samchain/econo-pairs-v1 huggingface dataset:
For example, given economies of scale, it is much cheaper for foreign banks to cover their China operations through their Hong Kong offices, rather than incurring the additional costs of setting up a new office in, say, Shanghai. Also, contrary to the established wisdom, the cost advantages are not always on Shanghai’s side: corporate tax, for example, is twice what it is in Hong Kong. Other positive inducements include the efficiency and sophistication of Hong Kong’s financial markets, and the critical mass that goes with being the world’s fourth largest banking centre and seventh largest foreign exchange centre. We have in Hong Kong a pool of professional expertise trained in all facets of international business: a skilled local workforce, which is well educated, computer-literate, productive, disciplined and highly trainable; in addition to a foreign expertise attracted by rich business opportunities and an international, cosmopolitan orientation, with English as the business language. Without wishing to labour the elements that make up a free economy - which the Cato Institute has set out so well - I think it is worth highlighting the point that Hong Kong scores extremely high on all of them. It enjoys the rule of law and the free movement of information, capital and human resources. It has efficient and clean government, a market-oriented economic policy, a non-intrusive but effective regulatory system, and a low and simple tax regime. It treats domestic and overseas companies on equal terms and has a liberal policy on employing foreigners with expertise.

Consequently, the current overall situation of the Swiss economy remains difficult despite the many rays of hope with regard to the economic cycle. Also, the danger of deflation does not yet seem to have been entirely averted. We have not yet reached the moment for a change of direction in monetary policy in Switzerland. After analysing the available economic data and forecasts and taking various risk considerations into account, there is no need for the SNB to take monetary policy action at present. The SNB can afford to adopt a holding stance. However, this holding stance should not be mistaken for inactivity. The SNB continues its firm implementation of an extremely expansionary monetary policy and the unconventional measures launched on 12 March 2009. The Swiss franc money market is still being provided with a generous and flexible supply of liquidity, interest rates remain low, Swiss franc bonds are still being purchased to dampen the level of risk premiums on the Swiss franc bond market as and when needed and the appreciation of the Swiss franc will continue to be prevented. BIS Review 27/2009  1
Sirisena, and Honourable Prime Minister  Last but not least, let me commend and  Ranil Wickremesinghe for their  congratulate the Assistant Governors,  leadership and guidance, and  Heads of Departments, particularly the  Honourable Finance Minister Ravi  Director of Economic Research and the  Karunanayake for his support, as close  Staff of the Economic Research  coordination between the Ministry of  Department for today’s effort in  Finance and the Central Bank is essential  formulating the policy document, as well  for sound economic management. as all Staff of the Central Bank who are  I am privileged to have unstinted support and prudent inputs from the Members of the Monetary Board. Therefore, my deep gratitude is due to Secretary to the Treasury, Dr. R H S Samaratunga, Mrs. Manohari Ramanathan, Mr. Chrisantha Perera and Mr. Nihal Fonseka. They have been giving up an enormous amount of their time to address the challenging issues of the day. I am also thankful to Deputy  committed to fulfilling the key objectives of the Central Bank with utmost diligence, proficiency and professionalism. On my first day in office, I said that professionalism, technical excellence and integrity are crucial guiding principles for any institution and its staff. I am very pleased to say I have seen plenty of these characteristics among the staff of the Central Bank of Sri Lanka.

It has to be a national effort. The potential for accelerated development is clearly evident. The government’s plans, programmes and projects, as set out in the Honourable Prime Minister’s Statement and the Budget Speech have sign-posted the way ahead. However, the task now is to continue to turn the good intentions into reality. This journey ahead also  We need to ask why this is. In what is  requires a rebalancing of economics and  often termed the Asian century, Sri  politics in economic decision-making, if  Lanka is the only country, other than  we are to stay on course. Afghanistan, in the Asia/Pacific region with an IMF programme – having an IMF programme is the economic equivalent to being in hospital. We are not in the  The government has commenced a strong revenue-based fiscal consolidation programme. ICU but clearly in hospital. The remedial treatment is known and it is  Central Bank of Sri Lanka – ROAD MAP 2017  6  Trade and investment policies are also   Section 2: Review of the  being changed to harness our untapped  developments in the economy along  potential. with the progress in the real, fiscal,  We at the Central Bank, are changing and upgrading many of our processes and policies. Frameworks are being developed for proactive monetary and exchange rate policymaking on a data driven basis.
Figure 3: Actual MPR versus Taylor rule (†)  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0  0.0  -0.5  -0.5  -1.0  -1.0  -1.5  -1.5 2010  2011 Lag  2012 Inflation  2013 GDP  2014 2015 Shock  2016 D(MPR)  2017 2018 Taylor rule  (†) Source: Central Bank of Chile. Figure 4: MPR Chile vs US (†)  9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0 2000  2002  2004  2006  2010  2008  2012  2014  2016  0 2018  CHL: Monetary Policy Rate US: Fed Fund Rate (†) Sources: FRED and Central Bank of Chile. Some key factors supporting the roles of ER as a shock absorber of financial and commodity price shocks A flexible ER regime is not a form of snake oil to alleviate any sort of global ailment. ER volatility can, of course, generate major wealth shifts, and even solvency problems to agents with large balance sheet mismatches—including government. They can induce major losses in competitiveness, which may harm overall activity if winners fail to capture benefits as fast as 6  losers realize costs. Constituencies around fixed prices—including the ER—are very concentrated and powerful.

