samchain/econo-pairs-v1 huggingface dataset:
Christian Noyer: Three questions on inflation and money Speech by Mr Christian Noyer, Governor of the Bank of France, at the European Economics and Financial Centre (EEFC), London, 11 September 2007. *  *  *  Keeping inflation in check is Central Banks' main objective. Understanding the inflation process is Central Banks main concern. In recent years, we can take satisfaction in the fact that price stability has been achieved in most countries. At the same time, inflation dynamics may have become more complex. Our ability to consolidate our past successes in the future may well depend on our capacity to further deepen our knowledge on what, ultimately, determines the inflation rate. Today, I would like to address three specific questions which have been extensively discussed, but not yet fully answered, in the academic and policy-making community: what is the impact of globalisation on inflation? Has the inflation – output trade-off changed as a consequence? And, finally, how can money aggregates help us in our efforts to achieve price stability? Globalisation and inflation In the last twenty years, greater integration in goods, services, labour and capital markets has coincided with stable and low inflation. Is there a link? Globalisation has made a significant contribution to price stability. With new large new players (such as China and India, or Eastern European countries) entering the world economy, cheap imports have become available to developed countries. The fall in import prices in developed economies allowed real consumption wages to grow without impacting real production wages.

The hands on the Great Clock on Big Ben are set to the time on 13 May 1940 when Churchill made his inaugural speech to the House of Commons as Prime Minister. 1  2  Karsh described taking the photograph thus: “I stepped toward him and without premeditation, but ever so respectfully, I said, ‘Forgive me, Sir’ and plucked the cigar out of his mouth. By the time I got back to my camera, he looked so belligerent he could have devoured me. It was at that instant I took the photograph. The silence was deafening. Then Mr Churchill, smiling benignly, said, ‘You may take another one.’ He walked toward me, shook my hand and said, ‘You can even make a roaring lion stand still to be photographed.’”  BIS central bankers’ speeches  His declaration then – “I have nothing to offer but blood, toil, tears and sweat” – is quoted beneath the portrait. Let’s take a look at some of these features with a video. Conclusion “A gigantic historical figure during his own lifetime, superhumanly bold, strong, and imaginative, one of the two greatest men of action his nation has produced, an orator of prodigious powers, the saviour of his country, a legendary hero who belongs to myth as much as to reality, the largest human being of our time.” This was the judgment of his contemporary, the philosopher and historian Isaiah Berlin.
An essential characteristic of the Chilean economy is that it has very few distortions in its price-setting mechanism. This results in increases in international prices of goods being transmitted quickly to local prices, while in many other countries this is avoided by explicit price controls or massive fiscal subsidies5 (Figure 3). The most critical phase in this process began in May 2008. After a period with stable monthly inflation figures in the first quarter of last year, large and unexpected inflation rises began taking place. As we then noted, propagation effects were being generated on a higher scale than expected and they could prevent inflation from reaching its target of 3% within the policy horizon of two years. Inflation expectations also started to rise. Both unwanted second-round effects and increased expectations demanded a fast and determined response by the monetary policy aiming at mainstreaming the inflation path to reach its target. This was essential to prevent inflationary persistence from generating a wage/price spiral which would have been harder to revert, if no early measures were adopted. In fact, output costs would have been even harsher, if inflation had been allowed to persist. But the world has changed, and it has done so in a radical way. What was expected to be a mere global economic slowdown, gradually turned into a severe drop in output. Consequently, commodities’ prices began to plunge with unusual strength. After having reached almost 150 dollars halfway through 2008, the oil barrel tumbled down to 40 dollars in December.

