samchain/econo-pairs-v1 huggingface dataset:
My central view is that the peak impact of the past depreciation on inflation has probably passed – monthly goods price inflation has slowed in recent quarters and the total adjustment in relative prices is similar to previous exchange rate changes. But there is considerable uncertainty surrounding this judgment and it is quite possible that there may be further significant upward pressure on prices to come. The increase in prices associated with the combination of the rise in oil prices, the changes to VAT, and the past depreciation of sterling is more than sufficient to explain the strength of inflation relative to target. Moreover, the fact that some of these factors were not predictable in advance and that their implications for inflation – particularly so in the case of the exchange rate – appear to have been greater than initially anticipated, can also help to account for the upside surprises in inflation. But the exact contribution from these price-level shocks is uncertain and it is possible that the other factors identified by the pricing framework also contributed to the surprising strength of inflation. The impact of spare capacity on costs and prices Consider first the impact of spare capacity on costs and prices. There are good reasons to believe that a substantial margin of spare capacity opened up during the recession and remains today.

Financial services and economic liberalization in Asia, particularly in China, India and South-East Asia have significantly widened the market outreach for life insurance whilst unlocking considerable market potential in new growth areas. Indeed, the transformation of Asian countries into industrial and services powerhouses, with increasing share of world output, will present abundant insurance opportunities within the region as countries make huge investments in upgrading their physical, financial and human capital infrastructure. On the domestic front, the Malaysian economy continued to be on a steady growth path with real GDP expanding by 5.7% in the second quarter of 2007 and an anticipated 6% for the entire year. In tandem with this growth, the insurance industry, including the takaful sector, recorded a combined premium growth of nearly 10% for both the life and general sectors to reach RM13 billion in the first half of 2007. The assets of the life and general insurance funds correspondingly registered a double-digit growth of 14% to RM116 billion as at end June, 2007, from 11% in the corresponding period in 2006. This growth momentum is expected to continue in 2008 in line with the sustained growth of the Malaysian economy. One of the key mandates of Bank Negara Malaysia is to develop the insurance industry into a strong, dynamic and innovative component of the financial system. In this respect, industrialization and real sector growth have to be complemented by a strong and thriving services sector, especially in the area of banking and insurance.
The revisions to the Basel Capital Accord, which aim to align supervisory assessments of capital adequacy more closely with the frontier of risk management techniques, are a good example of these efforts. The changes in the structure of finance and the nature of the financial intermediation process reinforce the importance of cooperation between supervisory authorities. The sources of potential risk to financial stability are not confined to banks. Financial institutions increasingly operate across the legal parameters that define the responsibilities of the individual supervisory authorities. The economic characteristics of many of the financial credit instruments provided by banks and other financial institutions have converged. Our supervisory system is a complex framework in terms of the number of  BIS Review 18/2004  3  responsible supervisory institutions, differences in approaches, overlaps, and gaps. This complexity makes it even more important that we collectively work to ensure a comprehensive look at sources of systemic risk and that we raise the bar on the quality of supervision and market oversight where it is necessary. Bank supervisors have made significant progress in improving how we share and divide responsibilities for supervision of banks and bank holding companies, reduce overlap, and raise the overall contribution of the examination process. With the passage of the Gramm-Leach-Bliley Act in 1999, and the increased scope of activities it has allowed financial institutions to engage in across the financial services industry, we have worked to strengthen cooperation with other regulatory bodies.