I’ll conclude by emphasizing two of the next steps that I think are most essential for the successful reform of LIBOR. First, the definition of LIBOR should be broadened so that it more accurately reflects the observed funding patterns of large banks and puts the rate on a broader, more stable base of observable transactions. The LIBOR administrator is actively considering ways to do this while remaining true to the spirit of LIBOR and how it is used in financial contracts. Accomplishing this will make markets that need a reference rate that embodies bank credit risk more robust and resilient and will strengthen the financial system. Second, we still face the problem that the reference rate for a large stock of derivatives contracts is based on a relatively small, underlying cash market. This means there still is a powerful incentive for individuals to attempt to manipulate the rate for their own gains. One promising solution, outlined in Governor Powell’s recent speech on reference rates, is to work with market participants to find an alternative reference rate that is based on a deeper underlying cash market and that meets the needs of all market participants. Of course, any rate that serves as a critical financial benchmark must meet the principles for good governance and production outlined by IOSCO.
At 5.0 percent, the national unemployment rate now stands near conventional estimates of the natural rate consistent with “full employment.” When it comes to inflation, I focus on core measures, which exclude the volatile food and energy components, to assess underlying trends. Two different measures of core inflation have given slightly different signals in recent months: one—the core CPI—is well within my comfort zone; the other—the core PCE—is at the upper end. However, I expect to see some moderation in inflation going forward. Similarly, most forecasters expect the pace of economic activity also to moderate toward trend-like growth. Given all this, it seems to me that the economy is on track to achieve price stability and “maximum employment”—the dual goals assigned to monetary policy by the Federal Reserve Act—and that we’ll likely continue to move in a positive direction over the next couple of years. This sounds like a rosy scenario and I realize that it ignores all of the things that could go wrong. You might well ask, “What about oil prices?” “What about the record trade deficit?” “What about the possibility of a housing bubble?” “What about the ‘conundrum’ of surprisingly low long-term interest rates?” Well, indeed—what about them? You would be right to ask. These questions touch on important economic developments that create risks for the positive scenario I just described. They therefore receive serious attention at the policy table. From my perspective, trying to assess such risks is what makes the conduct of monetary policy both interesting and challenging.

The Governing Council has made explicit in its communication that we expect the key ECB interest rates to remain at current or lower levels for an extended period of time. We have chosen not to be specific either about the date or the conditions. The euro area is composed of diverse and somewhat heterogeneous economies, as shown by the very different unemployment rates. And as I said, it is undergoing a phase of rapid structural change. The relationships between major economic variables are therefore very complex and uncertain and it may have been very confusing to tie monetary policy moves to any set of pre-specified dates or parameters. As it stands, forward guidance has been quite successful in stabilising the short-term part of the yield curve, thus bringing significant monetary accommodation. Some concluding remarks Let me end with two general remarks on the future and limitations of monetary policy. In the future, after many years of implementing non-conventional policies, one may wonder whether central banks will ever return to their pre-crisis framework. Is inflation targeting dead and non-conventional the “new normal”? I can only offer some conjectures. While the pre-crisis framework has been transformed, maybe irreversibly it has, in some aspects, also been strengthened: all central banks have now adopted a quantification of their price stability objective; everyone is aware that symmetry in implementing their mandate is crucial; everyone is putting increased emphasis on communication to impact monetary and financial conditions.
Yet on the other hand, adopting technological innovation may also mean efficiency improvements for banks, although it is true that in the short term adapting to the new way of providing financial services and managing their assets will entail hefty costs for established banks. For society as a whole, the use of new technologies in finance may mean significant advantages in terms of cost savings and financial inclusion. As regulators, we have to promote the adoption of innovation while continuing to treat all participants symmetrically so that regulations governing the same activities are comparable, irrespective of the type of company providing the services. As I mentioned earlier, the decrease in non-productive assets has been one of the main factors which has contributed to the return to profitability of the Spanish banking system in recent years. Nevertheless, although it has decreased significantly, the share of these assets in banks’ balance sheets continues to be historically high and, consequently, banks should take advantage of this point in the cycle to make further progress in this area. Another important challenge for Spanish banks relates to the need for them to achieve reputational improvements. After the economic crisis, litigation increased notably, resulting in sizeable costs for banks which have a negative effect on their profitability. This increase in legal costs is not confined to the Spanish banking system but has also been observed in other jurisdictions.

