samchain/econo-pairs-v1 huggingface dataset:
Commodity prices continued along a rising trend during the last quarter of 2009, with the improving perception regarding the global economic recovery (Figure 32). Accordingly, oil prices hovered above our assumption of 70 USD per barrel for the fourth quarter (Figure 33). Therefore, oil price assumptions stated in the previous Report have been revised in line with futures prices registered during the first half of January. In this context, the previous assumption of oil prices have been revised up from 75 USD per barrel to 80 USD for 2010, and from 80 USD to 85 USD for 2011 and thereafter (Table 1). This revision has added around 0.2 percentage points to the 2010 inflation forecasts. Moreover, in line with oil prices, imported input prices are also assumed to increase gradually throughout the forecast horizon in response to the gradual recovery in the world economy. BIS Review 31/2010  13  The October Inflation Report envisaged annual food inflation to be 5.8 percent for 2009 and 6 percent for the years to follow. However, as I have mentioned earlier in my speech, unprocessed food prices exceeded our forecasts. Therefore, we revised our assumptions for food inflation up from 6 percent to 7 percent for end-2010 (Table 1) and this added around 0.3 percentage points to the 2010 inflation forecast. Similarly, assumptions for 2011 food inflation have been raised to 6.5 percent from 6 percent. We maintain our 6 percent annual food inflation forecast for subsequent years.

Moreover, ongoing uncertainties regarding the exit strategies from unconventional fiscal and monetary stimulus continue to pose risks on the durability of the recovery process. BIS Review 31/2010  1  1. Inflation developments  Distinguished Members of the Press, During the final quarter of 2009, factors affecting inflation evolved in line with the outlook presented in the October Inflation Report. Both domestic and external demand displayed a gradual recovery, yet resource utilization remained at low levels. However, an unexpected surge in unprocessed food prices caused the inflation rate to realize one-percentage point higher than forecasted in the October Inflation Report. In other words, the deviation from the end-2009 inflation forecast presented in the October Inflation Report could be explained almost entirely by the increase in unprocessed food prices. Consequently, in the last quarter of 2009, annual inflation climbed to 6.53 percent, remaining within the uncertainty band, albeit slightly below the target set (Figure 3). While the contribution of food and energy items to annual inflation increased in the last quarter of 2009, no significant change was observed in the contribution of the categories excluding food and energy (Figure 4). Meanwhile, rising oil and other commodity prices as well as the withdrawal of tax cuts within the fiscal stimulus package were other factors leading to an increase in annual headline inflation in this period.
This process of monetary normalization is favored by medium- and long-term inflation expectations well anchored around the target, where agents preview that the Central Bank will do whatever it takes to prevent inflation from deviating away from the target in the policy horizon. If inflation stays too high for too long, there is the risk of it affecting medium- and long-term inflation expectations more permanently, thus making convergence with the target more difficult and costlier. As usual, future changes to the monetary policy rate will depend on incoming information and its implications on projected inflation. 4  BIS Review 87/2007  Consistently, the higher inflation rates of the past several months has prompted a revision to market expectations with respect to the future course of monetary policy, switching from a prolonged maintenance of the rate to two to three rises of 25 basis points each before year’s end. Price stability is one factor behind long-term economic growth. In order to ensure that GDP will grow for a long time more than 5% – the estimated rate of trend GDP growth – while keeping inflation under control, it is necessary to increase the rate of trend GDP growth and this does not depend on demand elements but rather on factors determining the growth in supply, such as policies and institutions that affect the increase in the amount and quality of the labor force, the amount and quality of capital stock and the productivity with which both factors are used in production.

