samchain/econo-pairs-v1 huggingface dataset:
With regard to the length of the period of ERM II membership, in view of the varying degrees of convergence of the accession countries, limiting the duration of ERM II membership to the minimum permissible time to qualify for the adoption of the euro – that is, two years – may not be an optimal choice for all accession countries. Longer membership of ERM II may, in some cases, be helpful since it would allow accession countries to retain the exchange rate as an instrumental policy variable during the catching-up process. Indeed, this option has proven useful for most of the current euro area participants. Again, it is worthwhile to recall the examples of Greece, Portugal and Spain. In the case of Greece, the final revaluation of the drachma on 17 January 2000 took place at the request of Greece, with the agreement of the EU authorities, to support the country's efforts to preserve sustainable price stability and progress in real convergence without jeopardising the competitiveness of the economy. Portugal and Spain, which participated in the EMS/ERM for a longer period of time, also used the option of realigning the respective exchange rates of the escudo and the peseta at several points along the road towards entry into the euro area. Participation in ERM II should, therefore, not be seen as a mere “waiting room” prior to the adoption of the euro.

BIS central bankers’ speeches  1  The euro area economic governance framework and the crisis Let me first briefly review the economic governance of the euro area at the outset. The most distinctive feature of EMU is that it combines a single monetary policy with largely decentralised fiscal and economic policies. In such a framework, a key challenge is to ensure a high degree of self-responsibility or, expressed in other words, to ensure that unsound national policies do not even materialise and do not, in any event, undermine the stability of the common currency. These challenges were abundantly clear to the founding fathers of EMU: rules on fiscal spending were laid down in the Maastricht Treaty, and supplemented by systems for the coordination of economic policy. Together, they are now generally referred to as the European economic governance framework. The fiscal constraints in EMU – given the two reference values, namely the ceilings of 3% of GDP on budget deficits and of 60% of GDP on government debt – are probably the best known elements of the fiscal framework. But the framework was, in fact, far more comprehensive, even before the recent reform of economic governance. A set of rules imposed preventive limits on government borrowing, requiring Member States to achieve close-to-balance budgets over the business cycle. These rules were meant to place debt on a sustainable footing and, at the same time, to create fiscal room for manoeuvre for “rainy days”.
It is one thing for the enhanced architecture of the global financial house to be sound. It is equally important for its participants to be able to understand and adapt to the new requirements. To illustrate, one particular rule requires market participants to obtain LEIs, or Legal Entity Identifiers for purposes of trade reporting. This will improve the usability of trade reporting data and facilitate better data harmonisation across multiple reporting regimes. In fact, when MiFID II commences in January next year, LEIs will be needed for trades with European counterparties. REFORMS AND CULTURE 16. Last but not least, no amount of regulatory reforms, rules and regulations can assure a sound and stable financial system if the conduct and behaviours of firms and individuals are flawed. A culture of strong Integrity and high ethics are crucial lynchpins to the safety and soundness of our financial system. The key to achieve this must lie in the various lines of defence in all financial institutions – where business units follow rules and regulations diligently; and Boards and Management place importance as well as give recognition to the roles of Compliance and Audit, supported by appropriate systems of reward and recognition. It must be made clear that doing right and doing good are aligned with doing well. 17. On this note, let me conclude. I am sure that this forum will provide many useful insights and much food for thought. Thank you for your attention. 3/3  BIS central bankers' speeches

