samchain/econo-pairs-v1 huggingface dataset:
Interest income grew by 162% over the year and interest expense by 178%. In total, interest income increased by 15.6 b.kr. and interest expense by 13.7 b.kr. to leave net interest income of 1.9 b.kr. Operating expenses, i.e. salary and payroll expenses and other operating expenses, were 1.5 b.kr., depreciation 90 m.kr. and a supplementary contribution to the Bank Employees’ Pension Fund 386 m.kr., in accordance with an agreement between the Fund and its member organisations. By law, the transfer to the Treasury is calculated as one-third of net profit, i.e. 16 m.kr. Profit after transfer to the Treasury but excluding exchange rate gain therefore amounted to 32 m.kr. In 2006, the Central Bank's balance sheet total increased by 159 b.kr. to almost 322 b.kr. at the end of the year. The main explanation is that total Treasury deposits in the Central Bank rose by 135 b.kr. over 2006 to 211 b.kr. at the end of the year. The balance on Government current accounts increased by 47 b.kr. and the deposit in the foreign currency account amounted to 94 b.kr. at the end of the year. Most of the foreign currency deposit is accounted for by the € billion loan taken by the Treasury towards the end of the year to boost the Central Bank's foreign reserves. Notes and coin in circulation grew by 10% to 14.5 b.kr. and the Central Bank's liabilities towards deposit money banks by just over 10 b.kr.

On behalf of the Supervisory Board I would like to thank Lilja Steinþórsdóttir for our pleasant work together. In her place, the Supervisory Board appointed Stefán Svavarsson Chief Auditor. Financial institutions compete fiercely for talented employees, which is not surprising given the pace at which the Icelandic banks’ activities have expanded. It is vital for the Central Bank to have as capable employees as possible in its service. It must take prevailing conditions into account to ensure that this is the case. On the Supervisory Board in 2006, Ólafur G. Einarsson resigned from the post of Chairman which he held since 1998. Helgi S. Guðmundsson was elected Chairman in his place. On behalf of the Supervisory Board I would like to thank Ólafur G. Einarsson for his particularly successful leadership during his years as chairman. The Supervisory Board held 22 meetings during the year. I would like to thank the members of the Supervisory Board for their pleasant cooperation and fine work. I also thank the Board of Governors and employees of the Bank for their very good work during the year and fruitful collaboration with the Supervisory Board. 2  BIS Review 34/2007
In the Bank of Thailand’s Monetary Policy Committee meeting held last month, the committee also shared the view that the global economy is returning to growth with the main impetus being the policy stimulus and a turn in the inventory cycle. Looking ahead, prospect for the recovery to continue into next year appears strong given the policy room that exists in the advanced economies to support growth. Nonetheless, it also needs to be said that downside risks to recovery remain, as uncertainty that can hold back the recovery momentum remains large. In the case of the advanced economies, the key uncertainties include: first, the high rates of unemployment which could stifle the momentum of consumer spending and private demand – the US unemployment rate in October was 10.2 percent; second, the large fiscal debt positions which could heighten investor’s concern on fiscal sustainability and put upward  pressure on long-term interest rates; and third, problems in the advanced economies’ banking systems that could act as a drag on growth because of limited credit availability. These are the uncertainties in the advanced economies that could mark down the pace of global recovery going forward. Moreover, high and rising oil prices could also act as a deterrent to economic recovery worldwide. Therefore, notwithstanding the consensus on the next year’s return to growth, there remains a risk that global economic recovery going forward could be choppy and sluggish.

