samchain/econo-pairs-v1 huggingface dataset:
The issue of when this will happen does not have to do with either the actual level of unemployment or the number who were employed when activity last peaked in the late 1980s. It depends instead on how serious any bottleneck problems are becoming and how strong those with jobs consider their bargaining position to be in wage negotiations. Briefly, then, important factors in the assessment of the risks of inflationary tendencies are how well the labour market is functioning and how quickly resource utilisation is rising. Monetary policy contributes to stability In an upward cyclical phase, the move towards a situation where the tensions in markets for goods, services and labour threaten to gain the upper hand and jeopardise price stability is a gradual process. That makes it difficult to tell exactly when the imbalances constitute a genuine problem. Observers and those who decide economic policy have to assemble the pieces of this puzzle. In an economy that is approaching a strained situation in resource utilisation, signs that imbalances are beginning to build up will appear with increasing intensity and frequency. As more and more pieces of the puzzle fall into place, they ultimately provide a basis for action. The whole of this process is complicated by the time lag before monetary measures elicit effects. Our premise is that the full effect of an interest rate adjustment materialises after one to two years. So measures taken today would not have their full effect until some time during 2002.

Not because I have dramatically revised my assessment of inflation prospects but rather because resource utilisation is still rising and a shift can be discerned in the risk spectrum. We will have to bear these things in mind so that the development of production and employment can remain stable. 3  BIS Review 109/2000
Prasarn Trairatvorakul: “Challenges and Opportunities” Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the German Business Talks event, Bangkok, 28 February 2012. *  *  *  Good evening, Ambassador Rolf Schulze, Distinguished guests, Ladies and Gentlemen, I would like to thank the German Embassy for inviting me to give the key-note speech at the German Business Talks event. Germany is by far the biggest trading partner of Thailand within Europe, accounting for over 20 per cent of total trade volume between Europe and Thailand. With the increasing presence of German multinational corporations in Thailand, I hope that our businesses will become more integrated and continue to prosper together into the future. In this session, I would like to focus on two key issues. The first concerns the future challenges facing Thailand. The second issue is about the Bank of Thailand’s (BOT) role in meeting these challenges. Let us begin with the challenges. On the external front, the global economy is beset by substantial risks and uncertainties. Major advanced economies are still grappling with fragile recoveries. In the US, despite some recent positive news from the labor market, economic activity continues to be weighed down by substantial debt over-hang. This inhibits a full recovery in the housing sector and consumer spending, which together form the backbone of the US economy. In the euro-area, everyone here is obviously keenly aware of the unfolding sovereign debt crisis.

Such an environment will also make the process of adjustment and economic transformation easier. In this respect, I believe that we have the right monetary framework to best 2  BIS central bankers’ speeches  achieve this. The BOT’s inflation targeting framework has served us very well since its adoption over 10 years ago. Apart from serving as an anchor for macroeconomic stability, the BOT can also undertake steps, or act as a catalyst for the necessary changes, that will serve to enhance Thailand’s competitiveness and augment economic adaptability. Most directly, the BOT can strive to enhance the effectiveness of the financial sector in serving as intermediaries of capital. Our current strategy is to broadly deliver tangible improvements in four key dimensions. First, encourage financial innovation and the expansion of available financial instruments. Second, broaden the choice available to firms and households in terms of financial services. Third, reduce the cost of these financial services. And finally, improve access to them. To this end, the BOT has embarked on a multi-pronged approach that involves a number of strategic plans. Chief and foremost is the second Financial Master Plan. This plan, which takes into account major global developments such as regional integration and global regulatory reform, will further this vision of a modern and inclusive financial sector landscape. At the same time, we are pursuing ways to improve financial system infrastructure, including through upgrades to the payment systems to promote more efficient settlement of private sector transactions.
And whilst the CP is not Covid related, its relevance is clear: small and growing firms must plot their path out of the current stress – through the Covid-fog back onto the mountain path – in order to continue contributing to the health of the financial system and of the economy, and supporting competition in financial services as they do so. Proportionality and rock-faces A key part of our approach to facilitate effective competition has been to ensure our rules and requirements are proportionate to the size and complexity of firms. For example:   We have defined a more limited set of expectations required of banks as they enter base camp. In particular we have created a mobilisation phase where firms are authorised with restrictions, enabling them to attract the necessary capital and make the necessary investments at the very start of their journey to becoming a fully functioning bank;    In 2017 we started looking at a refined approach to assessing capital adequacy across Pillars 1 and 2A in the round for firms on the standardised approach, meaning as of end-June 2020 25 smaller firms had had their Pillar 2A add-ons reduced by an average of 1.44% of risk weighted assets; and    We introduced a simplified Internal Ratings Based (IRB) credit risk model application process for smaller banks, with three models approved under this process so far and eight more in the 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  application pipeline.