BIS central bankers’ speeches  1  •  The non-financial corporate sector remains in generally healthy condition, with high profit margins and a high ratio of liquid assets to current liabilities. Of course, there are important risks to the growth outlook including: whether households behave cautiously relative to fundamentals given the experience of the Great Recession; the extent of the impact to the oil producing sector from lower oil prices, and the direction of the business cycle abroad. The FOMC’s view in its January statement was that the risks to U.S. growth are nearly balanced. There are also risks in both directions to the inflation outlook. Headline inflation has fallen quite low due to the drop in oil prices. These effects are likely to be transitory. Measures of underlying inflation such as the core PCE deflator have been running somewhat short of the FOMC’s 2 percent objective for some time. Moreover, market-based measures of mediumterm inflation compensation have fallen somewhat below the objective in recent months, even if survey measures of expectations have held essentially steady. There are also upside risks to inflation. The unemployment rate has declined and wage growth should firm as remaining slack diminishes. Moreover, the U.S. economy’s productivity performance has been relatively unimpressive in recent quarters. If continued, this could also begin to push inflation higher. It is in this context that the Committee has begun to consider the appropriate timing and pace for removing extraordinary accommodation.
Productivity growth should pick up bringing the higher, sustainable pay rises that British workers deserve. 18 Specifically, the Bank’s latest forecast expects real wage growth to resume around the middle of next year and then to accelerate as the unemployment rate continues to fall to around 5½% over the next three years. By the end of our forecast, we see 4% nominal pay growth on average across the economy. This is consistent with our inflation target and the economy’s potential. I will touch at the end of my remarks on how workers and employers can raise that potential. But first let me turn to the implications of all these labour market developments for monetary policy. 17  Oreopoulos et al (2012) estimate that a rise in unemployment by 5 percentage points implies an average initial loss of earnings for new college graduates of around 9 per cent, an effect which fades only after a decade. The persistent effects from adverse labour market conditions are much larger for individuals in the first year of their careers than for those with a few years of experience. And losses are magnified for those whose earnings are predicted to be lower, based on their college major. See Oreopoulos, P, von Wachter, T and Heisz, A (2012), “The short- and long-term career effects of graduating in a recession”, American Economic Journal: Applied Economics, 4(1), pages 1–29.

In recent months the judgement about precisely when to raise Bank Rate has become more balanced. We have no pre-set course, however; the timing will depend on the data. Moreover, the precise timing of the first rate rise is less important than our expectation that, when rates do begin to rise, those increases are likely to be gradual and limited. Rates will go up only as far and as fast as is consistent with price stability as part of a durable expansion, with the maximum sustainable level of employment. For a variety of reasons ranging from the weakness in the euro area, to ongoing repair of household balance sheets, we are not expecting interest rates to head back to the levels seen before the Great Recession. 19 The actual path of interest rates will be determined by the evolution of the balance of aggregate demand and aggregate supply. 19  See, for example, the Box on page 42 of the August 2014 Inflation Report. BIS central bankers’ speeches  7  Before the crisis, monetary policy largely tracked developments in aggregate demand because the structural dynamics of labour supply and productivity growth were relatively consistent. 20 But in the wake of the crisis, the supply side of the economy has been anything but predictable. Originally, we thought the major uncertainties were centred on productivity growth.
However, I would like to argue that there are at least three important ways how central banks may increase the sustainable rate of growth. The first contribution central banks can make is well-known and is to provide price stability. This helps narrow the range of future paths of the aggregate price level and thereby provides some assurance about the real economic value of nominal contracts. Reducing the inflationary risk premium reduces the uncertainty of longer term contracts which, in turn, facilitates investment in projects with high potential returns but long gestation periods. Price stability also helps consumers and businesses to identify changes in relative prices more easily. In turn, a clearer view about relative prices allows an economy to move its resources more rapidly to more profitable uses, to improve its competitiveness and thereby aggregate productivity. However, I would like to elaborate on two other less well-known ways how central bank can help to increase the potential growth rate of an economy: •  monetary policy can contribute to alleviate the medium term negative effects of a deep recession on potential growth in particular in the aftermath of a financial crisis; and  •  monetary policy can foster long-term growth by supporting structural reforms and in particular the ones favoring a more resilient and efficient financial system. 1. Monetary policy can contribute to alleviate the medium term negative effects of a deep recession on potential growth  1.1. First, “border line” between appropriate counter-cyclical monetary policy and medium-term sustainable growth is an open one.

