samchain/econo-pairs-v1 huggingface dataset:
While important reforms have been introduced in a number of euro area countries, all in all there is still a long way to go in this respect. This emerges quite clearly from a comparison of the costs and procedures associated with the creation of new businesses, to mention just one example. There is a wide diversity in regulatory arrangements across countries and sectors in the euro area. This diversity emerges quite clearly when looking at product markets. Whereas the integration of goods markets is relatively advanced, major shortcomings exist with regard to the full integration of service industries. Most of the barriers to trade in services appear to be due to national regulations, for example administrative procedures for setting up subsidiaries in other euro area countries. Regulatory barriers along these lines reduce competition in services, thus keeping the respective prices above the level that would be expected in a fully integrated market. Much of the recent discussion on structural reforms in product markets has focused on regulatory reform in network industries, in particular telecommunications, electricity and gas. Following a number of important reforms in the 1990s, market opening in the telecommunications market has made considerable progress, while reforms in other network industries have generally remained more limited. The initiatives in the telecommunications sector show how reforms that succeed in increasing competition in previously sheltered sectors, considerably enhance productivity, lower relative prices and lead to new and better products, thereby increasing consumer welfare and job opportunities.

I would like to describe in more detail our communication strategy for monetary policy. The information provided in our Monetary Policy Report is only part of that communication. The preparation that leads up to its publication is a vital component of our work, demanding great dedication, discussion, interaction and reflection on the current state of the economy and the outlook for inflation. The Board and staff meet at least six times in the course of five weeks and there are presentations of special topics, a great many bilateral meetings and draft reports are revised and discussed at length prior to publication. Therefore in this process the board members form their opinion on the determinants of inflation and how monetary policy should evolve. This kind of reporting was introduced by the Bank of England in 1993 and is a common practice among central banks that have inflation target regimes. Today a great number of banks publish inflation reports and in a survey carried out by Fracasso et al. (2003) our Monetary Policy Report was classified in 5th place out of a sample of twenty such reports, the Bank of England’s being judged the best. To provide a basis for discussions on monetary policy, the Board decides which are the key variables of the most likely economic scenario. The projections for these variables derive from sources considered to be the most realistic and widely accepted.
The second country has less scope to cut its policy rate than the first one. When the policy rate in the second country reaches its lower bound, the first country still has 2 percentage points at its disposal. In other words, it is not possible to make monetary policy as expansionary in the country where inflation is on average zero, and it is therefore more difficult to counteract the recession there (see Figure 5).7 Monetary policy scope to counteract recessions and maintain employment is of course good in itself, but a higher average rate of inflation also reduces the risk of a situation with lasting deflation, that is, a decrease in the general price level of goods and services. Deflation is harmful in many ways. For instance, it increases the real burden of debt, which may make borrowers reduce their consumption. The reason for deflation is often a fall in demand in the economy, and this type of mechanism can then further reinforce the downturn. If deflation becomes entrenched, it also becomes even more difficult to use monetary policy to turn developments around than if inflation was zero.8  Interest rate tool presupposes some inflation So to summarise: I believe that most people would respond to the three questions I raised with a yes, and the conclusion one then reaches is that it is good if central banks can use the policy rate to counteract recessions and that this is easier to do if there is some level of inflation in the economy.

This approach should be a consensual approach of the shareholders, a transparent one, where everybody, sponsors and countries of operations agree on the principles and objectives. Ladies and gentlemen, 1/2  BIS central bankers' speeches  Allow me to conclude by saying that the National Bank of Romania strongly supports the partnership with the European Bank for Reconstruction and Development. We appreciate the assistance provided and its benefits and positive impact. We will remain your reliable partner, as always. I invite Mr. Eugen Teodorovici, Minister of Finance and Governor to the EBRD to give his keynote speech on “Romanian Government Program and Future Presidency of the European Union Council”. I wish you fruitful and successful discussions. Thank you. 2/2  BIS central bankers' speeches
Durmuş Yilmaz: Press conference for the presentation of the Inflation Report Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the press conference presenting the third issue of the Inflation Report, Central Bank of the Republic of Turkey, Ankara, 28 July 2008. *  *  *  Distinguished Guests and Members of the Press, Welcome to the press conference for the presentation of the third issue of the 2008 Inflation Report, one of the most important communication tools of the full-fledged inflation-targeting regime that we have been implementing. In this conference, I would like to give you a short summary of our evaluations and the Central Bank’s inflation forecasts in the Inflation Report which will be posted on our website later today. 1. Inflation developments  Esteemed Members of the Press, I would like to start with a general assessment of inflation developments in the previous period and share with you the factors impeding the disinflation process in the first half of the year. Distinguished Guests, In April, both the Open Letter and the Inflation Report issued by the Central Bank of Turkey presented a detailed explanation for the factors impeding the disinflation process. The source of inflation has not changed in the past quarter. In the second quarter of 2008, prolonged increases in food, energy and other commodity prices continued to exert significant upward pressures on headline inflation.