But we still expect new banks to maintain capital resources to support their business for 12 months ahead (whilst remaining above the operating expenses buffer), the reason for which brings me to the second change;  Scanning the Horizon, 24/05/19 – https://www.bankofengland.co.uk/speech/2019/sam-woods-building-society-association-annualconference-london 8  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6    Whilst we recognise that obtaining regular new capital is often necessary for new and growing businesses, we are calling an end to ‘just in time’ capital planning. Instead, we expect any new equity to be injected well before a firm hits its buffers and for there to be a path to the point at which the bank will be self-sufficient in capital generation. If we observe evidence of ineffective capital planning, we will increase our supervisory intensity and consider whether further action is required. It is unsustainable for a firm to remain near base camp making losses forever. And persistent problems mean we may need to shift our focus to considering other routes down the mountain (as I will explain later); and finally    Growing banks are expected to develop their stress-testing capabilities so that they are ready to transition to full stress-test based buffer requirements once they reach maturity (typically but not necessarily five years after authorisation without restrictions). This has the potential to result in a sizeable step-up in capital requirements, for which firms need to be prepared.
Some observers draw parallels with earlier revolutions in economic history, for example the introduction of steam-engines in manufacturing in the 18th century and the breakthrough for the combustion engine and electric motors in the late 19th century. A closer look at these two earlier industrial revolutions shows that in Sweden the impact of the steamengine was delayed. Developments here had more to do with the transformation and commercialisation of farming in connection with land reforms. It simply took time to build up the institutional arrangements that made a widespread use of steam-engines possible. Sweden did not begin to participate in the first industrial revolution until the middle of the 19th century, when the construction of railways gave steam locomotives a crucial part to play in the new form of communication. At the time of the second industrial revolution, however, when the conditions for production were changed again by the petrol engine and the electric motor, Sweden was in a better position to reap the benefits. In that the social structure was more suited to adopting and utilising the new technology, the pace of modernisation was faster. Production became increasingly efficient as the industrialised society took shape. Electrification, motor vehicles and aviation all left their mark on developments in much of the 20th century. At the same time, it was probably not the new inventions as such that provided the conditions for the rapid economic growth in the 19th and 20th centuries.

Distinguished delegates, part of the reason for the resilience of Zambia’s financial sector were the comprehensive financial sector reforms that have been systematically undertaken after the banking sector collapse in the second half of the 1990s. These reforms were promulgated under a Financial Sector Development Plan (FSDP) that was implemented to address weaknesses in the financial sector, identified in a Financial Sector Assessment Programme (FSAP) conducted by the International Monetary Fund (IMF) and the World Bank in 2002. Zambia’s reforms included the following: the increase in capital requirements for banks; consolidation of the supervision of bank and non-bank financial institutions under the Bank of  BIS Review 63/2010  1  Zambia; legislative reform that gave the Bank of Zambia powers to deal with failing institutions; and the promulgation of corporate governance guidelines including the conduct of outreach programmes on good corporate governance practices for the financial sector and the introduction of credit reference services. The Bank of Zambia is continuing with its work to improve the financial sector and enhance the role of the financial sector in the development of the country through the implementation of the second phase of the Financial sector Development Plan, FSDP II. The FSDP II will focus more narrowly on issues of competition within the financial sector and extending financial inclusion.
First, we have less of a handle on their impact than we do changes in short-term policy rates and, as I just indicated, that impact may well be less when markets are functioning normally. Second, if the central bank routinely deals in large quantities of government debt, it may find itself more open to pressure from the fiscal authorities, while market participants are more likely to fear that the debt will be permanently monetised. That brings me naturally to the topic of unwinding our present large stock of asset purchases. We have committed to maintaining the stock, including reinvesting the cash flows associated with maturing gilts, at least until the first rise in Bank Rate. But at some stage thereafter, as part of the transition back to normality, we expect to start running down the portfolio and withdrawing the associated bank reserves. In principle, we could do this just by letting the gilts mature. However, as Chart 5 demonstrates, it would take a long time to run off organically in its entirety because of the relatively long average maturity of the gilts held: the weighted average maturity of the portfolio is more than 12 years. So more active sales may be called for at some stage,  2  For the United Kingdom, see: Michael Joyce, Matthew Tong and Robert Woods (2011), “The United Kingdom’s Quantitative Easing Policy: Design, Operation and Impact”, Bank of England Quarterly Bulletin, 51(3), pp.200–212.

