economic strengths of ASEAN, and how financial policy and strategy have a role in enhancing such strengths. Second, I would like to share my view on the preparations that ASEAN together should make to weather the global financial storm. First, on the strengths of ASEAN, I would like underscore that ASEAN has always been an important economic and political force. In fact, the region is becoming an important source of growth for the global economy as several ASEAN members are the world’s fastest growing economies. ASEAN has always been active trading nations. Its external trade accounts for almost 5 percent of the world’s exports and imports in 2006. This ratio is a big jump from less than 1 percent two decades ago. It also represents a rate of growth over that period of average 34 percent per annum, compared to less than 20 percent growth rate of world trade. ASEAN exports are not just raw materials and prime commodities.

Without a proper legal system, it becomes harder to trade in almost any financial instrument. Two distinct effects may be considered. On the one hand, yields may rise and consequently asset prices fall. In other words, asset yields may incorporate a “legal risk premium”. It is interesting to note that under the Basel II system legal risk is a part of operational risk, which implies that it is taken seriously by the regulators. On the other hand, an inefficient legal system may simply lead business to move elsewhere, namely influence the quantities rather than prices. The importance of the legal environment was recognised most notably in the January 2007 Bloomberg-Schumer report, “Sustaining New York’s and the US’s global financial leadership”, which reported that “a firm and predictable legal environment was the second most important criterion determining a financial center’s competiveness.” An efficient legal system does not, of course, always imply more (and more restrictive) rules. A balance needs to be struck between restrictive rules and a lighter approach, which may be important for the overall competitiveness of financial centres. The current debate about the competitiveness of the US marketplace (in particular in relation to its British competitor) emphasises that this balance is not always easy to find. 3. Financial globalisation and innovation  Let me now turn to some issues related to the impact of financial globalisation and innovation on legal systems.
Forecasts for the repo rate Monetary Policy Report 1/2009  Source: The Riksbank  Personal judgements are also necessary in normal situations; and the forecasts in the main scenario published by the Riksbank in the Monetary Policy Reports and Updates are produced in this way – with support from models but with the addition of considerable personal judgements. The forecasts gradually emerge during a rather long and labourintensive process that spans several weeks. 6  BIS central bankers’ speeches  The forecasts in the alternative repo rate scenarios, on the other hand, are produced in a different manner. Here we use the main scenario as a starting point and then make a purely model-based adjustment using RAMSES. No personal judgement over and above that in the main scenario has been made. The forecasts in the alternative repo rate scenarios are thus less thoroughly analysed than those in the main scenario. If the alternative repo rate scenarios were supplemented with personal judgements, the forecasts and mean squared gaps would probably look different. The main reason for this simplified approach is that it would require too many resources to produce complete, detailed forecasts for several different repo rate paths. Of course, it is not written in stone how main forecasts and alternative scenarios should be produced, and the Riksbank is currently reviewing the decision-making process to see how it could be improved. But this is the way we have worked until now.

It has a complex system of retirement security, with multiple pension schemes in different provinces and for different groups. But China is in the process of reforms, integrating its systems and seeking to provide adequate coverage for all workers, and I think they will be getting there. 19. Even in ASEAN, Thailand is going to begin ageing before long. And the Asian countries that grew quickly a few decades ago are also entering the ageing phase – societies like Japan, Singapore, Korea, Taiwan and Hong Kong. We don’t face quite the same problems as the rest of the world in Singapore – we have a defined contribution pension scheme which doesn’t have 2  BIS central bankers’ speeches  the same problems of sustainability. But this is a global challenge. Low interest rates and societies that are ageing and fortunately living longer will pose challenges to retirement security everywhere. 20. Globally, therefore, we need fundamental reforms. We can’t fix the problem through investment strategies, certainly can’t fix it by monetary policies. It needs fundamental reforms. 21. First, we have to enable people to work for long than they used to, in virtually every society that’s getting older, and make it attractive for older people to work. Fortunately, each new generation of people entering their senior years is also healthier.
The last part of my speech today will focus on the consequences of these trends for our decisions in the management of the Government Pension Fund Global. Global imbalances Let me start with the change in the world’s economic geography and the resulting gains. Strong economic growth in China, India and several other emerging economies has lifted hundreds of millions of people out of poverty. African countries have also experienced a growth spurt and the number of people living in extreme poverty has fallen considerably over the past two decades2. This is a continuation of a long-term trend. According to figures from the World Bank, the share of people living on less than USD 1.25 a day decreased from close to 43 per cent in 1980 to just over 21 per cent in 2005. Chart: GDP index 2000 and 2010 The strong growth in the emerging economies can perhaps best be illustrated through a comparison with western economies. If GDP is set at 100 in the year 2000, GDP growth would have reached 112 for the euro area and 118 for the US up to last year. The figure for Brazil is 142 and 271 for China. If the trend continues, China will outgrow the US to become the largest economy in the world in the course of the next 10–20 years. 1  Here, the term emerging economies includes developing economies  2  Pinkovskiy, Maxim and Xavier Sala-i-Martin (2010), “African Poverty is Falling...Much Faster than You Think!”, NBER Working Paper 15775.

Changes in, for example, property prices are routinely taken into account in such a framework since the trajectory of the policy rate for the forecast horizon is set by the outlook for inflation and output, and these outlooks are affected by changes in property prices among other things. However, it is close to impossible to properly quantify, or capture the risks, of overly sharp corrections of property prices some time in the future. We therefore have to take risks of that kind into account in a different way than in the normal approach, where the forecasts for inflation and the real economy serve as the foundation. This is done by adjusting the timing of the policy rates changes, for example by raising the policy rate somewhat earlier than would be justified by the forecasts for inflation and the real economy. By doing so, we hope to minimize the probability of a hard landing scenario. Concluding remarks If I were to sum up my experiences from the last few years, I think three conclusions can be drawn. First of all, as long as asset price inflation only is deemed to be a macroeconomic risk, it can be addressed within the framework of a flexible inflation target. If it is deemed to be a threat to the stability of the financial system, the brunt of the policy response would not be on monetary policy, but rather on the regulatory side.