Turning to Thailand, although the Thai banking sector is resilient and has been largely immune to the global financial turmoil, the impact of the crisis on Thailand has been quite hard owing to the economy’s high dependency on exports. As noted earlier, economic activities contracted sharply in the fourth quarter of last year and in the first quarter of this year, but the situation started to stabilize from the second quarter onward as economic activities began to show signs of improvement consistent with the developments observed elsewhere. Latest data for September point to continued improvements in economic activities, both in private consumption and investment, reflecting largely the benefits that domestic demand has gained from fiscal stimulus and supportive monetary policy. Exports in September contracted by 8.3 percent year on year, much lower than the contractions of 17.9 and 25.7 percents of the previous two months. On the output side, recovery in domestic demand has been met by stronger activities in production. Index of manufacturing production rose by 0.4 percent year on year in September, while the rate of capacity utilization in manufacturing increased to 64.7 percent. On economic and financial stability, economic stability remains intact in Thailand with strong external positions marked by continued current account surpluses, high level of international reserves, and a low and stable external debt. As for inflation, the emerging signs of recovery have not put pressure on domestic prices.
Adair’s talk therefore provides an excellent opportunity to pause and review some of the ways in which policy and theory have been interacting so far. The literature on myopia and the crisis I want to begin with theory not policy, and the paper by Shleifer et al cited by Adair helps to provide an organising framework. This paper reflects the growing response of the economic profession to the crisis, and should hearten us all that theory is alive and well and productive. Unlike most papers written over the past three to four decades, Shleifer abandons rational expectations (RE) in favour of a world in which agents are seriously myopic about certain low probability, high impact risks. It is worth reminding ourselves of the RE paradigm, which has dominated macroeconomics and finance since the ‘70s. It posits a state of affairs in which agents know the world – know the structure of the model, and so have model-consistent expectations. Bad things can happen – but only in virtue of exogenous shocks. And depending on the structure of the world, those bad states can be relatively small beer, as famously argued by Lucas on the relative unimportance of business cycles. Disagreeing with that, the so-called salt-water economists wanted to show that, upon the crystallisation of those exogenous shocks, really bad things, recessions and persistent unemployment, can happen due to flaws – or, as economists like to say, frictions – in the make up of the world.

What seems to be the inevitable consequences of a solely GDP-driven growth strategy include problems of water shortages, which we now see repeatedly on a yearly basis. More worryingly, this trend seems to be intensifying each year as the demand for water continues to rise and is projected to double within twenty years (with current rates of population and economic growth). These coming water shortages have begun to take effect on manufacturing industries; but the more worrying impact has been on villages and communities with limited ability to reserve water. At the same time, opposite, extreme events have also occurred, such as destructive seasonal floods. Recently, bouts of intermittent drought and flood have both caused much destruction. In addition, the expansion of large cities and construction which has interfered with natural drainage routes, such as in the case of Had Yai or the natural water drainage on the Eastern side of Bangkok, are good examples of economic development which have intensified the problem of flooding. The tourism industry is another sector that has seen remarkable growth and has helped sustain high rates of GDP growth. But in the past, such tourism growth has been to no small degree at the expense of our natural environment and destruction of our natural resources. In some places, the environment and natural ecosystem have been put off-balance. Natural scenery which has been part of our national identity and drawn tourists to our country has been diminished, or in some cases ruined.
It is far below the average for the period since the adoption of the inflation target in late March 2001, in spite of the significant tension in the economy. This is a reflection of the progress made in the recent term in bringing inflation expectations to target. The Bank’s key rate has been slightly lower on two occasions since the adoption of the inflation target: in early 2011 and in early 2015. It peaked at 18% in late 2008. It is therefore incorrect to say that the Bank’s key rate is always high, no matter what the economic situation. Nor is it appropriate to say that the Bank’s interest rates are off the charts in the context of Iceland’s economic history: quite the contrary. It is also interesting to compare domestic interest rates with historical interest rates in developed countries. The chart shows that the average of short-term nominal interest rates in the US and the UK was slightly below 5% over the period from 1870 through 2007. This is not far from the short-term nominal rate in Iceland at present, and it should be noted that we are in that part of the economic cycle where the output gap is positive, whereas the business cycle tends to average out over such a long period as is shown in this chart. However, post-crisis interest rates  5  in these countries are far below their previous historical low and therefore much more “off the charts” than Iceland’s.

In my opinion, the monetary policy that has been developing in Iceland during the aftermath of the crisis – a monetary policy framework that is quite unlike its pre-crisis counterpart – has delivered good results in the recent past and is a viable candidate for the future. But perhaps it is like Groundhog Day: with each new beginning, we come closer to the solution. Let us hope so. If we play our cards right, the benefits of independent monetary policy could outweigh the costs. That does not necessarily mean that it is the best of all possible options. Some type of peg is also a possibility that could be explored, although it, too, has pros and cons, like all others. The Swedes raised their policy rate to a high double-digit figure in order to defend their peg, and at one point the policy rate was raised to 500%. The British raised their interest rates to 15% for the same reason. In neither instance was this sufficient, however, because other foundations were no longer in place. Hong Kong managed to defend its peg during the Asian crisis but had to raise rates significantly and resort to a range of unconventional measures, including large-scale intervention in the equity market.
I must hasten to mention however that in striving to increase credit, banks must always comply with the regulations as stipulated in the Banking & Financial Services Act to ensure the safety of customers’ deposits. Furthermore, much more credit needs to be directed to sustainable productive sectors like Agriculture, Manufacturing and Tourism. This entails increasing borrowing options available to the small scale farmers and the SME sector. At current levels, interest rates are too high for the SMEs to access credit and venture into meaningful projects. In order to reduce the incidences of default, the Bank of Zambia has through NB Circular 3/2008 of December, 2008 made it mandatory for every lender in Zambia to go through the Credit Reference Bureau. Any loans approved without passing through the Credit Reference  BIS Review 4/2009  1  Bureau will attract Regulatory Action. This will undoubtedly help to reduce the cost of borrowing. I therefore, urge banks and other financial institutions to continue reviewing the cost of borrowing as part of the process to improve SMEs access to the much needed finances to expand their operations, employ more people, and thereby provide impetus to significantly reduce poverty rates in the country. It is also my hope that the coming on board of the Citizens Economic Empowerment Commission will significantly aid the development of the SME sector. Hon Minister, Distinguished ladies and Gentlemen, As a direct consequence of being an open economy, Zambia has not been spared by the effects of the current global financial turmoil.