One of the consequences of this prolonged cycle of high world growth is global utilization of resources (i.e., productive capacity and labor) being at its highest level in 25 years. The combination of high rates of resource utilization, large recent rises in prices of foods and fuels, and great international liquidity increases the risk of inflation acceleration, with a repercussion on the market’s expectations on the future course of policy rates. In the U.S., the evidence of a moderate deceleration of growth and of a decline in inflation has driven financial markets to project, on average, that the policy rate will remain unchanged, approaching the baseline scenario that the Fed has been communicating for some time already. Financial market expectations, however, are split between one group foreseeing cuts in the policy rate and another that now foresees rises. The main source of uncertainty originates in the future course of growth and inflation. The second quarter should feature a strong increase in measured growth, but future growth is still a question mark. About the euro zone, the market anticipates that, in order to hold inflation around the target – annual inflation below but close to 2% – the ECB will need to raise the policy rate a couple of times during the next 12 months by 25 basis points each. In the case of Japan, markets also project two rises in the policy rate over the next 12 months.
The mobile app serves as a powerful tool to further promote transparency and competition in the money services business industry, by providing consumers with the information and facilities that will help them make smarter remittance choices. Kota Kinabalu will be an important testbed for these initiatives, serving as a model for envisioning an end-to-end digital remittance landscape in Malaysia. Given Sabah’s aspirations to develop a digital ecosystem, we could not have picked a better city or time to launch our next Greenback journey. As we look forward to the journey ahead, I cannot help but recall how far the MSB industry has come. In 2017, the MSB industry facilitated RM20 billion in worker remittances and a further RM400 million in business remittances. This represents a 43% and 300% increase respectively over values transacted in 2013 when significant reforms were introduced to strengthen standards and shore up trust and confidence in the industry. Today, an industry represented by progressive and credible principal MSB companies and a wide network of agents has not only improved access to services, but also raised the quality of service. With better knowledge, tools and resources, the industry has also worked hard to strengthen safeguards against its use for criminal and other illicit activities. The industry is already leading the way in the financial sector by certifying all compliance officers to equip them to be more effective in implementing AML/CFT measures.

Such investments can be found in the emerging markets of Asia, especially in China. Although the dynamics are somewhat different in China, its tale of economic growth is as legendary as that of the Middle East. China has experienced a huge inflow of funds in search of growth opportunities and at the same time the Mainland authorities have been gradually opening up the country’s outward investment. As a Special Administrative Region of China, Hong Kong plays a pivotal role as the IFC of China in the course of financial liberalisation. Not only has it acted as a conduit for Mainland companies accessing international markets through IPOs, but also one of the largest sources of foreign direct investments for Mainland China. With the continuing financial liberalisation on the Mainland, Hong Kong is positioned as the most attractive destination both for investing into China and tapping China's funds. What are the challenges for us? Opportunities aside, we are of course aware that Hong Kong also faces challenges in developing Islamic finance. It is a fact that Hong Kong’s Islamic community is not big, but we are confident that the development of Shariah-compliant financial markets can take off even in environments in which the domestic Islamic community is relatively small, simply for the fact that investors nowadays are looking beyond domestic boundaries and traditional finances as financial activities gravitate towards the Middle East and China. Indeed Hong Kong’s relatively small population does not seem to undermine in any way our performance in the conventional financial and capital markets.
OMTs are intended to provide the ECB with a tool to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro. Effectively, OMTs represent a means to rule out destructive self-fulfilling prophecies that would force the economy into a sub-optimal equilibrium (with elevated interest rates, adjustments made impossible, ultimately leading to default and currency redenomination). 10 Meanwhile, OMTs preserve the incentives for governments to enforce the economic and fiscal adjustments which will prove  6  On the importance of central bank independence and credibility as a means to address possible inconsistencies between monetary and fiscal policy, see, T. Sargent and N. Wallace (1981), “Some Unpleasant Monetarist Arithmetic”, Quarterly Review, Federal Reserve Bank of Minneapolis, Fall. 7  See, E. Leeper (1991), “Equilibria under ‘active’ and ‘passive’ monetary and fiscal policies”, Journal of Monetary Economics 27, 129–147. 8  See, M. Woodford (2001), “Fiscal requirements for price stability”, NBER Working Paper No. 8072. 9  “Ricardian equivalence” implies that forward-looking agents internalise the fact that the government budget will always be adjusted to neutralise fiscal disturbances. However, only a “Ricardian” fiscal policy has this property. 10  O. Jeanne has shown that elevated yields could make inflation more, rather than less likely, due to lack of fiscal adjustment. See O. Jeanne, (2012), “Fiscal challenges to monetary dominance in the euro area: A theoretical perspective”, Banque de France Financial Stability Review, No. 16, pp. 143–150.

Thank you. 6  BIS Review 130/2007
That’s why we’re fully behind the call of the Financial Stability Board of the G20 for consistent measures of leverage in funds to be developed in this area to help enable direct comparisons across funds and at a global level.14 The International Organisation of Securities Commissions (IOSCO) has consulted on how to do this and will finalise its work on leverage measures this year. 15  We believe that a core set of measures will need to be consistent across jurisdictions. A consistent set of measures must allow the demands on liquidity that funds of all sorts could face, and the liquid assets they have available to meet those demands, to be monitored. Only then can we assess properly how their resilience is evolving. Redemption pressures on open-ended funds  The role of investors in open-ended funds is the second feature of the non-bank system that could shape the resilience of credit supply. More than $ trillion of global assets are now held in investment funds that offer frequent, often daily, liquidity to investors despite investing in potentially illiquid underlying assets. 16 These funds hold 13% of outstanding corporate bonds in the UK and 25% in the euro area. Ten years ago they held less than half those shares. And they now hold around 10% of the global leveraged loan market. When investors in these funds redeem their investment, the fund must sell a slice of its assets to meet the cash need. As redemptions accelerate, a fund can become a forced seller.