The first is to make the size of the arrangement larger and more meaningful with respect to possible needs of members. The second is the simplicity of the activation process, especially for the first tranche. This is important for giving assurance to participating members that liquidity will be made available in a timely manner. And the third is the objective of turning CMI into a multilateral facility at a later stage. This last feature, if realized, will provide the region with its own financial arrangement that can help expand the region’s capability in safeguarding financial stability. lt goes without saying that a move to emphasize greater resource commitment by members will entail substantial strengthening in the current regional surveillance process. This is a development that we all should welcome. Strengthening the surveillance process should in fact be a key prior condition for expanding the CMI because it will help make the CMI process credible while reducing the risk of moral hazard. CMI is currently under review. I hope some of the points I have touched upon will be further explored. But whatever the outcome of the review may be, I am confident that it will signify another important step forward for regional financial cooperation. My second thought is on the region’s bond market. Economists in the region have long made known their views that Asia is a region with surplus savings, but the financial surplus of Asia has not been effectively utilize for the benefits of the economies in Asia. This is clearly a missed opportunity.
Changes in unemployment appear to have a fairly immediate impact on wage growth. Chart: Wage growth and domestic inflation Not unexpectedly, there is also a close statistical relationship between wage growth and the rise in prices for domestically produced goods in the CPI7. It appears to take about one year for changes in wage growth to feed through to inflation. Such observations of data provide a picture of some of the interrelationships in the economy, but they say little about causality or how interest rates feed through to the economy. Correlations are nevertheless interesting as a background for the analytical tools that are used in interest rate setting. Chart: The interest rate is an endogenous variable Historically, the interest rate has been set in response to various developments and shocks. In this respect, the interest rate is an endogenous variable. The relationship between the interest rate and other key variables has through history also been influenced by shifting monetary policy objectives. If the interest rate is raised today in response to an unexpected change in price and cost inflation, a fall in capacity utilisation must be expected. However, if the interest rate is increased in response to an unexpected pickup in demand for goods and services, the path will be a different one. In historical data, a higher interest rate can go hand in hand with both lower growth and higher growth. It is therefore demanding to identify the effects of interest rate changes when studying historical data series.

A temporary reduction in the degree of financial integration may result in some “sand in the wheels” of capital movements and reduce the speed of capital inflows and outflows, allowing some further degree of monetary policy independency. This is behind the idea of using capital controls in some emerging market economies. Although even the IMF has supported the idea of using capital controls under extreme circumstances (Ostry et al., 2010), the empirical literature has found only partial evidence of its effectiveness.3 Finally, the validity of alternative tools to deal with episodes of unsustainable capital inflows may be particularly important when the concerns about real exchange rate volatility are relatively high. For instance, in export-based economies with imperfectly developed financial markets, exchange rate fluctuations and persistent episodes of appreciations may result in sustained damages to the productive structure. In such situations, targeted and limited exchange rate interventions may help reduce temporary pressures and at the same time build up international reserves, which act as precautionary savings and self-insurance against the potential consequences of a sudden capital outflow. This has been the route followed in Chile, since the concern about the external scenario has not been the rise in capital inflows, but rather the pressures on the exchange rate and the need to have an adequate level of international liquidity.
Tax-exempt funds are regulated in the same way as prime funds, and they have largely behaved similarly to prime funds following MMF reform. In these remarks, “prime” refers to both prime and tax-exempt funds. 15 In particular, when a fund’s weekly liquidity falls below 30 percent, its board has the discretion to introduce a fee  of up to 2 percent, to impose gates for a maximum of ten business days, or both; when a fund’s weekly liquidity falls below 10 percent, its board is required to introduce a fee of 1 percent unless the board decides to introduce a fee that is higher (up to 2 percent) or lower, or no fee at all, whichever is in the fund’s best interest. Gating is always discretionary. 16 MMF reform did not make prime MMFs less safe by standard definitions; indeed, by requiring prime MMFs to  adopt a system of gates and fees and a floating NAV, the SEC’s intention was to make them safer. 17 Indeed, both regulatory changes increase the information sensitivity of investments in prime MMFs by increasing  the set of states of the world that are material to the payoff (and therefore, on which agents can have asymmetric information). 18 This shift appears to be persistent; consistent with the fact that the regulation has altered the money-like  characteristics of prime funds, outflows from prime to government funds have not reverted.