Figure 2: Processed and Unprocessed Food Prices (Annual Percentage Change) Processed Food  25  Unprocessed Food 20 15 10 5  06.08  05.08  04.08  03.08  02.08  01.08  12.07  11.07  10.07  09.07  08.07  07.07  06.07  0  Source: TURKSTAT, CBT. 2  BIS Review 100/2008  Developments in energy prices have been the other major factor driving inflation in the second quarter (Figure 3). Soaring oil prices continued to lead to significant hikes in the prices of domestic fuel products, also putting pressure on housing utilities such as electricity and natural gas. Figure 3: Energy Prices (Quarterly Percentage Change, Percentage Point Contribution) 10  Fuel (Percentage point contribution)  8  Energy for housing (Percentage point contribution) Energy (3-Month percentage change)  6 4 2 0  08-II  08-I  07-IV  07-III  07-II  07-I  06-IV  06-III  06-II  -2  Source: TURKSTAT, CBT. Services inflation displayed a limited rise in the first half of 2008. Food and energy prices continued to exert upward pressures on the prices of catering and transport services. Rents and other services, on the other hand, continued to decelerate (Figure 4). Figure 4: Subcomponents of Services Index (First Half Cumulative Percentage Change) 12  2006-2007 Average  10  2008  8 6 4 2 0 Services  Rent  Transport Services  Restaurants and Hotels  Other Services  Source: TURKSTAT, CBT.
I am  hopeful that European negotiations will soon come to a conclusion on both these texts, which are crucial for regulating the financial sector. On the regulatory front, I would also like to stress the importance of the pilot regime that is to be introduced to help market infrastructure players experiment with DLT. This regime will allow multilateral trading platforms and securities settlement systems operated by CSDs to request temporary exemptions from existing regulations, in order to test certain DLT uses securely and with supervisory oversight. 2/4  BIS central bankers' speeches  But in order to be efficient, regulations need to be backed up by close international coordination. This is also a priority for us, to limit regulatory arbitrage or indeed avoid it altogether. For this reason, we are closely involved in the work of multilateral fora (G7, G20, FSB, CPMI),especially on crypto-assets and the improvement of cross-border payments. B) However, adapting the regulatory framework does not, on its own, respond to all the challenges posed by financial digitalisation. We firmly believe, at the Banque de France, that to help meet these challenges, we also need to play an active role in innovation. For us, becoming part of the European innovation ecosystem means, first and foremost, committing to helping initiatives that can create a diverse and competitive market for efficient solutions, tailored to user needs.

