samchain/econo-pairs-v1 huggingface dataset:
In other words, Sweden is now in the sixth year of favourable economic growth. The 3% average is much the same as during the upswing in the 1980s but clearly above the annual average of 2% achieved in the 20 years from 1970 to 1990. It may be more than we can expect to sustain in the long run. An important reason why it has still been possible to keep inflation down in recent years has been the existence of unutilised capacity. This in turn has to do with the deep recession from which the recovery started and the comparatively rapid expansion of capacity since then. Medium-term inflation expectations have gradually stabilised around the 2% inflation target. At times, however, including the recent period, transitory price movements have brought the annual average change in the CPI just outside the lower limit of the target’s tolerance interval. There have even been periods when trend inflation has been lower than expected. For the decision-making of monetary policy, as the Riksbank has pointed out earlier, transitory effects on inflation are normally a secondary consideration. We are working to clarify how the target formulation is applied in order to dispel any uncertainty about how we should appraise direct effects on consumer prices that come from movements in, for example, house mortgage interest costs and indirect taxes. Altered conditions for international developments Last autumn, in the September Inflation Report, the Riksbank pointed to a growing risk of a weaker international trend on account of the crisis in Asia.

Mr Bäckström discusses the monetary policy situation in Sweden Speech by the Governor of the Bank of Sweden, Mr Urban Bäckström, at Stockholm Chamber of Commerce and Veckans Affärer on 2/2/99. Thank you for the invitation to attend this conference and talk about “The krona and the interest rate”. I shall be speaking mainly about the current monetary policy situation and the factors that may be crucial for the policy’s future formulation. However, now that the Riksbank is directed by the six members of the new Executive Board, which also makes the monetary policy decisions, the decision-making process has changed. So I shall begin by briefly describing how monetary policy will be decided and presented in this new environment. The new process for monetary policy decisions At 1pm on Thursday 11 February, the new Executive Board of the Riksbank will be convening for its first meeting specifically devoted to monetary policy. Compared with the Board’s ordinary sessions, the discussion at what are called monetary policy meetings is to cover monetary policy more comprehensively and conclude with a decision on the policy’s future stance. The discussion will be minuted and published in this form on 6April, around eight weeks after the event. Moreover, a brief account of the grounds for the decision will be presented in a communiqué on the day after the meeting, in this case at 9.30am on Friday 12 February.
Mounting losses quickly depleted their capital base, and, with a few notable exceptions, the banks found themselves in desperate need of massive support measures by the public sector. To address these weaknesses, a considerable amount of work has been done and is still underway in the FSB and in a number of working groups of the Basel Committee on Banking Supervision. In line with, and in full support of these efforts, I am convinced that a more robust capital framework needs to be built around the following features: •  The amount and the quality of capital have to be increased very substantially. Capital buffers need to be high and robust enough for banks to survive a crisis on their own and thus to foster confidence in the system as a whole. In the medium term, this will be feasible without causing drastic adjustments at banks that might be harmful to the real economy. Looking at the banks that received public support, many of them paid out more in dividends and share buybacks during the years preceding the crisis than they subsequently faced in losses. •  As a supplement to the risk-based capital requirements, a simple and commonly defined leverage ratio restriction needs to be introduced. A leverage ratio prevents the buildup of excessive leverage and serves as a backstop to the complex, but fallible risk-based capital requirements. •  To address procyclicality, banks will have to build up capital buffers above the minimum requirements in good times.