This assessment should according to me follow a four-pronged approach, with four key indicators:  First, actual inflation data, focusing on underlying inflation, as this is the part for which monetary policy is relevant. In particular we should look at measures of HICP excluding energy and food, and at negotiated wage growth: by the way, we don’t see so far signs of a generalised wage-price spiral. A turning point – which we don’t see yet – will be when underlying inflation is peaking. 7  Page 8 sur 14  Alternative measures of underlying inflation are less noisy than the standard index excluding food and energy and thus can better signal the medium term inflationary pressures. Indeed, in the aftermath of the pandemic, the three alternative measures shown on this slide (persistent and common component of inflation, trimmediii and finecoreiv) have turned up earlier than the standard core index. And both in 2008 and in 2011-2012, they have also signalled earlier the easing of inflationary pressures.  Second, future inflation. We will obviously use our models and forecasts, but we should also give a strong attention to inflation expectations by financial markets and still more by economic agents: entrepreneurs and households are the real price- and wage-setters. Here so far, 3 to 5 year inflation expectations remain well anchored in markets, but with some mixed signals from businesses and households. Any sign of stronger de-anchoring would call for a stronger monetary reaction.
Will Portugal need more help and will it receive it? The country was set back by the political uncertainty in the summer. This uncertainty has now been overcome and the country can and should take up from where it stood in the spring of this year, when it was able to successfully issue a long-term bond. Market confidence could be won back through a full implementation of the programme. That is why it is essential to keep to the existing programme and all its objectives. The debate on a second package is heard in Cyprus too. Not least because the collapse of the economy was worse than forecast. When can we expect “Cyprus II”? This question never ceases to amaze me. The Cyprus programme has not even been operating for six months and it has a duration of three years. I fail to understand why the question of a supplementary programme is already being raised. Cyprus must now implement the programme. There has been one review so far and that was successfully completed. The issue now is to continue the programme – nothing more. Not much has been heard about Slovenia recently. Will that country seek a rescue package if the ECB’s asset quality review exposes all the trouble in the banking sector? 2  BIS central bankers’ speeches  Slovenia is now conducting a separate stress test for the country’s ten major banks. The results will be available in late November or early December.

To conclude, I would like to reiterate the importance of preventive measures to combat fraud, and I applaud your efforts in holding a conference on this topic as it shows that you place a high degree of importance in this area. While no institution can ever be expected to be completely fraud proof, institutions maintaining key elements I discussed will have taken a big step towards fraud mitigation and avoidance. I wish you great success for this seminar. I hope you accomplish your objectives and I know you will all take a lot of valuable information from this timely and meaningful event. Thank you again for inviting me to join you today and thank you very much for your attention. BIS Review 52/2008  3
As interest rates fall, household and local government consumption and investment tend to pick up. Higher demand leads to higher output and employment. Wage growth may pick up. Higher wage growth combined with higher profit margins will result in higher inflation. Lower interest rates normally also lead to a depreciation of the krone. Imported goods then become more expensive and inflation accelerates. Expectations play a key role in price and wage formation, and they are influenced by the interest rate. Expectations concerning inflation and economic stability have considerable impact, not least in the foreign exchange market. Petroleum activity constitutes an important part of the Norwegian economy. Oil gives us an economic base that is not available to many other countries. At the same time, the extent of, and fluctuations in, petroleum activity pose a challenge to economic policy in Norway. In a long-term perspective, Norway’s petroleum wealth is to be distributed across generations. In the short term, the substantial capital revenues from the petroleum sector must be managed in such a way that they do not amplify cyclical fluctuations. The Government Petroleum Fund was established in 1990 with a view to safeguarding long-term considerations in the use of petroleum revenues. The idea behind the Petroleum Fund is that the cash flow from an increase in oil prices should accrue to the Fund and be invested abroad so that the  BIS Review 67/2004  1  increase in oil prices does not affect the wider budget.

Public authorities may find it virtually impossible to predict or avoid shocks completely; however, both public authorities and the private sector may minimise the effects of these shocks through structural reforms aimed at creating productive and flexible structures, and preserving balance sheet stability. Public authorities and the private sector should be aware of the fact that long-term benefits from reforms exceed their short-term costs. Third, financial integration provides an additional channel of exposures to foreign shocks, whether in the form of global financial crisis or volatility in the regulatory framework. Overall, financial integration has been and remains a positive factor for development. In the case of Albania, it brings in financial capital and managerial know-how, with a series of positive effects on the Albanian economy, spearheading the economic and political integration of the country. Yet, integration requires fostering cooperation and exchanging information with our international partners and counterpart institutions. Lastly, the monetary and financial stability of the country should not be seen as an exclusive responsibility of the central bank, notwithstanding its primary role in it. It requires the contribution and cooperation of all state authorities. Dear ladies and gentlemen, The Albanian economy has solid premises for continuing and even accelerating the pace of growth. Strengthened financial stability, coupled with prudent monetary policies, offers additional guarantees for its sustainability. However, let me point out that many challenges lie ahead of us.
First, how much comfort should we take from the recovery seen so far and what factors are likely to determine its future vigour? And second, to what extent are the Bank’s planned new responsibilities for macroprudential policy likely to address the “missing instrument” problem exposed so painfully by the financial crisis? I will conclude with some reflections on monetary policy. The recovery so far There has been a strong start to this recovery. After four consecutive quarters of growth, the pace of the recovery to date compares favourably with previous episodes: output is  BIS Review 161/2010  1  estimated to have grown by 2.8% over the past year, quicker than at the same stage of either the 1980s or 1990s recoveries. Some encouragement can also be taken from the composition of growth. Spending by households and businesses has begun to pickup; this despite strains on private sector balance sheets, muted disposable income growth and an impaired banking system. Over the past year, this increase in private sector spending has helped offset a weaker net trade performance, which has been particularly disappointing given the early and substantial depreciation of sterling. However, it is too soon to say we are out of the woods. Economic recovery has to be judged in terms of the level of output, not the rate at which it is growing. It is the level of households’ incomes that determines their well-being. And it is the level of economic activity which governs companies’ profitability and their viability.