Solvency II will introduce an enhanced system of governance standards – promoting the embedding of a strong risk culture, demonstrable within the day-to-day operations of insurers. The new regulatory regime will not look to fix firms’ business models to be identical, nor to restrict the level of innovation across the market. Rather, Solvency II seeks to promote a better understanding of the risks being taken, allowing insurers to take informed decisions. 2  BIS central bankers’ speeches  It is for firms’ management to decide upon their chosen risk appetite and the precise details of their risk models. What matters to the PRA is that firms hold capital commensurate to such risk exposures, in line with the Directive. The introduction of the Prudent Person Principle is an example of how risk management and strategic decision making will be owned by the insurer and its management. The Prudent Person Principle will require investment decisions to be made as if being decided upon by the objective “prudent man” and represents a shift from quantitative to qualitative rules. Gone are the old investment limits for asset classes. So insurers will have much more freedom in their investment choices. The PRA does not and will not promote one asset class over another.
Ajith Nivard Cabraal: Standards, codes and rules – friend or foe of poor nations? Presentation by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the luncheon of the Commonwealth Finance Ministers’ Meeting, Colombo, 12 September 2006. *  *  *  Your Excellencies, Honourable Ministers, Distinguished Delegates, Ladies and Gentlemen, On behalf of the Central Bank of Sri Lanka, it is my great pleasure to welcome all of you to Sri Lanka and to host this Luncheon today. I hope all of you had a pleasant journey and have been able to settle down well in our city so as to be ready to face the rigours of the tight programme that is ahead of you over the next few days. I am also delighted that I have the opportunity to speak to you this afternoon, knowing that it has provided me the platform to share some thoughts with a very diverse group that constitutes the Commonwealth. As we all know, the family of Commonwealth countries is a truly global, multi-ethnic, multi-religious, multi-cultural, multi-national collection of vastly differing economies, societies and political ideologies. It may also be not inappropriate to state that the Commonwealth is enriched greatly by this diversity.

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 like now to move to the latest performance of the banking system, with both its good sides and the risks associated with them. The Albanian banking system is going through a phase of swift development and promotion of new products. I believe you have noticed that many banks have been engaged in aggressive marketing strategies which promote different types of household loans and terms and attractive interest rates for deposits collection. In addition, banks’ branches and agencies have constantly expanded. Only during the present year, 73 new branches and agencies have been opened and 15 others are in the process of being opened. The same characteristics more or less apply to the District of Kukës as well. Currently, six private banks perform their banking business in Kukës, while two other banks are in the process of commencing to operate. As of end June 2008, the banking system has extended a total of about 1.2 billion leks of new credit (around 15 million USD) of which 66% to households and the rest to the businesses in the area. It is nice to notice that this figure accounts for about 66% of deposits collected in this region, providing evidence for a relatively high financial intermediation level. The rapid development of the banking system, the high competition in the banking market and banks’ eagerness to win their market shares requires greater prudence. The Bank of Albania has taken a number of measures to increase prudence in view of attaining the banking system stability.

Ardian Fullani: The banking system – promoter of economic development Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the regional meeting “The banking system – promoter of economic development”, Kukës, 12 September 2008. *  *  *  Dear Governor, Dear Mayor of Kukës Municipality, Dear Mayor of Prizren Municipality, Dear Mr. Uldedaj, Dear Mr. Basha, Dear participants, I am delighted to be here today and there are many good reasons why I was looking forward to this gathering. For the second time within a relatively short period of time I see this gigantic engineering work growing every day and taking its final shape. Every single person visiting the road segment Rëshen – Kalimash understands that what they have in front of them is an extraordinary engineering, civil, useful, far-sighted and patriotic work. Similarly, my return to Kukës after quite a long time has surprised me. There is now a completed airport, cross-border activity has intensified, the climate is extraordinary and soon this town will turn into a city with modern infrastructure. Numerous opportunities are ahead of you. Your cleverness stands in perceiving them and making use of them cleverly in order to enhance the opportunities of the Kukës community and the North-East region. The other reason for making me feel delighted is the presence of my Kosovar counterpart, Mr. Hashim Rexhepi. This meeting is of special significance.
This would help spread the benefits of growth more widely and evenly while enabling the AEC to take advantage of the potential source of synergies by bringing the capital and know-how of the more mature economies together with the competitive costs and abundant resources of the new frontier member countries. Another key element for sustainability of this ambitious effort towards a pan-Asian economic integration is to bring on board private sector involvement to draw in private expertise as well as private capital in funding and operation of intra-regional investment projects. In this regard, greater efforts should be made to raise awareness of AEC among the business community in sustaining high levels of collaborative economic dynamism within the region. Last but not least, since regional integration relies much on harmonization and coordination of cross-national policies with strong commitment by national leaders in implementing the agreed arrangements, political stability and peaceful relationship among member states will prove imperative to the success. This calls for the promotion of peace and stability within the region with fair mechanism to arbitrate disputes to ensure that progress on economic integration will not be delayed or discontinued due to conflicts among member nations. Concluding remark Ladies and gentlemen, I have spoken at length, from a subject of a volatile world, onto more structural issues facing Asian economies, and the regional cooperative forces that provide promising ways forward for Asia. Let me now wrap up by leaving you with a final remark on these issues.