BIS central bankers’ speeches  3  As you will recall, in January this year a recommendation on dividend distribution policy was adopted in which banks were urged to keep conservative dividend distribution arrangements so as to preserve their solvency. This recommendation will be shortly reassessed. In turn, common criteria have been laid down for recurring decisions such as authorisations for the acquisition of qualifying holdings in credit institutions, assessment of fitness and properness of board members, or the requirements to be made in capital reductions and issuances. Finally, I must highlight the relevant role played by the SSM in the management of the Greek crisis. The SSM not only monitored the situation of the banks continuously, but, once agreement was reached between the European and Greek authorities last summer, it was entrusted with determining the recapitalisation requirements of Greece’s four significant institutions on the basis of a specific comprehensive assessment exercise, whose results were recently published. In the coming months, the SSM must ensure that the recapitalisation of these banks goes ahead as stipulated. 3. Some challenges  That said, and as I stated at the outset, the SSM has numerous challenges to face in the near future. I would like to mention four in particular. Firstly, the microprudential policy stance sought must be clearly defined. The SSM, despite its exemplary start-up, is still under construction and its criteria, practices and specific objectives have not yet reached the degree of stability desirable.
The purpose of this analysis is to understand the extent and types of prevailing crimes that pose money laundering threat in Malaysia, gauge the level of the country’s attractiveness to money laundering, and identify methods and origins of the proceeds of crime, in particular whether the proceeds are generated domestically or abroad. In assessing vulnerabilities, the country’s features or systems, in particular the characteristics of Malaysia’s economic, legal and geographical environment that make Malaysia attractive to money laundering activities were assessed. Vulnerabilities in the financial and non-financial sectors and their attractiveness to money laundering arising from the structural risks inherent in the sector/industry, such as, the size of the industry, volume turnover, the products and services offered and the types of clients served were also assessed. The sectors assessed under this NRA are the financial institutions, the designated non-financial businesses and professions (DNFBPs), the non-profit organizations (NPOs) and the legal persons (body corporate or unincorporated). Terrorism Financing is assessed on its own and broadly covers its specific indicators of threats and vulnerabilities. Given its unique characteristics, factors associated with terrorist financing are vastly different from those of money laundering. For example, the source of funds for money laundering activities has to come from criminal proceeds, whereas funds used for financing of terrorist activities may come from either criminal activity or legal sources.

The bond market and other markets where there is direct contact between borrower and lender will gain a competitive advantage. New requirements for banks must also be followed up, again with improved regulation. The group comprising the twenty largest economies in the world 8 are now discussing how to tackle the crisis and prevent it happening again. It will be important to avoid protectionism and trade wars. Moreover, the ambition is to establish a new and more sustainable financial architecture. Markets are integrated and banks are global, while the supervisory authorities are national and the application of rules varies. Supervisory authorities must be strengthened and adopt a uniform approach to banks, and regulations must be improved. National supervisory authorities have tended to be reluctant to impose stringent requirements on their banks for fear that their competitiveness will deteriorate. It is important to avoid such slippage in the rules towards an agreed minimum level that is too low. For Norway, it is essential that rules are applied stringently and uniformly in all the Nordic countries since banks based in Sweden and Denmark have large market shares in Norway and Norwegian banks have ambitions in Scandinavia. In recent years, there has been little cooperation across countries in the field of macroeconomic policy. The view has been that all is well as long as each country keeps its own house in order.
First, the financial crisis made it obvious that an ability to understand and anticipate what is happening in the household sector is essential to gauging the strength and resiliency of the U.S. economy. Second, our policy actions are intended to change the incentives facing households, so it is important to be able to gauge how our policies are transmitted into household financial decisions. Good information on household borrowing, for example, allows us to see how monetary policy affects outcomes such as auto loan originations. Third, better household finance research helps support our community outreach and development missions. A major challenge to achieving these goals is that household finances have traditionally been poorly documented. We have lots of information about corporate sector debt and equity, but comparable basic facts about the household sector are much harder to come by. For example, the lack of timely, comprehensive data made it more difficult to understand how vulnerable the household sector’s financial position had become by 2007. I’m happy to say that we’ve made progress in beginning to close this data gap. At the New York Fed, we’ve been able to develop products that support a much better understanding of the household sector’s borrowing behavior, ranging from loan-level mortgage information to credit card utilization and borrowing limits. This has greatly improved our knowledge of household debt burdens, new borrowing activity, debt repayment as well as delinquencies.

We have gained an increasing understanding that how we finance postsecondary education has significant effects on a variety of critical economic outcomes, including economic growth and inequality. For example, our research suggests that higher student debt and delinquencies reduce household formation and depress homeownership. But there are many important questions still left unanswered. What is the relationship between the amount and type of educational investment that people make and their outcomes? What attributes are associated with borrowers who are more successful at  1  2  Payback Time? Measuring Progress on Student Debt Repayment. BIS central bankers’ speeches  repaying their student loans? Are there particular types of degrees that are associated with better performance with respect to student debt repayment or with better living standards earlier in life? What are the best interventions to help borrowers avoid the consequences of delinquency and default, and to limit any default costs to taxpayers? Do borrowers who use programs like income-based repayment eventually succeed in paying off their debts? How do income-based repayment programs affect important decisions such as labor supply, consumption and household formation? These are important questions for the nation, as the human capital of our citizens is far and away our most important asset, and student loans are an important mechanism for financing needed investments in that asset. But it is very hard to answer these questions with existing data.
The scenario of global economic and financial catastrophe has dissipated, and confidence seems to be recovering. One piece of evidence that the “free fall” of the world economy may have stopped is the evolution of growth projections for the year (Figure 14). After the sharp deterioration post-September 2008, the downward revision to the growth expected for this year has moderated in magnitude significantly in most of the economic zones. In Japan, which has suffered one of the most intense revisions in the past few months, the latest forecast revised upwards the expected growth for 2009. GDP growth for 2010, which had posted small but systematic falls since September, is showing stability in the latest forecasts. Combined with this, perceptions regarding investors’ appetite for risk seem to be picking up. Sovereign premiums have declined, capital flows to emerging economies are returning, interest rates on Treasury bonds are increasing in many economies and the various expectations indicators are signaling some degree of recovered confidence. Extreme pessimism is withdrawing, but we cannot expect an accelerated recovery. The confidence crisis is one piece – an important one – of the explanation of the synchrony and strength of the shock that occurred at the end of last year. However, the distortions that motivated this confidence crisis will have persistent effects, even after the confidence is fully recovered. The loss of confidence explains the sharp and sudden downfall of the global economy, as well as its propagation to the other countries.