Key rates have been raised in a number of countries, and market participants expect further interest rate increases. Key rates remain low among many of our trading partners. Market participants expect a gradual increase in key rates in the period ahead, both in Sweden and the euro area. In the US, the key rate is expected to increase by a further 50 basis points before peaking. In the UK, the key rate is expected to remain virtually unchanged in the period ahead. Long-term interest rates are also low in most other countries. Oil prices have risen markedly over the last couple of years. Growth in global oil demand is expected to approach 2 per cent in 2006. This is in line with expected growth in supply from non-OPEC countries. On the whole, this supports the view that the price of oil will remain high. Futures prices indicate that the price of oil may remain above USD 60 per barrel for the next few years. High growth in the global economy also contributed to a further rise in prices for other commodities. This increase has continued in 2006. In spite of a slight decline recently, metal prices have increased substantially in recent months. There has also been a pronounced increase in futures prices, indicating expectations of a sustained upward movement in metal prices similar to that of oil prices. High commodity prices have contributed to somewhat higher head-line inflation, but so far underlying inflation has not risen.
Chart: Key policy rate in the baseline scenario The degree of transparency regarding Norges Bank’s interest rate decisions has increased gradually since inflation targeting was introduced. We provide clear guidance about the future path of the key policy rate. Explicit interest rate forecasts were introduced in 2005. A key objective is to convey the contingency and the uncertainty in the forecast. To that end, we seek to be transparent about the considerations underlying each interest rate forecast and what the objectives and trade-offs are. We consider it important to explain why our forecast has changed. In our Monetary Policy Report, the interest rate forecast is accompanied by a separate chart showing the revision since the previous report due to changes in news and new assessments. Monetary policy also seeks to mitigate the risk of a build-up of financial imbalances. Operationally, and as a support to monetary policy decisions, our objectives and trade-offs are described by a monetary policy loss function7 The loss function is minimised subject to our model of the Norwegian economy, and the implied interest rate path is an important aid to the policy decision process8 Since models are simplifications, our projections are based on a combination of model analyses and professional judgement. Transparency allows financial market participants and other interested parties to make their own judgments on the revisions to our interest rate forecast – and the revisions will often be anticipated.

Emerging versus developed economies”, Norges Bank Working Paper 2012/11 http://www.norges-bank.no/no/om/publisert/publikasjoner/working-papers/2012/11/. 4  Frankel, Jeffrey A. (2011), “How Can Commodity Producers Make Fiscal and Monetary Policy Less Procyclical?” in Beyond the Curse: Policies to Harness the Power of Natural Resources, ed. by Rabah Arezki, Thorvaldur Gylfason and Amadou Sy, International Monetary Fund. 2  BIS central bankers’ speeches  •  All government revenues from the oil sector must be transferred to the fund. •  Government spending, on average over the cycle, must be limited to the expected real return on the fund – estimated at 4 percent. This is known as the fiscal rule. The aim is to spend only the return generated by the fund’s investments, not the capital itself. •  All of the fund’s capital is invested abroad. Chart: Projected size of the oil fund At the time the fund was established, Norway was in the midst of a deep recession, and many doubted that any petroleum revenues would ever be saved. However, after a few years, the government’s cash flow from the petroleum sector started to increase sharply. The savings plan has since remained intact and the fund has now reached a size of more than USD 700 billion, or 140 percent of GDP. Chart: Structural non-oil budget surplus As a result of the fiscal rule, economic policy is more robust: First, by decoupling spending from current petroleum revenues, the fiscal rule provides for a gradual and sustainable phasing-in of petroleum revenue spending.
The lessons we derived from this experience will lead global decision makers to reconsider their policies. We have already started to observe critical and permanent changes in global financial order. The future of the financial system will be in a much better shape with a pre-emptive approach. The coordination is especially needed in terms of better regulation and supervision of financial market instruments. In order for the mission of the COMCEC and thus of the Organization of the Islamic Conference to be successful, it is necessary for the decision making mechanisms to acquire a more active and global dimension. The success of the economy policies of the Islamic counties under the roof of the COMCEC depends on the formation of measures to increase trust and establishment of a close cooperation in economic and commercial areas. Annual meetings of the Governors of the Central Banks of the COMCEC countries will be very important in terms of catching up with the world’s agenda and following the recent developments. Economic activities of the related countries will be supported the most by increasing the cooperation between the central banks of the COMCEC countries, enhancing the functioning of the active mechanisms of communication in international platforms and sharing the experiences. The recovery of the economies of the Islamic countries will be fastened by increasing the exchange of information in the fields of economy, finance and banking among the member and observer countries’ central banks and financial authorities.