Mugur Isărescu: Christine Lagarde’s visit to Romania Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, on the occasion of the IMF Managing Director Christine Lagarde’s visit to Romania, Bucharest, 16 July 2013. *  *  *  Madame Christine Lagarde, Distinguished guests, Ladies and gentlemen, Today I have the pleasure to welcome again here, at the National Bank of Romania Madame Christine Lagarde, Managing Director of the International Monetary Fund. It’s good to mention from the beginning that she is the first woman to ever lead the IMF. Timothy Geithner, the U.S. Treasury Secretary at the time, said upon her appointment, on July 5th, 2011: “Lagarde’s exceptional talent and broad experience will provide invaluable leadership for this institution at a critical time for the global economy.” Allow me to briefly introduce Madame Lagarde to you. She was born in Paris. Her father was an English professor. She spent her childhood in Le Havre and after graduating high school she went on a scholarship to Maryland, USA, attending Holton Arms School in Bethesda. Madame Lagarde got her law degree at University Paris X (dix), and holds a Master’s degree from the Political Science Institute in Aix-en-Provence. Already a member of the Paris Bar Association, Christine Lagarde joined the international law firm of Baker & McKenzie, becoming its Chairman of the Global Executive Committee in 1999. Subsequently, she acted as Chairman of the Global Strategic Committee in 2004.
To help profile non-domestic securities and enhance investors’ trading interest in these securities, regional exchanges could explore the possibility of cross-trading or cross-listing of securities, particularly in neighbouring exchanges where information barriers are low. More efforts should be taken to facilitate local and foreign investors’ participation in our markets. However, investors’ interest in cross-border trades is also in part, driven by their level of confidence in how markets are characterised by sensible regulation and high standards of corporate governance. Enhancing corporate governance and regulation There has been much focus on the corporate governance and regulation of exchanges in many jurisdictions. As institutions of system-wide or systemic importance, the issues relating to the corporate governance of exchanges are for the most part similar to the issues for banks and insurance companies. Weak corporate governance of such institutions can undermine public confidence in the financial system. However, unlike other financial institutions, exchanges perform varying degrees of supervisory and regulatory functions over their members and listed companies. Potential conflicts of interests exist between these regulatory functions and the exchanges’ commercial functions. These conflicts may be accentuated for demutualised and listed exchanges. While profits are not irrelevant to other  BIS Review 22/2004  3  exchanges, they are the primary motive for shareholders of listed exchanges. Regulators worldwide have been grappling with these issues as more exchanges demutualise and list. MAS believes that credibility in governance and regulation is a vital commercial asset for exchanges.

Yet there is one key difference between the situation today and that in the Middle Ages. Then, the biggest risk to the banks was from the sovereign. Today, perhaps the biggest risk to the sovereign comes from the banks. Causality has reversed. State support is one side of the “social contract” between banks and the state. 3 State regulation of banks is the other. Table 1 suggests that the terms of this social contract have  1  Reinhart and Rogoff (2009) provide an outstanding history of financial crises over the past 800 years. 2  Homer and Sylla (2005). 3  Tucker (2009). BIS Review 139/2009  1  recently worsened. That should come as no surprise. At least over the past century, there is evidence of a ratchet in the scale and scope of state support of the banking system (Section 2). Whenever banking crises strike, the safety net has bulged. Like over-stretched elastic, it has remained distended. What explains this ratchet? All contracts are incomplete. 4 Contractual relationships, like personal ones, often break down due to commitment problems. Social contracts between the state and the banks are no exception. This generates a time-consistency problem for the authorities when dealing with crisis – a tendency to talk tough but act weak. This explains historical hysteresis in the safety net (Section 3). So what can be done? There are many reform proposals on the table.
Of course, an important factor distinguishing student loans from other forms of household debt is the fact that banks are far less important players and the federal government is instead the dominant lender. But this is just one factor that makes student loans unique, and I will now ask my colleagues to provide some more details on this important and fascinating market. 1  Christina D. Romer and David H. Romer, “New Evidence on the Impact of Financial Crises in Advanced Countries,” NBER Working Paper No. 21021, March 2015; and Carmen M. Reinhart and Kenneth S. Rogoff, This Time Is Different: Eight Centuries of Financial Folly, Princeton, NJ: Princeton University Press, 2009. 2  Atif Mian and Amir Sufi, House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again, University of Chicago Press, 2014; and a number of scholarly articles. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches

