samchain/econo-pairs-v1 huggingface dataset:
We do have estimates of expected inflation from other sources – such as the Survey of Professional Forecasters (SPF) conducted by the Federal Reserve Bank of Philadelphia. If such measures do indeed reflect the inflation expectations of investors, then we can conduct a reasonably accurate ex-ante analysis. TIPS analysts often talk about a concept they call the breakeven inflation rate. Essentially, this is the realized inflation rate that would cause investors to come out the same in terms of total compensation regardless of whether they had bought TIPS or nominal Treasuries. The difference between the auction breakeven inflation rate and the SPF forecast yields a measure of the net savings or loss incurred by the Treasury that is independent of forecast errors. It is also equal to the net value of the illiquidity and inflation risk premiums associated with each TIPS. Our analysis, which covers TIPS auctions through April 2008, found that prior to 2004, the breakeven inflation rate was below the SPF. This indicates that the illiquidity premiums exceeded the inflation risk premium over this period. However, since 2004, we find that breakeven inflation rates were approximately equal to expected inflation, indicating that investors were roughly indifferent between the benefit of being protected against inflation risk versus the cost in terms of the greater illiquidity of TIPS relative to onthe-run nominal Treasuries. Thus, on an ex-ante basis, it appeared that the cost of issuing TIPS was about equal to the cost of issuing nominal Treasuries.

Finally, I also look forward to discussing with you on the governance and other related issues of our Start-up Committee. Without further ado, let us now give our attention to Alfred who will be updating us on AFI’s latest progress and lead us through the rest of today’s agenda. Thank you for your attention. Alfred, the floor is yours. 2  BIS Review 87/2009
Monetary policy has little or no ability to influence most of these separate goals in the long term. It is therefore sensible to specify monetary policy’s long-term goals in terms of factors monetary policy can affect. Introducing money into an economy and establishing a credible monetary policy that ensures low and stable inflation will have a positive effect on the real economy. Similarly, monetary policy that ceases to function could result in a dramatic deterioration in welfare, as we have seen on numerous occasions. However, apart from this, monetary policy will not have lasting effects on the growth potential or the level of welfare in the economy. It is the supply of economic resources - labour and  2  BIS Review 49/2002  capital and our ability to utilize them efficiently in production - that is decisive. We cannot use monetary policy to pull ourselves up by our bootstraps. It also seems intuitively unreasonable that it should be possible to influence output potential or average growth in the economy through monetary policy. I think this is fairly obvious if we imagine the effects of monetary policy in a “Robinson and Friday” economy. i)  The long-term objectives of monetary policy  In the long term, monetary policy determines the average level of inflation. Output is determined by the supply of labour, capital and technology and by productivity changes. It is important to stress the essential difference between the target of a high level of economic growth (output target) and the inflation target.

The international experience has shown that the employment of innovative means in the banking and financial system contribute to reducing social costs in the economy from 1% to 2% of GDP. In the case of Albania, this figure may be higher, as cash use in economy is considered to be high. Allow me to highlight some of the considerable developments of banking system. Nowadays, businesses and individuals are increasingly using banking services, mainly in the payments market, where the adaptation of information technology to the development of banking services and products is more substantial. In recent years, the use of banking cards has been rising, not only for basic services, but also as a means of payment. This is followed by the development of the necessary infrastructure, such as PoS and ATM devices. As reported by banks, the number of PoS and ATM devices currently stands at 6.427 and 811, respectively. The number of physical Points of Sale grew 19% in 2014, compared to 2010. Recently, we have also seen an increase in virtual services through the development of infrastructure for the realisation of e-commerce. The expansion of infrastructure for the use of cards is accompanied by the considerable increase in the number of debit and credit cards in circulation. In 2014, 777.195 debit cards and 84.824 credit cards were issued, or, in relative terms, increasing 103% and 20%, respectively from 2010. Notwithstanding the innovations, cards in the world remain very convenient, preferred and secured instruments.
In relation to banking on the internet, this translates into increased risk of unauthorised access to, and alteration of, information. Accordingly, the fundamental objectives that internet security arrangements should try to achieve are to: •  restrict access to the system to those users who are authorised;  •  authenticate the identity and authority of the parties concerned to ensure the enforceability of transactions conducted through the internet;  •  maintain the secrecy of information while it is in passage over the communications network;  •  ensure that the data has not been modified either accidentally or fraudulently while in passage over the network; and  •  prevent unauthorised access to the bank’s central computer system and database. The security of transactions over the internet was one of the issues that was considered by a Study Group on Electronic Banking formed by the HKMA in July 1997. The results of this exercise were published as an article in our Quarterly Bulletin in November of the same year. Based on the work of the Study Group, the HKMA takes the view that developments in internet security technology have generally reached a point where adequate security for banking transactions is obtainable in a commercially viable manner. The use of sophisticated cryptographic techniques, firewalls and other security tools can provide security that is comparable to that offered in physical transactions.