This means that abrupt changes in prices or risk have a very low probability. The fallacy of this assumption has been clearly shown by Mandelbrot for stock prices, and it has been further demonstrated in many recent (and non recent) episodes for other asset prices and risk premia. Examples of the use of normal distribution in financial modelling would include the following: •  The most frequently used tool for risk measurement (VaR) frequently ignores "fat tail" risks. Many VaR measures are calibrated according to the expected loss of a portfolio under normal circumstances. Models with "fat tail" distributions are available, but seldom used, due to lack of reliable data over a sufficient period of time. •  Implied volatilities are usually extracted from option pricing, based on normal distribution. They are then used as inputs into trading strategies and models. As a result, the assumption of normal distribution widely "contaminates" the pricing, risk assessment and investment strategies across a whole range of markets and instruments. •  Finally, the pricing of many structured products is based on historical correlations among asset prices, with the assumption that those correlations are stable and do represent the ordinary state of nature. On the contrary, experience has shown that those correlations can change radically during a crisis, frequently collapsing to one, and take price movements to the extreme ends of the probability distribution. Procyclicality Many changes have been introduced in recent years to accounting and capital regimes in order to make them more risk sensitive.
European Commission (2002), Report by the Economic and Financial Committee (EFC) on EU financial integration, European Economy, Economic Papers No 171, May 2002, European Commission, Directorate-General for Economic and Financial Affairs 12. Fidrmuc J., Korhonen I. 2001 “Similarity of Supply and Demand Shocks between the Euro Area and the CEECs”, BOFIT Discussion Paper No. 14. 13. Financial Times “EU’s grim climate change”, 6 January 2007. 14. Fratzscher, M. (2001), “Financial market integration in Europe: on the effects of EMU on stock markets”, ECB Working Paper No. 48 15. Galati, G., Tsatsaronis, K. (2001), “The impact of the euro on Europe’s financial markets”, BIS Working Papers No 100, July 16. Giannetti, M., Guiso, L., Iappelli, T., Pagano, M. (2002), “Financial market integration, corporate financing and economic growth”, European Economy, Economic Papers no 179. 17. Gourinchas, P.O., Valdes, R., Landerretche, O. 2001. “Lending Booms: Latin America and the World”, NBER Working Paper 8249. 18. Kenen, Peter B. (2002) “Currency Unions and Trade: Variations on Themes by Rose and Persson” Reserve Bank of New Zealand Discussion Paper 2002/08. 19. Kiss, G., Nagy, M., Vonnák, B. 2006. “Credit Growth in Central and Eastern Europe: Convergence or Boom?”, WP 2006/10, Magyar Nemzeti Bank. 20. Micco, A., Stein, E., Ordonez, O. 2003. “The Currency Union Effect on Trade: Early Evidence From EMU”, Economic Policy, 316-356. 21. NBP 2004. “A Report on the Costs and Benefits of Poland’s Adoption of the Euro”, ed. J.Borowski, National Bank of Poland 22.

Unless we are convinced, as I say, in general or in any particular case, that Beauty will in fact end up with Prince Charming, and not be condemned to long-term cohabitation with the Beast, then it would be better for Europe as a whole to delay until we were more confident of a happy ending. Investment will continue to flow to this country so long as we succeed in maintaining an environment offering attractive returns, and our macro-economic and supply-side policies are a much bigger factor in that than the exchange rate. Similarly the City will continue to flourish as Europe’s international financial capital so long as the strongest financial firms from all around the world continue to find it attractive to conduct their business here. I see no signs of that changing: indeed the international business of the City continues to increase; and that has very little to do with our national currency, or with an expectation that we will be among the first to merge it into the Euro. So long as we are properly prepared, as we will be, and so long as we have in place efficient infra-structure, including for payments and settlements, as I assure you we will have - in or out, then the Euro, if it comes, will be more of an opportunity than a threat to the City.