2/3  BIS central bankers' speeches  I mentioned earlier that we also need to reform incentives in order to encourage people to speak up. This is hard. I’ll share with you some of the change we have made at the New York Fed, recognizing that we do not have a monopoly on good ideas, nor can we claim to have a perfect culture. Skip-level meetings are common, and occur for the purpose of providing forums for sharing ideas. They are also a signal that escalation of problems matters to us. We offer training for new employees that emphasizes the importance of cognitive diversity and speaking up. We evaluate employees on their level of engagement with colleagues and their willingness to share insights. So, part of getting promoted is contributing diverse views and raising your hand. We have created programs to encourage peer recognition of good ideas, including backing for actionable initiatives selected by staff. This resulted, for example, in ideas like a “share your story” series to create institutional memory of past experiences and lessons learned. None of these ideas is a panacea. And, I know that we have not yet achieved our goal: a culture in which employees perceive that, by raising their hands and challenging what may be an orthodoxy or conventional wisdom, they are contributing to the mission of the New York Fed. I hope, however, that with the right incentives and good leadership models, we can move closer to that ideal state: an organization characterized by fresh ideas and open dialogue.
With an average daily turnover exceeding USD22 billion and over 90 participating banks (including 18 that have a significant presence in Thailand), our USD RTGS system in Hong Kong provides ample USD liquidity and easily accessible correspondent banking service to Thai banks for the PvP service. This should help them develop a wider range of banking services and financial products in Thailand. At our end, banks in Hong Kong will find new correspondent banking opportunities through serving Thai banks in settling their USD FX transactions in Hong Kong. I am sure this new relationship will create opportunities for commercial cooperation on other fronts. BIS central bankers’ speeches  1  6. Third, the link will also help banks comply with supervisory requirements relating to the management of FX risk in a cost-effective manner. In February 2013, the Basel Committee on Banking Supervision issued an updated guidance on management of FX risk, which recommends that banks should reduce principal risk as much as practicable by settling FX transactions through the use of financial market infrastructure that provides PvP settlement. This recommended best practice is being implemented by bank supervisors on a global basis. The decision of BOT to implement the PvP link will certainly facilitate banks and the payment and settlement systems in Thailand to meet these recommended standards in good time. 7. While these are all good reasons to introduce the PvP link, its success will depend on the commitment and dedication of all parties concerned.

First and foremost, this PvP link will help eliminate settlement risk in US dollar-Thai Baht foreign exchange (FX) transactions. Prior to this link, the settlement of the two currency legs was done in different time zones and in an uncoordinated manner – Thai Baht (THB) in the Asian time zone, followed by US dollar (USD) during New York hours. With the new PvP link, all payments can be made within the Asian time zone and in a coordinated manner by adopting the PvP mode. Under this arrangement, when a Thai Bank delivers (or receives) THB to (or from) its counterparty in Bangkok, the correspondent bank of the Thai Bank in Hong Kong receives (or delivers) USD at the same time. Hence, the risk due to time lag in settling the two legs of the FX transaction can be removed. 5. Second, the reduction in FX settlement risk will open up new business opportunities for banks in both Thailand and Hong Kong. USD against THB transactions accounted for about 75% of Thailand’s FX transactions in 2013. Through this link, banks in Thailand can benefit from the highly flexible and cost-effective solution offered by the USD RTGS system in Hong Kong for managing the settlement risk of their USD FX transactions. The seven-and-a-half-hour PvP window offers a high degree of convenience to the system users.
It is not for me to comment at this stage on what might be the most appropriate exchange rate strategy for individual candidate countries. This is clearly an issue on our research agenda. However, it is clear that with their entry into the EU and the consequent liberalisation of capital movements, accession countries will become less and less able to target their exchange rate without “importing” their monetary policy from the euro area. One may therefore expect that the monetary strategies of these countries will increasingly be conducted with a view to an orderly entry into ERM II and the adoption of the euro. The Eurosystem also has a vital interest in the proper functioning of financial systems in accession countries. This is not least the case because integration into EU structures will entail increased competition for banks and other financial institutions. Thus, our interest in this area concerns not only the general need for financial sector reform, but also, more specifically, the need to ensure the stability of the financial systems. To this end, we have already begun monitoring developments in the banking and financial sectors of accession countries, as well as their general payment systems. Of course, in the context of compliance with EU legal and institutional requirements, the accession countries will be expected to adopt EU legislation in the area of financial services, including those related to banking, insurance and investment firms.