The Bank can set only one interest rate – the interest rate on Bank of England money. This interest rate affects every region, every sector, every company and every individual that uses Bank money. In practice, this means pretty much everyone in the UK. In other words, monetary policy affects the fortunes of the whole of the UK economy and it does so equally. The Bank cannot set a different interest rate for the steel and the shipping industries, for Port Talbot and Portstewart, for Wales and West Lothian. If monetary policy is singular, does that imply it should be set in a way which is single-minded? In other words, should monetary policy focus only on the economy-wide picture, taking no account of developments across different sectors or regions, income and age ranges, savers and borrowers? My answer to that, quite different, question is a resounding no. That is for four distinct reasons. First, we know that official data on the economy are noisy and mis-measured. They also often fail to capture fully some areas of economic activity – for example, sectors of the economy that are either rising rapidly (such as the digital economy) or contributions that fall outside of the National Accounts framework (such as volunteering). Forming a picture of the whole economy from official statistics is rather like doing a jigsaw puzzle with half of the pieces missing and the other half slightly water-damaged.
On the other hand, the contagious nature of financial turmoil with globalized financial markets is such that the possibility of further attacks on our currency, unsuccessful as they inevitably would turn out to be, could not be dismissed. The banks have therefore been somewhat reluctant to lend longer term money in the interbank market since the October shock, even though they are flushed with liquidity, as reflected by the clearing balance of the banking system being at a high level. This perhaps reflects a lack of depth in the debt market which we have been separately trying to address. As a result, while the short term interest rates of the Hong Kong dollar, for example for overnight money, have fallen to quite low levels, significantly below corresponding US dollar interest rates, the yield curve has become sharply upward sloping, with one-month and longer term money commanding a significant premium over corresponding US dollar interest rates. 25. But I believe the Hong Kong dollar yield curve will in time flatten further, as it has done so after the sharp hike on 23 October 1997. There will, nevertheless, be occasional jumps, as sentiment continued to be affected by events in other economies in the region and possibly beyond.

This situation was rectified in 1988 through the so-called Accounting Arrangements which required the Hongkong and Shanghai Banking Corporation Limited, as the Management Bank of the Clearing House of Hong Kong Association of Banks, to maintain a clearing account with the then Monetary Affairs Branch of Government for the account of the Exchange Fund. Thus the monetary base was only clearly defined then. The Accounting Arrangements were subsequently replaced by another arrangement, on the occasion of the introduction of Real Time Gross Settlement for interbank transactions in Hong Kong BIS Review 19/1998  -6any change in the monetary base has to be matched by a corresponding change in the amount of US dollar reserves held by the HKMA, and the change brought about by the HKMA rather passively converting Hong Kong dollars in the monetary base into US dollar reserves and vice versa at much the initiative of the banks. 19. The advantage of such a requirement is that whenever there is capital outflow, which would take the form of the sale by the banks of Hong Kong dollars to the HKMA for US dollars at the fixed exchange rate, there will, on settlement of the deals, be a shrinkage of the clearing balance of the banking system. This will lead to Hong Kong dollar interest rates in the interbank market increasing. The greater the outflow, the larger will be the fall in the clearing balance of the banking system and the higher will be the interest rates in the interbank market.
We do not have the instruments for fine-tuning the exchange rate. In Norges Bank’s submission of 27 March 2001 to the Ministry of Finance on the new guidelines for economic policy, we indicated that when monetary policy is aimed at low and stable inflation, this is the best contribution monetary policy can make to stability in the krone exchange rate over time. The interest rate affects price inflation through a number of channels, including the krone exchange rate. A stronger krone curbs inflation. If we take steps to counteract an appreciation of the krone when there are pressures in the economy, we reduce the possibility of keeping inflation at bay and there is a greater risk of pronounced fluctuations in the economy. Maintaining stability in the internal value of the krone must thus take precedence. As long as other countries pursue a policy of low and stable  BIS Review 49/2002  7  inflation, stability in the international value of the krone is dependent on low and stable inflation in Norway The implementation of monetary policy is delegated to Norges Bank. This implies that Norges Bank sets the interest rate on the basis of our understanding of the regulation, as indicated in the Bank’s submission to the Ministry of Finance in March last year. Our interpretation places emphasis on the Government’s rationale behind the regulation, on the objective as formulated in the first paragraph and on our knowledge about the relationships between the interest rate, the krone exchange rate, output, employment and inflation.

