samchain/econo-pairs-v1 huggingface dataset:
The dollar lost some of the strength it had gained during the first months of the year, while the market has pushed back its expectations regarding the beginning of the US monetary tightening process. Nevertheless, long-term rates rose in the US, as in most developed markets. The prices of most commodities rose, especially oil. In this context, the Board has held the monetary policy rate (MPR) at 3 percent, maintaining a significantly expansionary monetary policy stance. Let me now describe our baseline scenario and the main risks we have identified in the two reports I am presenting today. Macroeconomic scenario In recent months, core inflation (i.e. the CPIEFE, which excludes the prices of energy and foodstuffs) has brought no major surprises and its behavior continues to be largely determined by the effects of the peso depreciation and the usual indexation of the economy. However, annual CPI and CPIEFE inflation is still above 4% and, the same as in March, the baseline scenario of this Monetary Policy Report assumes that it will hover around 4% for some months. After the publication of the previous Report, private inflation expectations for this year increased in line with that Report and have remained at a higher level since then. At one to two years’ term, expectations remain at or around 3%, which is the target set by the Central Bank (figure 1). In the first quarter, domestic output and demand grew slightly more in annual terms than was expected in March.

The not so buoyant economy and the gradual decline in inflation-in line with expectationssuggest that, under the assumptions of the baseline scenario, the discussion about the gradual withdrawal of the monetary stimulus could be delayed with respect to March expectations. Overall, any future changes in the MPR will depend on the evolution of domestic and external macroeconomic conditions and their implications for the inflation outlook. Indeed, if inflation is higher and more unrelenting than we have foreseen, the normalization should be anticipated; but if the convergence of inflation to the target is faster than foreseen, the opposite should happen. Let me now present a brief review to the main issues in our Financial Stability Report. The Financial Stability Report Our Financial Stability Report discloses, on a half-yearly basis (in June and December), the recent macroeconomic and financial developments that might have an incidence on the Chilean economy’s financial stability. The Report we present today examines the same external risk scenarios I have just described. As I said, monetary policy in developed economies remains expansionary. The measures of the ECB and other central banks that cut down their benchmark rates have continued to push down sovereign long-term rates, although lately they have shown some reversal. This, 4  BIS central bankers’ speeches  plus still bounded risk premiums, have led to increased issue of debt, mainly corporate. Thus, an environment of low-cost funding and incentives to risk taking persists, where vulnerabilities may be incubating that could emerge as the global financial situation approaches normality.
Hopefully I have not spoilt your morning by delving too deeply into volatility. But, let me stress this, monetary policy divergence will continue to be an underlying source of volatility in the global and regional financial markets. However, issues in financial markets are, by no means, disconnected from the real economy. Indeed, volatility arises from slow recovery, and timid growth outlook for the global economy, the so-called “new normal”. Looking ahead, the global economy is expected to grow only at a subdued pace as some major advanced economies are still grappling with the impacts of the global financial crisis and Emerging Market economies are faced with sluggish exports. Many economists have begun to refer to these conditions as a “new normal” for the global economy where global growth is weak, global merchandise trade shrinks and commodity prices remain low. An important factor behind this global dynamics may be attributed to China’s attempt to rebalance its economy, with more emphasis on domestic consumption, and less on investment and exports. While China is undergoing its economic transition, a slowdown in its growth rate is inevitable. The repercussions of China’s transition have been quite evident on the collapse of commodity prices, leaving many Emerging Market commodity exporters with current account deficits and massive sharp depreciations. Another crucial driver is the trend of “on-shoring” among major economies – leading to a structural change in the global supply chain – where countries like the US and China seek to source inputs domestically, rather than import intermediate goods from other countries.