What we need is to match the huge amounts of regional savings with the much-needed investment in infrastructure, which is as high as 8 trillion dollars over the next decade as estimated by the  3  2  ADB website (2012) (http://www.adb.org/features/fast-facts-asean-prc-and-india-great-transformation)  BIS central bankers’ speeches  ADB.4 To match this huge demand for funds, ASEAN along with China, Japan and Korea have put in place several initiatives: two key projects include the ASEAN Infrastructure Fund, which pools regional saving into funds for investment in infrastructure projects and the Asian Bond Markets Initiative, which develops and deepens regional bond markets so as to tap regional savings. 15. To conclude, there are great opportunities in store ahead. At the end of the day, the benefits of trade liberalization and infrastructure development will extend to all of us if we work collectively to overcome the challenges. The AEC will be a springboard to benefit the whole region, particularly for the GMS. This is because the whole region will be more closely knitted, not only in terms of physical connectivity but also in terms of shared production networks. I believe that this conference today will be an excellent platform for us to come together and share our ideas towards realizing long-lasting prosperity in the GMS region. Thank you. 4  ADB website (2009) (http://www.adbi.org/files/2009.08.31.book.infrastructure.seamless.asia.pdf)  BIS central bankers’ speeches  3
Changes in, for example, property prices are routinely taken into account in such a framework since the trajectory of the policy rate for the forecast horizon is set by the outlook for inflation and output, and these outlooks are affected by changes in property prices among other things. However, it is close to impossible to properly quantify, or capture the risks, of overly sharp corrections of property prices some time in the future. We therefore have to take risks of that kind into account in a different way than in the normal approach, where the forecasts for inflation and the real economy serve as the foundation. This is done by adjusting the timing of the policy rates changes, for example by raising the policy rate somewhat earlier than would be justified by the forecasts for inflation and the real economy. By doing so, we hope to minimize the probability of a hard landing scenario. Concluding remarks If I were to sum up my experiences from the last few years, I think three conclusions can be drawn. First of all, as long as asset price inflation only is deemed to be a macroeconomic risk, it can be addressed within the framework of a flexible inflation target. If it is deemed to be a threat to the stability of the financial system, the brunt of the policy response would not be on monetary policy, but rather on the regulatory side.

While the internationalisation of the banking industry holds the potential for efficiency gains, and increased household welfare, it has also added a score of new challenges. Perhaps the most serious of these challenges is what has been termed the home-host problem. This can, in all its essence, be described as follows: Suppose a bank, which is of marginal importance in its home country, sets up a branch in another country, which turns out to be systemically important for that country. Given that the bank is not important in its home country, the home supervisors, who have responsibility for the supervision, might not think that the bank merits close supervision. However, for the host country, which will foot the bill for the salvage operation in case the bank fails, the incentives to monitor the bank are huge. This dilemma is not new in theory, but has now become of great practical importance as financial globalization progressively is making national borders less relevant. Asset prices, financial stability and monetary policy Are there instances when these goals come into conflict with each other? This question has become particularly relevant in the last few years as asset prices have surged, while, at the same time, consumer price inflation has remained muted. On the whole, I think it is reasonable to assume that price stability in the long run reinforces financial stability. The main reason for this is that low and stable inflation reduces the risk of misallocating investments.
High volumes of deficit and public debt over long periods are usually associated with higher interest rates and, therefore, lower rates of private investment and growth in the medium term. Also, correcting a very high debt-to-GDP ratio normally requires significant primary budget surpluses, which must be achieved through higher taxation or lower spending, other than on interest payments. 7/8  Large deficits and high levels of public debt reduce the scope for fiscal policy to play a countercyclical role in adverse economic situations, a particularly necessary and valuable lever in a monetary union. Also, the need to resort constantly to the financial markets to refinance a substantial level of debt and the current deficit increases the vulnerability of the economy to potentially adverse reactions by investor sentiment, as seen in recent years. Facing up to these challenges and minimising these risks requires completing fiscal consolidation, by gradually correcting the budget deficit and reducing public debt. This must be one of the main priorities of economic policy in the coming years. Thank you very much for your attention. 8/8

To better understand how that happened and what it portends, it is useful to think of inflation in terms of three distinct layers of an onion. In this analogy, the onion's outer layer consists of prices of globally traded commoditiessuch as lumber, steel, grains, and oil. They have experienced a surge in demand as the global economy has rebounded from the pandemic downturn. In addition, Russia's war on Ukraine and the resulting actions have caused energy prices to soar. These higher costs get passed on as higher prices for consumers. I am sure everyone in this room has been forced to manage skyrocketing costs on important supplies over the past two years. The middle layer of the inflation onion is made up of products-especially durable goods like appliances, furniture, and autos-that have been affected by severe supply-chain disruptions. Many of you have also had first-hand experience with the impact of shutdowns and supply-chain bottlenecks. There haven't been enough inputs to produce products, and not enough products to sell-all at a time when demand has been skyhigh. Many of you have also had customers lining up at your doors-but not enough products in stock. This imbalance between supply and demand has contributed to large price increases. To give some examples, prices for furniture rose over 13 percent last year, new cars were up nearly 12 percent, and used vehicles skyrocketed an astounding 50 percent. The innermost layer of the onion consists of underlying inflation, which reflects the overall balance between supply and demand in the economy.