With the relatively long time horizon that has been chosen, monetary policy can contribute to stable developments in output and employment. However, situations may arise where more than two years or less than two years is required to attain the inflation target. This will depend on what disturbances the economy is exposed to. Norges Bank will communicate such a change in the time horizon. 4. Monetary policy and competitiveness  Monetary policy cannot be used to influence the size of the internationally exposed sector over time. This is primarily determined by wage and income formation, fiscal policy, including the use of petroleum revenues over the government budget and the adaptability and efficiency of the economy. 8  BIS Review 49/2002  The new monetary policy mandate is linked to the new fiscal policy guideline. When the new guidelines were adopted in March 2001, Norges Bank pointed out that, in isolation, a gradual phasing in of petroleum revenues could contribute to deteriorating conditions for the internationally exposed sector. Norway’s fiscal policy will stimulate demand in the public and sheltered sectors. Consequently, internationally exposed industries may have difficulties recruiting labour and may face higher labour costs. The contest for labour may result in a deterioration in competitiveness internationally.
As we look back over the past 18 months or so, the pandemic has posed unprecedented challenges to the global economy. At the height of the pandemic, many economies implemented varying degrees of lockdown and social distancing to mitigate cross-infection risks. 6. The impact of such measures, however, has been uneven across different sectors. Since many face-to-face activities stuttered to a halt, the service sector – particularly retail, restaurants, and hospitality – was among the hardest hit. Many people in the service sector have lost their jobs and family income. 7. Likewise, SMEs were hit especially hard by the pandemic. As compared with big businesses with large financial war chests, SMEs generally are more vulnerable to cash flow crunches and shrinking business flows. In the face of frozen economic activity, many SME businesses have struggled to survive through the pandemic. If the situation was not handled promptly, one could easily find that the less defensive customer segments would be locked out of their access to financial services such as loans. 8. That is exactly why governments around the world have launched extraordinary fiscal measures to support those having a tough time. Hong Kong is no exception. The Government has launched the Special 100% SME Financing Guarantee Scheme and 100% Personal Loan Guarantee Scheme to alleviate the cash flow pressures of distressed SMEs and unemployed individuals. 9. But, apart from fiscal policy, is there any role that the financial system can play? In my view, the financial system can play three key roles. 10.

When we report on the implementation of monetary policy, as in our Annual Report sent to the Ministry of Finance for submission to the King and communication to the Storting, we will place particular emphasis on analysing the reasons for deviations from the target that exceed +/- 1 percentage point. Consumer price inflation. 12-month rise. Per cent 4  4  CPI CPI-ATE1)  3  2  2  1  1  0 1995 1)  3  1996  1997  1998  1999  2000  2001  0 2003  2002  Norges Bank’s estimates up to July 2000. Thereafter figures published by Statistics Norway  Sources: Statistics Norway and Norges Bank SG Gausdal 31.01.03  When the inflation target was introduced, the economy was marked by pressures in the labour market, high cost inflation, considerable optimism among households and enterprises and high expectations of increased use of petroleum revenues in the public sector. Norway introduced an inflation target almost two years ago. Today’s inflation is therefore to a considerable extent influenced by the policy we pursued following the revision of economic policy on 29 March 2001. Developments have provided further evidence that monetary policy is an effective instrument against inflation. Inflation is low even though wage growth is unusually high. Monetary policy is working.