Against this background, during 1996 it was possible to cut the repo rate to its lowest level since the early 1960s. Low inflation and decreased inflation expectations also contributed to falling bond rates, accompanied by an appreciation of the krona from the earlier lows. Since December 1996 the repo rate has been unchanged at 4.10 per cent. All in all, conditions were gradually created for a broader economic upswing. With the time lag that generally applies in economic policy, during 1997 we have observed a mood swing among households, leading for instance to increased private consumption, while export growth has BIS Review 101/1997  -2-  been maintained. The Swedish economy is entering a phase of high activity with a combination of strong domestic demand and strong export growth. The impact of the Riksbank’s current monetary stance will take about two years to materialise in full. We therefore have to assess the outlook for inflation as far ahead as in 1999. Such an analysis was presented some weeks ago in the inflation report. I shall be returning shortly to that report and subsequent developments but first I want to discuss the approach in principle to the conduct of monetary policy over the complete economic cycle. Monetary policy in a cyclical perspective A matter that savers and investors are currently discussing is not whether but when the Riksbank will raise the instrumental rate. An expected increase in the repo rate is also indicated by the structure of market rates.
For the UK in particular, the move to a going concern regime represents a fundamental departure from the current set-up, in which a firm is required to calculate financial requirements under the assumption that, following a stress, it writes no new business and instead “runs off” its existing business over time. Solvency II looks at the insurance industry through a different lens and views insurers as “going concerns”, such that it is assumed that insurers will continue to operate after a stress. To achieve this, Solvency II introduces the concept of the “risk margin” which is intended to capture the cost of transferring a set of liabilities from one insurer to another. The risk margin is a fundamentally new component of our regulatory framework and we will ensure that firms meet it. 1. This is a source of some tension at the moment, because the construction of the risk margin is such that, in particular for life business, it becomes much larger when risk-free rates fall. So the current environment of low rates means that the risk margin is large – and when and if rates rise, it will become smaller. Reasonable people can debate whether or not it is sensible for this element of provisions to be so sensitive to risk-free rates, and it may be that once we are into a Solvency II world some firms will choose to hedge this exposure.

William Ryback: Launch of two-factor authentication for internet banking in Hong Kong Speech by Mr William Ryback, Deputy Chief Executive of the Hong Kong Monetary Authority, at the launch of two-factor authentication for internet banking, Hong Kong, 30 May 2005. *  *  *  Good afternoon, ladies and gentlemen. A very warm welcome to all of you to today’s press conference, which marks the launch of two-factor authentication by the banking industry in Hong Kong. It is a great pleasure that I am joined this afternoon by Mr He, Chairman of the Hong Kong Association of Banks, and Mr Man, Senior Superintendent, Commercial Crime Bureau, Hong Kong Police Force. They will be sharing with you shortly about the benefits of two-factor authentication to bank customers and its effectiveness in combating Internet banking frauds. We will be happy to answer your questions afterwards. The acceptance of Internet banking services has been growing rapidly in Hong Kong over the past years. At the end of 2004, over 2.7 million personal Internet banking accounts (an increase of 23% from a year ago) and 107,000 business Internet banking accounts (an increase of 60% from a year ago) were established in Hong Kong. To date many of the banking services are available online. In view of the growing acceptance of Internet banking services and sophistication of Internet banking frauds reported locally and overseas, the banking industry in Hong Kong reached a general consensus last year to strengthen the Internet banking security by implementing two-factor authentication.
Investment expenditures contracted both in the public and the private sectors on a quarterly basis. According to the data on exports and imports of goods and services, exports posted an increase, but imports declined on a quarterly basis in the first quarter. Foreign trade data excluding gold indicate that the import quantity index posted a steady rise in line with the uptrend in domestic demand in this period, while exports declined amid the weak course of external demand. Data on the second quarter of 2015 suggest that the economic activity continues to expand at a moderate pace. Industrial production rose by 1.0 percent in the April-May period compared to the previous quarter. Combined with the other indicators for June, we expect the industrial production to record a quarterly increase in the second quarter. Sales, production, and import indicators regarding domestic demand show that the final domestic demand will continue with an uptrend stemming from consumption demand. Investment indicators, on the other hand, signal that the weak outlook will remain in the second quarter. The export quantity index excluding gold increased at a modest rate in the April-May period following the contraction in the first quarter, while imports excluding gold maintained their uptrend suggesting that the contribution of external demand to economic growth may be limited in the second quarter (Chart 18). The recovery in economic activity is projected to continue in the upcoming period, yet risks to growth exist. Downside risks regarding external demand persist due to geopolitical developments and troubles in Europe.