This brings me to the final topic of my talk, that of regional economic and financial integration in Asia. Under ASEAN economic community (AEC), the region’s prospects will be much enhanced by further integration efforts to foster freer international trade and more mobile movements of factors of production. Four broad facets of regional connectivity are expected to contribute to ASEAN economic growth and stability. First, with barriers to trade in goods and services brought down, there will likely be a substantial expansion in intra-regional demand. This increasing role of intra-regional trade in final consumption goods should provide the region with a potential source of resiliency against global demand shocks. Second, higher mobility of factors of production and crossborder infrastructure development can help unlock the tremendous potential of the region by removing supply-side constraints and bottlenecks to growth faced by individual countries, while also making best use of resources and comparative advantages through regional and global supply-chain networks. Third, through closer ties of financial and capital markets, ASEAN countries stand to benefit from tapping the vast pool of Asian savings, to finance intra-regional investment activities. This will prove particularly valuable given that many ASEAN countries are currently in much need of investment to lift their potential rates of growth after a prolonged period without largescale upgrading.
As I mentioned earlier, we recently issued guidance to the institutions we supervise detailing sound risk management practices for the credit risk management of trading and derivatives activities. This document identifies the areas that our examiners will review during their examination of trading activities. It is important to note that the Federal Reserve’ s guidance to banks and examiners covers not only HLI and hedge fund counterparties, but all other counterparty relationships. We want to ensure that banks carry forward the lessons of the LTCM experience to all potentially high-risk trading activities. In this regard, our examiners will devote particular attention to the risks associated with rapidly growing, highly profitable and potentially high-risk activities and product lines. They will assess the adequacy of banks’ reviews of counterparty creditworthiness, exposure measurement and monitoring techniques, stress testing, limit setting, and the appropriate use of collateral and other credit enhancements. Our examiners will also look at internal policies and the degree to which behavior conforms to stated policies. We have already conducted meetings with the major banks to reinforce these messages and our examiners will conduct follow-up reviews in the course of this year. Other Possible Policy Responses Over the past few months, there has been significant debate about other measures that could be taken to limit the potential risks to the financial system arising from the activities of large, highly leveraged, unregulated financial institutions. The Basle Committee carefully considered all the ideas that have surfaced.