Caleb M Fundanga: Growth and development of the Zambian economy Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the Standard Chartered Bank Plc, Livingstone, 7 January 2009. *  *  *  The Deputy Minister of Southern Province, Hon Daniel Munkombwe; The Standard Chartered Bank – Acting Managing Director, Mr. Robin Bairstow Members of the Press; Distinguished Guests; Ladies and Gentlemen Allow me to begin by thanking Mr Bairstow and his Colleagues for inviting me to this occasion which marks the official opening of the Standard Chartered Bank Plc , Livingstone Falls Park Agency. I congratulate Standard Chartered Bank Plc for yet another milestone achievement. Hon. Minister, I have stated at various fora that it is important for banks in Zambia to take actions which support the growth and development of our economy. We need banks to open new branches, such as this one, to increase the convenience for our people to access banking services; thereby increasing the efficiency of our economy and empowering our citizens. In particular, I have been encouraging banks to expand their services to areas with vast economic potential like Livingstone, which represents a Win-Win situation for both the bank and the City. I am glad that, although, Standard Chartered Bank already has an established branch in Livingstone, it has chosen to expand its services to other areas of the City in order to bring its products and services to the customer’s door step.
See V. Ramey (2019), «Ten Years After the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?», Journal of Economic Perspectives, vol. 33(2), pp. 89-114, for a review of the existing evidence. Nevertheless, the estimates are subject to a particularly high degree of uncertainty. Thus, for instance, A. Abiad et al. (2016), The macroeconomic effects of public investment: Evidence from advanced economies, Journal of Macroeconomics 50: 224240, estimates a public investment multiplier of 1.4 after four years for a group of advanced economies. Further, the estimated value could nearly double if the investment is made in highly efficient projects or during periods of low economic growth. Conversely, other studies find that the public investment multiplier cannot, in the short term, exceed a value of 0.6, especially in cases of short-run fiscal stimuli (see M. Alloza and C. Sanz (2020), Jobs Multipliers: Evidence from a Large Fiscal Stimulus in Spain, forthcoming in the Scandinavian Journal of Economics). 9 This multiplier effect largely depends on the degree of complementarity between public and private investment. See Box 5.2 of the Annual Report 2019 of the Banco de España for a detailed analysis of the channels through which public investment supports medium and long-term growth. One of the channels accounting for the high public investment multiplier, even in the short term, rests on the idea that, as it is more powerful in the medium and long term, rational agents consider it in their decisions.