But, as we have gotten closer to the range of estimates of neutral, what appeared to be a bright point of light is really a fuzzy blur, reflecting the inherent uncertainty in measuring r-star. 4 More than that, r-star is just one factor affecting our decisions, alongside economic and labor market indicators, wage and price inflation, global developments, financial conditions, the risks to the outlook… the list goes on and on. I’ve talked a lot about normalizing our policy around interest rates. In addition, about a year ago we started the process of gradually reducing the Fed’s balance sheet as we work to unwind the 2/4  BIS central bankers' speeches  asset purchase policies put in place during the crisis. In the now-standard Fed practice of communicate, communicate, and communicate, we published detailed plans well in advance on how we would gradually and predictably reduce the balance sheet.5 This process has proceeded smoothly without creating undue market disruption or volatility.6 With balance sheet normalization well underway, the Fed is studying the question of what exactly the new normal looks like. We have indicated that we plan to shrink the balance sheet to the smallest size consistent with the efficient and effective conduct of monetary policy—and that, in the long run, the asset side of the balance sheet will consist primarily of Treasury securities. 7 That’s our strategy, but its execution will depend on the operating framework of monetary policy, among other factors. Here, the Fed basically has two choices.
Such measures should prevent adverse effects on the monetary policy transmission mechanism stemming from the ongoing tensions in parts of the euro area financial markets. They should in particular mitigate the effects of strains in financial markets on the supply of credit to firms and households. First, several measures have been enacted to ensure that banks maintain access to funding markets.   We have decided on three-year refinancing operations to support the supply of credit to the euro area economy. These measures address the risk that persistent financial markets tensions could affect the capacity of euro area banks to obtain refinancing over longer horizons.   Earlier, in October, the Governing Council had already decided to have two more refinancing operations with a maturity of around one year.   Also, it was announced then that in all refinancing operations until at least the first half of 2012 all liquidity demand by banks would be fully allotted at fixed rate.   Funding via the covered bonds market was also facilitated by the ECB deciding in October to introduce a new Covered Bond Purchase Programme of € billion.   Funding in US dollar is facilitated by lowering the pricing on the temporary US dollar liquidity swap arrangements. These measures should ensure that banks continue to have access to stable funding, also at longer maturities, which gives them the opportunity to continue lending to firms and households. Second, some banks’ access to refinancing operations may be restricted by lack of eligible collateral.

In the span of a decade, social media has become a bona fide global marketplace, marketing tool, recruitment platform and social scene. All this points to the double-edged nature of globalisation: While it may have brought people closer together, it also introduces the challenge of promoting greater appreciation of cultural, ideological and sociopolitical diversity. Conclusion Globalisation, once envisioned to be a beacon of unity, has fueled increasing polarisation in recent years. Let’s remind ourselves that in this globalised world, it is important for the contented to appreciate the struggles of the discontented. And, for the discontented to not lose sight of the potential that globalisation holds. And for all of us, to remember – that 75 years after Bretton Woods – the creation of a safe, fair and mutually beneficial global system is still not an easy pursuit. It is, nonetheless, a necessary one. Once again, I would like to welcome everyone to Sasana Kijang. The World Bank, a product of 3/4  BIS central bankers' speeches  Bretton Woods, along with the IMF and WTO, has brought to Malaysia an amazing gathering of thought leaders and experts on globalisation from all over the world. The next two days will indeed be a fine example of globalisation in action. Let me end with a passage from John Maynard Keynes which I think is appropriate for the occasion. “Yet the new economic modes toward which we are blundering are, in essence of their nature, experiments.