Thus, even if global growth were to be robust, it is unlikely that Emerging Market export growth would recover quite as strongly. I would certainly be remiss if I failed to mention another potential risk in Emerging Markets which could have impact on the real economy; that is a rapid buildup in Emerging Market corporate indebtedness. Ultra-loose global monetary policies have made it much easier for firms in Emerging Markets to raise funds – or borrow – especially from abroad. However, in the wake of tighter financial conditions, Emerging Market firms are facing greater difficulty to repay or roll over their debt. In summary, I have highlighted two key sources of volatility: first, continued excess liquidity amid diverging monetary policies, along with shifting market expectations about the future path of monetary policies; and second, the global economic transition to the “new normal” steady state. The process is ongoing, and will probably take some time – and it may not be smooth – before the new steady state is reached. 2  BIS central bankers’ speeches  Ladies and gentlemen, Against the backdrop of such a volatile “new normal” world, I will now turn to the implications for Thailand. The impact will be realized on both our financial markets and the real economy. However, as I shall elaborate, the Thai economy has strong buffers that will make it relatively resilient to external shocks. Let me start by looking at implications for the financial markets and the exchange rate.
In addition, those central banks that were not yet independent were given independence, while their duty of accountability was extended. This consensus with regard to the mandate and constitution of central banks led to a long period of low inflation for the global economy, and at the same time demonstrated that a focus on price stability did not result in greater cyclical fluctuations, as had been feared by some. On the contrary: The low inflation rates were accompanied by a very stable real economy, by historical standards. The focus on price stability remains essential, even against the background of the experiences of the financial and economic crisis. Central banks could not have implemented  4  Cf. speech by Fritz Zurbrügg, “Challenges posed by the growth in the SNB’s foreign exchange reserves”, SNB Money Market Event, Geneva, 8 November 2012. 4  BIS central bankers’ speeches  their unconventional measures for stabilising the economy in the crisis if they had not acquired a high level of credibility in the preceding years. Long-term interest rates can only be influenced by a central bank if market participants are convinced that price stability will prevail in the long term. For monetary policy, it remains essential that price stability be ensured, even – and most particularly – in difficult situations like the one we are experiencing at the moment. After the beginning of the financial and economic crisis, the question of what central banks could contribute to financial stability became more important.

Mr. Yam discusses the causes of and solutions to the recent financial turmoil in the Asian region Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, JP, at a symposium in commemoration of 50 years of central banking in the Philippines organised by the Bangko Sentral ng Pilipinas, Manila on 5/1/99. Introduction I am delighted to be here today to help commemorate this important anniversary in such distinguished company. Having recently had my own fiftieth birthday, I can confirm that fifty years is a very venerable age, and I offer my heartiest congratulations to all those involved in central banking in the Philippines over this past half-century. The turmoil of the past eighteen months has made us all feel older and wiser, and it is appropriate that the Bangko Sentral should make use of this anniversary to provide us with an opportunity to review recent events and, more important, to look to what lies ahead. The topic of this session is “Causes of and Solutions to the Recent Financial Turmoil in the Asian Region.” I welcome the way in which causes and solutions are placed here in a regional context, because the nature of the problem in front of us is such that lasting solutions can only be found through wider co-operation, particularly among geographical neighbours. In fact, I should like to go one step further by suggesting that, if the turmoil we see around us is regional, the crisis we face is an international one.
Another explanation is that the participants were too similar to each other – they had the same portfolios and used the same analysis models. In the situation that arose, they all reacted in the same way: they shouted “Sell!”. Capital It is primarily the responsibility of the banks themselves to ensure that they have sufficient capital to retain confidence when losses increase. Nevertheless, a conclusion that can be drawn from the crisis is that the capital adequacy regulations were and are too generous, both in terms of how much capital a bank should have and in terms of the quality of the capital. An example may illustrate what the capital adequacy regulations permitted and still permit. Assume that we a house buyer who borrows SEK 1 million and mortgages his house to 100 per cent. We can estimate the risk weighting for mortgages at 10 per cent. The risk-weighted assets for the loan will then be SEK 100 000. The total capital requirement is 8 per cent, which means that the bank must hold capital amounting to SEK 8 000. The more relevant Tier 1 capital requirement is 4 per cent, so the Tier 1 capital held must amount to SEK 4 000. Thirty per cent of the Tier 1 capital may be hybrids of different types. This means that a bank can get away with equity – real share capital and accrued profits – of SEK 2 800 to provide cover for a loan of SEK 1 million.