Let me proceed, then, by showing you what has been happening in the world and in Chile and how we can observe the increase in uncertainty in agents’ expectations and its propagation around the globe. The global crisis of confidence I will start by listing the main aspects I will be focusing on: •  The synchrony of this crisis is unprecedented. The drop in output made no distinction among economies’ strengths or weaknesses. •  Global uncertainty and distrust were particularly acute towards the end of last year. •  The severe drop in demand was concentrated largely in durable goods. Investment and consumption of these products collapsed by the end of 2008. To contextualize this episode, I will begin by recalling that a debate about the accumulation of strong global imbalances had been going on for several years, focusing on their implications and ways to correct them. The Central Bank of Chile identified them as a significant risk in many of its Monetary Policy Reports. Meanwhile, the world proceeded with very unusual dynamism. World GDP grew by an annual average of nearly 5 percent between 2004 and 2007, while commodity prices increased manifold. Copper, for instance, went from selling at about $ per pound in late 2003 to approaching and even briefly surpassing $ during April and July 2008. Oil went from trading at around 30 to 35 dollars per barrel in late 2003 to close to 150 dollars last July.
I agree with Professors Mandel and Dvoák (2022) from the University of Economics and Business who stated in their article "Current global inflation" that Milton Friedman's view that restrictive monetary policy is not dependent on the support of fiscal policy and can be effective in its own right was formulated for a situation where there was an appropriate amount of bank liquidity. In a monetary system with huge excess liquidity and induced high inflation, a reduction in the state budget deficit plays a key role in the fight against inflation and significantly eases the position of the central bank. Therefore, defeating inflation in the long term is conditional on coordination between monetary and fiscal policy. If fiscal policy records increasing budget deficits, monetary policy will find it very hard to ensure low inflation on its own, in a system with such a huge liquidity surplus and a willingness of banks to buy bonds. That is why I said at the press conference after each of our monetary policy meetings that reducing the country's debt is a further key condition for lowering inflation. It is essential in the fight against inflation that the state budget deficit falls as much as possible compared with the actual outcome of the previous year. It would be ideal for the fight against inflation if expenditure declined year on year compared with the actual outcome of the previous year (to dampen demand) and indirect taxes were not increased (to avoid increasing inflation).

Consequently, I am not optimistic that a modified fixed exchange rate regime, such as that pursued in Iceland before the inflation target was adopted in 2001, will be successful.7 In the event that currency union membership is not an option, the question arises whether it would still be desirable to remove the temptation and source of instability represented by a flexible or floating exchange rate, either through a currency board or through unilateral adoption of another currency. The preconditions for such radical steps to be sensible are much farther off on the horizon, however, than EMU membership, should that option become available. There are two primary reasons for this. First of all, recent experience has demonstrated that the provision of central bank liquidity can determine whether a country’s banking system survives a period of extreme stress. It failed to prevent the collapse of the Icelandic banking system, but many relatively healthy banks in Europe and elsewhere would probably have failed as well in the autumn of 2008, with all the economic and social cost implied, if their national central banks had not provided them with liquidity during the turmoil and were it not for cross-border co-operation among central banks. Therefore, I am of the view that unilateral adoption of a foreign currency or a currency board could only be considered prudent if all of Iceland’s largest banks were owned by a strong foreign bank with the financial strength to provide them with liquidity during times of distress.
But it is human creativity nonetheless, just as Hamlet was the creation of Shakespeare not Guttenberg and the theory of relativity was the creation of Einstein not Lippershey. What applies to board games applies to other spheres of human endeavour. Driverless cars are not, in the main, driverless. Most have a human override for situations where the algorithm experiences circumstances outside its sphere of knowledge, the automotive equivalent of Move 78. Alexa hears better than me and learns faster than me. But I can still deliver a better talk about creativity to students at the GSA, even if I did draw on her knowledge in putting it together. If that ever changes, I can always pull the plug. Institutions for the 21st Century At the same time, this co-evolutionary path will not be an easy one. Even if (and it is a big if) as many jobs are created as are destroyed by the Fourth Industrial Revolution, there will be transitional costs and societal casualties to manage. As during past waves of innovation, making a success of this revolution will require a reworking of the social infrastructure if these costs and casualties are not to tear the social fabric. There are many possible dimensions of this reformation. One of the most important is close to the GSA’s heart – education. This is also an issue close to the Bank of England’s heart. Education on economic and financial matters is one of the public goods the Bank can provide and is providing.