The International Monetary Fund or the IMF has estimated the amount of money laundered worldwide to be in the region of 2% to 5% of global GDP annually or equivalent to USD800 billion to USD2 trillion a year. Indeed, the financial community now regards financial crime such as fraud, money laundering and terrorist financing, including cyber terrorism and crime, as one of the top operational risks that they face. While the direct cost of financial crimes to individual financial institutions may be substantial, it pales in comparison to the damage to the overall financial system that can arise from the failure to implement adequate measures to effectively combat financial crimes, in particular those relating to money laundering and terrorist financing. Such costs include reputational damage to the institution and country, loss of confidence of key stakeholders such as  BIS central bankers’ speeches  1  depositors, investors and the public at large and perhaps more damaging, the loss of or restricted access to international financial system, including correspondent banking relationships. With the increasing trend by supranational bodies to publicly name jurisdictions that are seen to be uncooperative, and to call on their respective members and the broader international community to implement appropriate countermeasures in dealing with institutions and entities from these jurisdictions, the implications, both financially and socially, can be devastating to the countries concerned.
Figure 12  Real commercial loans and non-mining Imacec (annual change, percent)  20  Commercial loans  15  20 15  10  10  5  5  0  0  -5  -5 Non-mining Imacec  -10  -10  -15  -15  -20  -20  97  01  05  09  Source: Central Bank of Chile. 18  13  17  Figure 13  Commercial loans during recession episodes (1) (2)  (difference with respect to annual change in period 0, percent)  8  8  Covid-19  6  6  4  4  2  2  0  0  -2 -4 -6 -8  -2  Global financial crisis  -4 -6  Asian crisis  0  1  2  3  4  -8  5  (1) Horizontal axis shows months. Period 1 is first month with negative Imacec. (2) Real data based on CPI splicing with 2018 anual base. Source: Central Bank of Chile using data from the Financial Markets Commission and the National Statistics Institute (INE).

On the contrary, forecasts suggest that times will be difficult for the greater part of the  2  Moody’s Investors Service: Special Comment: Iceland’s Aaa Ratings at a Crossroads, January 2008. BIS Review 25/2008  5  year, if not longer. The conditions that reigned in the financial markets for several years, and changed abruptly in mid-2007, were also quite unusual, and it is unlikely that such a period will occur again in the foreseeable future. It can be considered certain that investors will be much more cautious in the future than they were until the middle of last year, and that the banks’ room for manoeuvre will be more limited than it has been for a long time. Icelandic companies, including banks, must therefore adapt to changed circumstances, a tighter credit supply, and less advantageous terms. Under these circumstances, it is even more important to reduce the imbalances in the economy by, among other things, lowering inflation and anchoring inflation expectations. The Central Bank will continue its efforts to that end. 6  BIS Review 25/2008
-  6  this applies to the instruments used to provide liquidity: the MRO and LTRO  BIS Review 120/2007  -  this applies to minimum reserve features  -  this applies to the number of counterparties with direct access to central bank money  -  this applies finally to the range of eligible collateral  Let me say a word about each of these features of the Eurosystem operational framework: 1. At moments of term structure difficulties and shortening of the liquidity constraints, it is of advantage to have both: one-week and three-month liquidity providing tenders conducted weekly and monthly. Fine tuning operations and extraordinary additional tenders, according to standard procedures, allowed a commensurate response within a familiar context, rather than adding to prevailing uncertainty by introducing, in an emergency context, untested new facilities, instruments or procedures. 2. In monetary policy operations, the Eurosystem grants direct access to liquidity to a large number of credit institutions. All euro-area institutions subject to minimum reserve requirements and which fulfil the relevant contractual or regulatory arrangements applied by their respective NCB, may access the standing facilities and/or participate in open market operations based on standard tenders. At the end of August 07, 1 676 counterparties had access to the open market operations, 2 809 to the facility, and 2 141 to the marginal lending facility. 3. The combination of relatively high reserve requirements at 2% and the monthly averaging principle allowed banks to dip into their reserves to meet their liquidity needs.