At this point, global perceptions regarding the persistency of the increases in agricultural commodity prices in the medium term have become stronger. In this conjuncture, the analysis of the forecasts for world food prices and their impacts on domestic food prices bears great importance. In this respect, we included the summary of a particular study in the Inflation Report. The said study analyzes in detail the price developments observed in food products, determines their relative impacts by excluding the determinants of domestic food prices and accordingly makes assessments for the future. As stated in the study, the reinforcement of global perceptions regarding the persistency of the increases in agricultural commodity prices in the medium term indicates that upward risks on domestic food prices and especially on processed food prices will continue in the foreseeable future. In this framework, we revised our forecasts for medium term inflation to incorporate more conservative assumptions on food prices and we have raised our assumptions for food inflation to 13 percent for the year 2008 and 8 percent for the year 2009. These changes have led to upward revisions in our inflation forecasts, by about 1.2 points for 2008 and 1.1 points for 2009. The assumption on oil prices in the January Inflation Report stood at USD 85 per barrel. However, oil prices averaged about USD 100 in the first quarter of 2008. Considering the most recent developments, we have revised our assumption for oil prices to USD 105 per barrel.
The models I have described here are key support tools. But a model will never be able to tell us exactly how the interest rate should be set. The ultimate assessment is, as mentioned, a result of Norges Bank’s professional judgement and will also capture considerations that are not sufficiently taken into account by our models. As such, the models are only a tool. But, a model such as NEMO is a useful tool for analysing developments and in interest rate setting. It helps us interpret and understand the dynamics of the Norwegian economy and can help us to achieve consistency in our monetary policy response pattern. The chart shows our forecasts for inflation and the output gap in the June Report (2/11). The output gap was assumed to increase somewhat further ahead, with the downturn in the wake of the financial crisis being followed by a mild upturn. The low level of inflation would then gradually move up to target. The interest rate path presented in June indicated that the interest rate would gradually be raised towards a normal level in the next years. This was conditional on the economic outlook we presented at that time. Our forecasts provide an expression of what we consider to be the baseline path. But the forecasts are uncertain, as illustrated by the fan chart. Our interest rate forecast is not an unconditional promise, but signals how we will set the interest rate if developments in the Norwegian economy are in line with our projections.

In the past 20 years, inflation has been consistently low and stable. Economic growth has been just as high, if not higher, since inflation came down to a low level, compared with the years when inflation was high and at times at double-digit levels. For the model to be relevant it should build on long-term relationships that we believe to be valid and it should be consistent with data. For example, the model’s relationships should describe how the interest rate works, in line with relevant empirical observations of the Norwegian economy. It is also of considerable importance to us that the economic mechanisms in the model should be understandable and easy to communicate. The model apparatus is to function as a useful tool, both in the internal process ahead of the monetary policy meetings and in Norges Bank’s external communication. BIS central bankers’ speeches  5  A model will never be able to provide an exhaustive description of reality. In 1979, the British statistician George Box stated: “Essentially, all models are wrong, but some are useful”. Models can help to identify key driving forces and ensure a valid line of reasoning and consistency over time. This will enable the model to play an important role in the analytical basis for interest rate setting. At the same time, we must use common sense and experience when evaluating the model-based results and supplement these results with our own professional judgement. In this respect, the Bank has a pragmatic attitude regarding the use of models.