Inflation in recent months surprisingly moved clearly downwards (to stand at -0.3% in October, according to the CPI leading indicator published by Eurostat), mainly in respect of the performance of services and non-energy industrial goods prices, which were weighed down by the relative weakness of demand. As a result, core inflation in the area stands at an all-time low of 0.2%. All of this would be consistent with even more modest inflation rates in the coming quarters than those forecast in the September projections exercise. The worsening course of the pandemic, the drastic new containment measures and the impact this may have on the already fragile economic outlook and on the medium-term inflation forecast (already far below target), have led us to make a clear announcement, following the latest meeting of the ECB’s Governing Council, of our willingness to recalibrate in December the tools to deal with the situation, ensuring accommodative financial conditions and counteracting the impact of the pandemic on the inflation outlook. Amid such a high level of uncertainty as the current one, the best possible contribution economic policy can make is to provide confidence and certainty. In the case of monetary policy, this means ensuring accommodative financial conditions for all economic agents for as long as necessary. In view of how the pandemic is unfolding and its economic effects, we clearly need more time now than what we projected just a few months ago.
My own judgment was that the uncertainty surrounding both the economic outlook and the effects of asset purchases made it difficult to have a strong view as to the relative merits of increasing the asset purchase programme to £ billion or £ billion. Indeed, the inflation projection that was published in the August Inflation Report suggested that either policy was consistent with hitting the inflation target, depending on the future path of interest rates. For me, the decision came down to an assessment of the risks of doing too much versus the risks of doing too little. With regard to the potential risks of doing too little, my main concern was that nominal demand would not recover to a level consistent with hitting the inflation target. My main worry with doing too much stemmed from the uncertainty associated with using asset purchases as a policy instrument. We do not have much experience of conducting monetary policy via asset purchases and there is a risk that their effects will be transmitted through the economy in ways we do not predict and do not want. For example, the substantial injections of liquidity might result in unwarranted increases in some asset prices that could prove costly to rectify. I placed considerable weight on both risks and thought that they were best balanced by an expansion of the programme to £ billion. 6  BIS Review 114/2009  I am hopeful that we have started along the road to recovery.

Consumption and private sector investments were weak, whereas foreign demand continued to slow down, given the economic situation in our trading partner countries. The private agents’ uncertainty about the future was reflected in low propensity to spend and weak credit demand. This uncertainty prevented the transmission of the monetary stimulus to the economy. Moreover, banking system conservative policies maintained the lending standards tight, and prevented the normal functioning of the monetary policy transmission mechanism. Against this backdrop, economic and financial stability of the country was preserved. Private agents’ expectations on inflation were anchored around Bank of Albania’s target, showing a good perception of monetary policy signals, and effective communication of the Bank of Albania. The banking system remains sound and well capitalised with ample liquidity to ensure the return of financial intermediation to adequate levels, in spite of credit qualityrelated problems. Average annual inflation continued the decelerating trend in the third quarter, settling at 1.5%. The profile of inflation was determined almost entirely by the contribution of inflation from prices of agricultural products. Beyond the seasonal effect related to satisfying demand with domestic agricultural produce, these prices fell thanks to the drop in import prices for processed foodstuff in the countries of origin. Prices of other consumer goods categories provided low contribution to headline inflation, hence offsetting each other. Low inflation rates, especially in the long-term component, point to the presence of the negative output gap.
Independence is not only secured in legislation, but also by the people that have embodied it for the past 20 years: Wim Duisenberg, Jean-Claude Trichet, and today, Mario Draghi. I would go so far as to talk of a threefold independence: from national governments of course, but also from pre-existing camps (the hawks and the doves) or schools of thought, even if all three of them have their own well-established economic background. Consequently, they have been able to take a pragmatic approach to innovation: for example, when Jean Claude Trichet addressed bank liquidity risk through the Fixed Rate Full Allotment in 2008 or introduced the first security purchases with the SMP in 2010; and of course when Mario Draghi gave his “whatever it takes” speech in July 2012 or began expanding non-standard instruments in 2014. And finally, independence from trends in the media and short-termism, which I shall come back to later. C - The spirit: general European interest These three men have also upheld the European spirit, through their culture and their convictions. Far from being a technocratic arrangement, initially the euro was actually a political aspiration advocated by Helmut Kohl, Jacques Delors and François Mitterrand in parallel with German reunification. And it is now supported by 75% of euro area citizens, the highest approval rating since 2003, and as much as 85% of Luxembourgers and 81% of Germans [slide 4]. This popular support is our greatest success and our greatest asset.

I would also add that we have now clearly outlined the sequencing of our normalisation: first a rise in key interest rates, which will not come until at least through the summer, and in any case for as long as necessary to ensure sustained convergence of inflation towards our target – I shall come back to this later; then, and only then, after an extended period, a gradual reduction in the reinvestment of the stock of acquired assets. In my view therefore, we do not need to give additional guidance on the timing or other details of the process until next spring, when we could be more precise about the sequencing according to the latest economic data. Nor do I see any need at present to review the future operational framework of our monetary policy: because this question will only arise once we have actually achieved normalisation, and because the tools of our monetary policy are already well known. The range of tools was expanded considerably over the course of the crisis; we will no longer use them all once we have reached the "new normal", but it is in our interest to keep them all to hand. Clearly, our monetary policy will remain accommodative for as long as necessary to achieve our inflation target. 2 - A better understanding of the path of inflation Of course, our main focus remains price stability. In 2019, the fall in oil prices will have a significant downward impact on inflation.