Conclusion I spoke at length today about the responsibility that we have to combat crime and the ways to do so. Let me end by saying that eradicating financial crime makes good business sense. Financial crime is a cost and burden to all of society. Robust governance and greater transparency is good for business. It creates an environment of trust and a level-playing field for businesses to flourish. This is important as we seek to ensure longevity and continuity of businesses and the health of the economy as a whole. Therefore, let us be united in working for a better and brighter future for Malaysia. Greater governance and transparency will get us there. Thank you. 5/5  BIS central bankers' speeches
The dimensions of the downturn According to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the U.S. economy has experienced 10 recessions since 1950. The duration of those previous recessions averaged slightly less than a year during which real GDP fell an average of 1.75 percent and the unemployment rate increased an average of 2.3 percentage points. The Great Recession was far worse. From its peak, real GDP declined 3.8 percent – more than double the average decline of prior downturns (Chart 12). The unemployment rate began to increase in the second half of 2007. Over the next two years, it increased 5.5 percentage points. The rise would have been even more pronounced except that the average workweek and the labor force participation rate declined unusually sharply (Charts 13 and 14). Overall, total hours worked in the nonfarm business sector declined a staggering 10.6 percent (Chart 15). In addition to the decline in demand for labor, the manufacturing capacity utilization rate declined to 65.1 in June of 2009, the lowest level of the post-World War II period. The result is that the “output gap” – that is, the difference between actual output and the output achieved at the highest resource utilization rate consistent with price stability – has climbed sharply. This, in turn, has put downward pressure on trend inflation. For example, on a year-over-year basis, the core inflation rate declined to 1.5 percent in January 2010 from nearly 3 percent in the fall of 2006 (Chart 16).

There are clear needs for developing other channels of financial intermediation in the longer term, in order to promote diversification and ensure financial stability and sustainable growth. However while the capital markets on the Mainland are still in their nascent stage and face some difficulties in development, the banking system will remain the most important channel of financial intermediation in the foreseeable future. Thus, those engaged in the banking sector will continue, for a long period of time, to play an important role in ensuring the effective intermediation of funds. Given the rapidly changing macroeconomic environment, the banking sector professionals face a difficult task in achieving this mission. The changes involved in this broad picture include supervisory policies for the banking sector, relationship between the regulatory authority and banks, and governance arrangements of individual banks. In line with the government’s reform and open policies and under the supervision of the China Banking Regulatory Commission, Mainland banks have become increasingly commercialized. Banking professionals have progressed from their former mode of following the authorities’ policy instructions to a more active role in assessment of loan applications before making credit decisions. This is not an easy change. It involves both time and considerable adjustment in the thinking. Besides, good tools are a must for a good job: bank employees have to increase their knowledge of the banking business in a market economy and enhance their professional standards.
World trade had picked up again and this had shown an impact on our exports. Moreover, the strong optimism among both households and companies in Sweden indicated that domestic demand could be maintained over the coming years. Our forecast in September was for GDP growth in Sweden of around 4 per cent this year, to be followed by a slower growth rate. This would put GDP in mid-2011 back at the same level as at the end of 2007, that is, before it began to fall. In September we could once again note that the recovery in the labour market had been surprisingly strong. The new forecast made entailed employment being at the same level as prior to the crisis as early as next year. Our assessment of unemployment was that it would fall relatively quickly over the coming quarters and then decrease at a slower rate. Given this, we adjusted up our assessment of resource utilisation in the economy in relation to that made at the monetary policy meeting in June. We foresaw resource utilisation continuing to rise over the coming years. The overall picture was that resource utilisation was still at a low level, but that it would be at an approximately normal level at the end of the forecast period. We estimated in our forecast in September that underlying inflation measured as the CPIF would continue to fall in 2010, and then increase as rising resource utilisation made an impact on inflation. It would reach 2 per cent at the beginning of 2013.

In other words, a monetary policy committee must not only agree that it can disagree, it must also agree on which way it is okay to disagree. But these differences also contribute to the diversity that leads to better decisions. There is no one who holds the key to the truth with a capital T, and when views and assessments are contrasted with one another there is less risk of bad decisions. There is some support for this in academic research, where one result is that a group of persons who process information and reach their decisions in different ways can outperform even very skilful individuals when it comes to solving complex tasks. 1 One could say that diversification trumps specialisation – it is the differences that create added value. 1  See, for instance, Alan S. Blinder, “Monetary Policy by Committee. Why and How?” European Journal of Political Economy 23 (2007). 6  BIS Review 134/2010