In contrast, most of the market analysts who participate in the monthly survey of inflation expectations, expect an additional increase of 25 basis points for the whole period from now until the end of 2008. BIS Review 120/2007  3  The recent evolution of the exchange rate deserves to be specially mentioned. The Chilean peso has appreciated against the US dollar in the last few weeks, reflecting, in part, the depreciation of this last currency in international markets. This in turn has been the result of the monetary impulse to compensate for narrowing financial conditions in the developed markets and the necessary adjustment of the current account imbalances among the main economic areas. This phenomenon has stressed international financial markets and is a main concern among the economic authorities in industrial countries, especially in the Euro Zone. In Chile, the appreciation of the Chilean peso reduces profits in those tradable sectors that have not been able to adjust their prices in dollars. However, it is important to mention that, thanks to the combination of a fiscal policy, anchored to a structural fiscal surplus and that saves transitory income, and the inflation-targeting monetary policy framework with floating exchange rate regime, the appreciation of the Chilean peso with respect to the US dollar has been one of the lowest among countries all around the world, since the beginning of the US dollar depreciation in international money markets in February 2002.
One can therefore say that there are considerable welfare losses connected with weak competition. How does competition function in Sweden? Competitive conditions have improved during the 1990s and the relative price level has fallen, as can be seen from diagram 2. The factors behind the improved competition situation are increased internationalisation, deregulation, technological developments, EU membership and the more stringent competition laws introduced in 1993. The fall in relative price levels in 1993 is largely due to a weakening of the exchange rate in connection with the floating of the krona in November 1992, when  4  Preliminary statistics from Eurostat for the year 2000. 5  The Swedish Competition Authority, (2000), “Why are Swedish prices so high?”, The Swedish Competition Authority's report series no. 2. BIS Review 25/2002  3  Sweden became a relatively inexpensive country in terms of euro. Sweden has also had a lower inflation rate than other EU countries, which has contributed to keeping down the relative price level. Diagram 2: The difference between the price level in Sweden and the EU average 1991-2000. Percentage points 60  60  50  50  40  40  30  30  20  20  10  10  0  0 1991  1992  1993  1994  1995  1996  1997  1998  1999  2000  Source: Eurostat.

At the moment, a German low-price retail chain is planning to establish itself on the Swedish market, which could have a dampening effect on prices. A high concentration of companies also increases the risk of forming cartels. Recently, several cartels, or suspected cartels, have been revealed in the building, aviation and petrol trades. According to a recently published SIFO survey, 80 per cent of small companies in Sweden and 50 per cent of large companies state that they believe cartels arise very often or quite often in Swedish trade and industry. In other words, consumers may be losing considerable sums of money. With regard to the "petrol cartel", amounts in the order of half a billion kronor were discussed. By eliminating market mechanisms, companies also avoid the competitive pressure that could otherwise ensure they make their operations more efficient and develop new products. In the long term, it also leads to a loss of competitiveness from an international perspective, lower growth and fewer jobs. The government has proposed measures against unlawful co-operation in the bill on combating cartels 10 that was put forward recently. The bill aims to make the war against cartels more efficient by allowing a company that exposes a cartel in future to avoid paying the fine for damage to competition or to have its fine reduced. The government also proposes a stronger confidentiality protection for those who report or provide information on cartels.
2  Source: “Trade Transformed: The Emerging New Corridors of Trade Power”, Citibank (Oct 2011) & McKinsey. 3  Source: “Under Pressure: Funding in an Uncertain World”, Allen & Overy (Oct 2011). BIS central bankers’ speeches  1  arising from revised Basel capital rules. Nevertheless, we are unlikely to see sudden dislocation in the Asian financing landscape because of the following: 6.1. First, Asian banks remain well-capitalised, and notwithstanding cost/deleveraging pressures, international banks will want to preserve their Asian franchises given Asia’s stronger growth potential relative to other regions. 6.2. Second, bank financing in Asia will adapt. Some banks have already begun to explore certain risk-transfer mechanisms (e.g. credit insurance) to continue extending credit, while complying with stricter capital rules. Other banks have shifted to “originate and distribute” models which allows them to play a role in long-term financing even as they scale back their provision of long-term loans. We expect banks in Asia to continually explore new models to remain relevant and constantly develop its expertise to meet Asia’s financing demands. 6.3. Third, growing role of non-bank capital to complement bank financing: The signs are very promising. From 2007-2011, the proportion of aggregate capital raised by private equity growth funds in Asia Pacific has almost doubled from 32% to 62%. On debt markets, we have seen strong issuance activity in Asia Pacific ex-Japan.