Among the future challenges that are likely to confront Asia is whether our prevailing growth model is sustainable given the consequences from erosion of our demographic advantage, the rising indebtedness, the rising cost of living in an apparent period of low inflation, the need to meet the massive infrastructure requirements and the need to address the rising income disparities and the environmental challenges. What then are the ways economic management can prepare us for the future? This will involve policies and reforms that will reduce leverage that will address the widening income disparities, that will effectively manage infrastructure development and urbanisation, that will accord environmental sustainability and finally that will accord importance to governance, accountability and integrity in the implementation and execution of the many endeavours to achieve a sustainable advancement. For most Central Banks in the emerging world, our mandate is broader. Most certainly we are expected to have a role in contributing to addressing many of these challenges both directly and indirectly. Most of all, not only do we have a voice but we also provide support to addressing many of these issues, whether it is on financial inclusion, financing of infrastructure or putting in place financial and social safety nets or on environmental  2  BIS central bankers’ speeches  sustainability.
We are in the process of encouraging a substantial increase in the resources held against the risk of default by a major market participant across the set of private sector and cooperative arrangements for funding, trading, clearing and settlement of financial transactions that form the "centralized infrastructure" of the financial system. We have begun to review how to reduce the vulnerability of secured lending markets, including triparty repo by reducing, in part, the scale of potentially illiquid assets financed at very short maturities. This afternoon, 17 firms that represent more than 90 percent of credit derivatives trading, meet at the Federal Reserve Bank of New York with their primary U.S. and international supervisors to outline a comprehensive set of changes to the derivatives infrastructure. This agenda includes: •  the establishment of a central clearing house for credit default swaps,  •  a program to reduce the level of outstanding contracts through bilateral and multilateral netting,  •  the incorporation of a protocol for managing defaults into existing and future credit derivatives contracts, and  •  concrete targets for achieving substantially greater automation of trading and settlement. These changes to the infrastructure will help improve the system's ability to manage the consequences of failure by a major institution. Making these changes will take time, but we expect to make meaningful progress over the next six months.

This is a major issue given the trend towards the digitalisation of financial markets and payments, and the emergence of new, non-bank players in financial intermediation. At the Banque de France, we are convinced of the benefits of taking an experimental approach to a CBDC: we are currently in the process of finalising our programme of experiments on an interbank or “wholesale” CBDC, to test whether and how it could improve the performance, speed, transparency and security of transactions between major financial players, especially for cross-border payments. In parallel, the Banque de France is closely involved in the investigation phase for the retail digital euro, for use by the general public in everyday payments, and which the Eurosystem decided to launch in July. To conclude, I would like to share with you this observation: to meet the challenge of transforming the financial sector digitally towards greater efficiency and stability, we feel it is vital to ensure that public and private initiatives complement each other and are properly coordinated, in order to support the innovation ecosystem and safeguard the stability of the financial system. It is in this spirit that we intend to continue developing our own initiatives. Thank you for your attention. 3/4  BIS central bankers' speeches  4/4  BIS central bankers' speeches
According to Friedman, it is therefore best for monetary policy to create the right conditions for a stable price level and to focus on the variables that a central bank can control, such as the money supply. In the 1970s and 1980s a number of countries applied a monetary policy regime that was based on steering the money supply. However, research has shown that there is no stable relationship between the money supply and inflation. The rapid financial developments and the use of new, alternative methods of payment have contributed to the money supply not functioning well as a target variable for monetary policy in our present society. Nor is the rate of circulation of money constant; it can vary substantially. It is therefore more natural to focus on trying to directly steer inflation and allow the money supply to remain one indicator among many. The past few decades’ research has pointed to the importance of inflation expectations. Although there is a relationship in the short run between unemployment and inflation, the central bank cannot make use of this in the long run, as companies and individuals will realise what policy is being conducted and adapt their expectations accordingly. For example, wage-earners may demand higher wages as compensation for coming inflation. This will in turn have a negative effect on employment. Monetary policy thus cannot have a lasting influence on real economic variables.

As I will discuss today, however, the possibility of achieving this type of stabilisation is also dependent on inflation expectations being reasonably stabile. If inflation expectations are stable, a change in the policy rate will have a direct effect on the real interest rate, which corresponds to the nominal interest rate minus expected inflation. As it is the real interest rate that determines aggregate demand, monetary policy may in the short term have an impact on the real economy. Today I shall take up the question of what monetary policy can affect in the short and long run. I shall use some examples to illustrate the balance that must be attained between the inflation target and developments in the real economy. Functioning financial markets are of vital significance for the functioning of the whole economy. The Riksbank’s other main task, beside monetary policy, is to safeguard financial stability. During the current financial crisis the Riksbank has taken a number of measures to safeguard financial stability. This has been parallel to taking monetary policy measures. BIS Review 38/2009  1  Monetary policy and financial stability are closely linked. The possibility to conduct efficient monetary policy depends on the transmission mechanism functioning. I shall return to this question later in my speech. Finally, I shall make some concluding comments.