A lively discussion is also underway at present on whether central banks should use policy rates to a greater extent to correct imbalances on individual markets. For example, the Riksbank has been encouraged in the media to prevent a bubble developing on the housing market. We naturally take house prices into account in our macroeconomic assessments, and the Riksbank’s interest rate policy has in turn, through its effect on the households’ interest expenses, a considerable impact on the development of prices on the housing market. But the repo rate is not a suitable instrument for the fine tuning of individual markets. It affects, positively or negatively, demand in the economy in a very broad sense. At present, we are conducting the policy that we believe is necessary to meet the inflation target and support the recovery of the Swedish economy. When it comes to preventing systemic risks such as a prolonged unbalanced development of the housing market, the repo rate is too blunt an instrument to do the job on its own. The repo rate should only be considered if the systemic risk is such that it affects our possibility to meet the inflation target and support the stabilisation of the real economy and the financial markets. There are instead other and probably more important factors than the repo rate when it comes to avoiding an unbalanced development of the housing market. This perhaps relates above all to effective regulation and supervision.
If they occur, it is important that we explain their causes and state how inflation is to be brought back into line with the target. To influence consumer prices, the Riksbank uses its instrumental rate—the repo rate. Simplifying somewhat, one can say that, by altering the marginal interest rate for banks, the Riksbank influences other domestic interest rates and thereby the level of economic activity in Sweden and consequently the development of prices. It should be noted, however, that in the short and medium term, pricing is also affected by other factors, such as the construction of fiscal policy and the development of wages. That is why the Riksbank is concerned that, when making decisions, politicians and labour market organisations should also promote low inflation. It is the reason, moreover, for my returning to these matters at the end of this talk. But in the long run the course of inflation is crucially dependent on monetary policy. Interest rate adjustments have their main effect on prices after an interval of one to two years. Monetary policy decisions therefore have to be based, not on the latest figures for inflation but on the Riksbank’s current assessment of future price movements. Our quarterly inflation reports accordingly present ongoing inflation forecasts based on analyses of a large array of economic indicators, supported by economic models and knowledge of relationships between different parts of the economy. The inflation assessment is used by the Riksbank in drawing conclusions about the direction of monetary policy.

BIS Review 66/1998  -3Notwithstanding the prospect of further good economic growth in the coming years, the Riksbank judged that the rate of inflation would remain low and even be less than we had expected earlier. The strong demand was certainly assumed to give some increase in inflationary pressure in the forecast period but not so much as to be a cause for concern. One reason lay in the good productivity growth that was also foreseen, indicating that full capacity utilisation in the economy would not be reached in the coming twenty-four months. Although capacity utilisation was high in certain sectors, the Riksbank envisaged that in the economy as a whole there would be a capacity surplus. External inflationary pressure was expected to be low in view of subdued international inflation, low raw materials prices and a somewhat stronger exchange rate. Expectations of future inflation among households, financial agents and manufacturing indicated a belief that future inflation would be low. Thus, confidence in economic policy’s focus on price stability seemed to have been firmly established. The Riksbank noted that the uncertainty in the assessment of future inflation was mainly whether it would be even lower than we foresaw in the main scenario. One of the main factors here was the crisis in Asia and its conceivable effects on international economic developments and prices.
Petar Goshev: Opening of the Joint Public Information Center of the National Bank of the Republic of Macedonia and the World Bank Address by Mr Petar Goshev, Governor of the National Bank of the Republic of Macedonia, at the opening of the Joint Public Information Center of the National Bank of the Republic of Macedonia (NBRM) and the World Bank, Skopje, 16 December 2010. *  *  *  Dear Ms. Lilia Burunchuk, Director of the World Bank Office in Skopje, Dear Mr. Alexander Tieman, IMF Resident Representative for the Republic of Macedonia, Your Excellencies, Dear guests, Dear ladies and gentlemen! Please allow me to greet you and express my pleasure that today we have the opportunity to attend two important events. The first, which we will gladly enjoy for a longer period of time – the official opening of the Joint Public Information Center of the NBRM and the World Bank. And the second, the presentation of the Annual Regional Report of the IMF, an event which is always extremely interesting because it is an analysis made by a highcaliber institution, such as the IMF. Dear guests, The partnership of the Republic of Macedonia and the World Bank lasts for nearly two decades. Good results of this partnership are evident. The partnership by definition rests on the benefit for both parties, i.e. for all who gathered together in achieving a goal.