In each Industrial Revolution, a first imaginative step resulted in a great leap forward for societal living standards, a mass flourishing.18 In that sense the three industrial revolutions of the past three centuries fit the longer-run evolutionary arc of humankind. It is creativity and imagination, fuelled by big brains and nourished by cooked meals, that set humans on their jet-propelled evolutionary path. The rapid, ideas-fuelled, progress made by societies over recent centuries is a continuation of that ever-upward evolutionary arc. Except, that is, for one small detail. The evolutionary arc of humans has not been ever-upward. The historical path has not been a North-bound ascent. While human ingenuity and creativity have been ever-  17 18  Haldane (2018a). Mokyr (2011). 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  present, economies and societies have in fact spent protracted periods crabbing sideways. Prior to the first Industrial Revolution, living standards appear to have been essentially static for several thousand years.19 Living standards in Glasgow in 1750 were little different than their ancestors constructing Hadrian’s Wall. Levels of poverty, nutrition, infant mortality, height and longevity would also have been indistinguishable. Prior to the Industrial Revolution, societies and economies stood still, financially and physiologically. There was flat-lining, not mass flourishing. Societal progress was far from being a social norm. What explains this great pause in living standards? It was not through lack of ideas and imagination. People did not suddenly make like monkeys for millennia.
In case of an accelerated credit expansion in the banking system in such an extent that would create inflationary pressure despite the active use of the said open market operations to drain the excess liquidity in the market, required reserves may also be used effectively to support liquidity management. The Central Bank, the primary goal of which, entrusted to it by law, is to achieve and maintain price stability, will continue its practices to enhance the effectiveness of the monetary policy and liquidity management, also in 2008. Accordingly, the Central Bank may change not only its liquidity management strategy, but also the borrowing and lending interest rate margins in cases of unpredictable changes in market conditions and emergence of needs that may arise. As always pointed out, the Central Bank deems the stability and development of financial markets as a supportive objective for the efficient implementation of the policies pertaining to price stability. Obviously, under the floating exchange rate regime, the Central Bank is able to implement the YTL liquidity policy in a more flexible manner than it can under a fixed currency peg regime and can act more promptly and flexibly to meet the YTL liquidity needs of the banking system. Also, the Central Bank can prevent excessive fluctuations in money market interest rates as long as they are consistent with the inflation target. Furthermore, the Central Bank provides the banking system with foreign exchange liquidity via short-term foreign exchange deposit auctions, albeit at limited amounts.

The importance of Special CPI aggregates Due to its comprehensive context coming from its definition, consumer price index can be exposed to temporary fluctuations. Core indicators allow for differencing out the price movements in items unaffected by monetary policy actions, and thus enable much better analysis of the main inflation trend. For instance, the impact of a significant increase in energy prices on consumer prices can be analyzed by using a price index excluding energy prices. Similarly, a temporary price increase arising from one-time movement in special consumption tax levied on tobacco products can also be identified by using special CPI aggregates excluding the item in consideration. A series of supply-side shocks that have occurred over the last 2 years have underlined the importance of special CPI aggregates. The relevant indicators, which may also be called as “core” indices, have played an important role in the communication of monetary policy decisions in 2007. Undoubtedly, it is not possible to define a single core indicator for inflation that can disregard all temporary effects observed in consumer prices. For instance, the Special CPI Aggregates issued by the Turkish Statistical Institute does not exclude processed food group. As we have experienced recently, the drought has a negative impact on core measures via processed food prices. In other words, although the main inflation trend has not worsened, the growth rate of special CPI aggregates can display increases stemming from processed food prices.