To continue to play this role effectively, our local banks should continue to strengthen their systems of management, risk control, technology, operations and expertise as businesses evolve. 9. Local banks are also well-positioned to serve the local community, and in particular, support the development of small and medium-sized enterprises (SMEs). I was told that DBS launched an enhanced Social Enterprise Banking Package in July that offers social entrepreneurs virtually free banking transaction services and loans on preferential terms, giving them time to focus on building their businesses and pursue social causes. I have met some of these social entrepreneurs who have the opportunity to showcase their products and services in a dedicated DBS ‘Social Enterprise Corner’ here at DBS’ MBFC headquarters. 4  Source: Dealogic. 5  Source: “Super Cycle Report”, Standard Chartered Bank (2010). The numbers are quoted in nominal terms. 2  BIS central bankers’ speeches  10. Singapore will continue to evolve and grow its role as an international financial centre. The development of the Marina Bay Financial Centre (MBFC) is a testament to Singapore’s commitment to support the long-term growth of the financial industry. With today’s opening of DBS Asia Central, DBS is now one of the largest tenants in the MBFC. 11. As one of the largest employers in Singapore’s financial services industry with a headcount of over 8000 staff, DBS also has an important role to play in nurturing and developing talent.
Likewise, we foresee that fiscal policy will contribute to expenditure growth significantly during this year, especially through increased public investment. As usual, our projections rely on a number of assumptions, and an important one is that consumer and business expectations will recover. Recent data show a slight revision upward of these indicators, which are still clearly pessimistic nonetheless. Meanwhile, information gathered in the Business Perceptions Report a quarterly publication by the Bank, points to moderate performance in businesses in 2015, with investment plans primarily focused on capital replenishment. Turning to inflation, in the baseline scenario the CPI will stay above 4 percent annually for some more months, approaching 3 percent over the course of 2016. For the CPIEFE, our preferred measure of core inflation, our forecast for 2015 is revised up and is expected to approach 3 percent in 2016 and stay in the neighborhood until the end of the projection horizon (figure 9). This trajectory assumes that the pass-through from the peso depreciation of recent months to prices will stand in the upper part of historic patterns; that real wages will be adjusted in line with productivity; and that capacity gaps will persist over the projection horizon. For the real exchange rate, the forecast uses as a methodological assumption that it will remain similar to its current value, considering that it is within the range believed to be consistent with the state of the business cycle and its long-term fundamentals.

I and my colleagues on the Executive Board have, for example, discussed what would happen if the market’s policy rate expectations were rapidly brought into line with the Riksbank’s repo-rate path. If we assume an immediate alignment, then the upward effect on long-term rates would depend on what measure one sees as being representative of the monetary policy expectations. In the Prospera surveys in November, expectations were higher than those reflected in the forward rates but lower than the Riksbank’s repo-rate path. If we assume that it is the Prospera surveys that best reflect expectations, rather than the forward rate curve, the upward adjustment will thus be smaller, as will the effect on the long-term rates. Market expectations are thus clearly an item on the list of those factors that are difficult to assess and that monetary policy decision-makers must take a stance on. The assessment of market expectations was especially critical earlier in the autumn when the variation in different measures of market expectations was particularly great, with forward rates at a much lower level than other measures. When various indicators of monetary policy  1  The somewhat simplified term risk premium is used throughout instead of the more correct term maturity premium. 2  The price gain made on a long-term bond if the short-term interest rate is lower than expected is, on the other hand, somewhat higher than the price loss that will be made if the short-term interest rate is to a corresponding extent higher than expected.