Located within the NBRM Library, the Center provides access to over 400 publications of the World Bank, electronic access to the World Bank databases, as well as a specifically authorized direct access to the electronic World Bank library, with a possibility to browse over 6,000 copies of professional literature. What makes this Center additionally useful for the public is that, within the cooperation with NBRM, it simultaneously provides the external users with an access also to the National Bank publications, in the form of annual reports and working papers, and to the professional literature that the NBRM Library has at its disposal. The access to all publications, as well as to the World Bank statistical database is open for all interested users in the Republic of Macedonia, because of which this Center can bear the epithet of a rich trove of knowledge, which is waiting to be used. Dear Ladies and Gentlemen, We live in an era of extraordinary dynamic changes. An era, where the already learned things outdate in no time, or become insufficient, while the crisis once again showed that the enigmas are far more numerous than the axiomatic truths. That is the reason that the investments in learning should be ongoing. As a Central Bank, we make constant efforts for knowledge improvement and elevation of the scientific and research capacity, not only within the Bank, but wider, as well.
The Committee expects to cease or commence phasing out reinvestments after it begins increasing the target range for the fed funds rate; the timing will depend on how economic and financial conditions and the economic outlook evolve. The Committee currently does not anticipate selling agency mortgage-backed securities as part of the normalization process, although limited sales might be warranted in the longer run to reduce or eliminate residual holdings. In the longer run, the Committee intends to hold no more securities than it will need to implement monetary policy efficiently and effectively, and that the SOMA will consist primarily of Treasury securities. Given the $ trillion in large-scale asset purchases (LSAPs) conducted since September 2012, the level of reserve balances in the system will be significantly higher during normalization than was envisioned when the 2011 principles were adopted. In light of this, as I just outlined, the FOMC has judged it appropriate to operate with a framework for interest rate control that is based primarily on administered rates rather than reserve draining tools. Given the unprecedented nature of this framework, the Committee has made clear that it is prepared to adjust the details of its approach in light of economic and financial developments. The FOMC has consistently adapted its policies as needed in recent years and will no doubt continue to do so as necessary throughout the normalization process in order to foster conditions consistent with its dual mandate.

The new collateral management service, with its cross-border, cross-system, cross-time zone and cross-currency capabilities, will provide an efficient repo infrastructure that will help develop the repo market in Hong Kong. The importance of the repo market as a financing channel has assumed added prominence since the outbreak of the global financial crisis in 2008. Due to a combination of the large inflows of funds into Hong Kong in late 2008 and early 2009 and heightened risk aversion, the interbank money market has been less active in recent years and financial institutions have been more careful in lending funds to each other on an uncollateralized basis. The average daily turnover of the uncollateralized interbank market has dropped significantly, by 71% from $ billion in November 2007 to $ billion in March 2012. The higher frequency of flight to quality, and resultant tightness in the global supply of US dollar, has also affected turnover in the currency swap market. The average daily turnover of the Hong Kong dollar swap market also reduced notably by 32% from $ billion to $ billion in the same period. While the Hong Kong banking sector is now faced with ample liquidity, the situation will not be permanent and we will need to find new ways to facilitate efficient interbank borrowing. Development of the repo market will help to activate the money market by addressing the credit risk through the collateralized arrangement. The cross-border funding issue is particularly important to Hong Kong given its role as an international banking centre.
3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  To date, approaches to measuring and managing the financial implications of climate change for investments have been inadequate. Carbon footprints are not forward-looking, divestments only focus on the most carbon-intensive sectors, green investments are still small scale, and the impact of shareholder engagement is hard to measure. One of the most promising options is to assess the “warming potential” of investment portfolios. For example, GPIF, the world’s largest pension fund, estimates that its assets are currently consistent with a 3.7 degree path. Such a forward looking measure can help asset owners and asset managers understand the transition pathways of their investments and develop strategies to align financial flows with the necessary transition to net zero. Degree warming will reveal who is on the right and wrong side of history. It will provide a signal to governments about where the economy is on the transition path and therefore the effectiveness of their policies. It will empower consumers, giving them more choice in how to invest to support the transition. With our citizens, particularly the young, demanding climate action, it is becoming essential for asset owners to disclose the extent to which their clients’ money is being invested in line with the values of those clients. To this end, for COP26, the TCFD is establishing a subcommittee to consider how to standardise the methodology for measuring the warming potential of assets and expanding its use.

The management on its part is ready to listen to the employee grievances and problems but I would encourage you to also make innovative suggestions to address these grievances and solve problems. At the same time, I wish to emphasize the importance of displaying your loyalty and commitment to this institution at all times. Finally, I wish that all of you would get the strength and determination to overcome all the bottlenecks and hindrances before you in the New Year. BIS Review 1/2005  3