samchain/econo-pairs-v1 huggingface dataset:
I believe structural reforms together with macroeconomic stability, fiscal discipline and prudent monetary policies will create the necessary economic environment to achieve and maintain sustainable growth rates and price stability in the future. Thank you. BIS Review 79/2008  3

But before turning to resolvability of firms let me say something first about the FSB Key Attributes (KAs) of Effective Resolution Regimes for Financial Institutions 2 and the process of resolution planning, both of which are driving the building out of the new resolution paradigm. The KAs, which were agreed by the FSB and endorsed by G20 Leaders at their summit in Cannes 2011, are the foundation on which all else has been built: a. The KAs set out our shared objective as authorities – to be able to manage the failure of a G-SIB without adverse impact on system stability, and without recourse to taxpayer funds. b. They list the minimum elements needed for a statutory resolution regime to be effective. As countries have implemented the KAs at national level, this has provided a convergent framework of resolution regimes internationally, smoothing the way for resolution to work consistently cross-border. c.  Finally, the KAs instituted a process of resolution planning for global systemically important banks (G-SIBs) in crisis management groups (CMGs). The power of this should not be underestimated. The status quo pre-crisis was built on the belief moral hazard was better managed through constructive ambiguity. It is fair to say that this did not work out so well. The new paradigm is for authorities to be clear ex ante as to how resolution will work and to ensure it can. Clear with the market, so shareholders and creditors are under no illusion as to the risks they are taking.
In that context, we lowered the growth range forecast for 2012 and pointed out that, given the international threats facing us, the balance of risks for growth was biased downward. We stated our willingness to take action in order to mitigate the impact of the external scenario on the Chilean economy, having the necessary tools to deal with adverse situations. Thus, in late December we took exceptional measures to ease the frictions present in the domestic money market and, in January, we preemptively reduced the monetary policy rate (MPR) by 25 basis points. Facing the uncertain external situation, the expectations of most market analysts and brokers anticipated the need for further reductions of the MPR. With the passing of time, we have seen a somewhat more favorable evolution of the external scenario. In general, confidence has partially returned to global financial markets, expressed in lower risk spreads and higher commodity prices. The outlook for world growth is still weak, even lower than our expectations in December, but the likelihood of a more adverse scenario has decreased. In Chile, domestic demand and output have outperformed December’s projections. Meanwhile, inflation has also exceeded projections and core inflation measures have normalized rapidly. All this has modified the balance of risks for the Chilean economy from December to date. Some months ago, the biggest risk was that a deteriorated external scenario could trigger a sharper deceleration of domestic demand and output and, thus, of inflation too.

Domestic demand has posted high y-o-y growth rates, yet declining. The same has occurred with consumption, supported by a strong labor market. The unemployment rate is near its fifteen-year low, which also reflects on the evolution of wages. Consumers’ expectations have improved in the past few months. On the investment side, the dynamism of engineering works – mainly related to energy and mining projects – and the recent recovery of building are worth signaling out. Other indicators are consistent with a moderation of demand and output, such as the lower y-o-y growth rates of durable consumption and imports. In addition, the slower pace of growth in employment, labor income and consumer loans suggests a deceleration going forward. The Board’s evaluation is that output gaps are closed, which is also based on signs of a tight labor market and a rapid normalization of core inflation. Y-o-y CPI inflation is above the tolerance range, while core measures hover around 3%, growing at a faster pace than in the last quarter of 2011 and forecasts in the December Report. Still, as I just said, the level of core measures is consistent with our assessment of the state of output gaps. The recent inflation trend is also explained by the behavior of transport fares and the prices of fresh fruits & vegetables. The latter, probably affected by climatic conditions, have followed a pattern that contrasts with their usual patterns and have declined in the past few months.
This rapid expansion of the middle class in ASEAN will spur demand for a wide range of goods and services. •  Services such as telecommunications, education, healthcare, and banking and finance, have a high income elasticity of demand. •  This means that as incomes rise and wealth accumulates, the demand for financial services – be it consumer credit, wealth management, or insurance – will rise more than proportionately. This phenomenon is being demonstrated right now, as it has been over the last few years, and will continue to play out in the next few decades as ASEAN continues to grow. Economic and financial integration to sustain growth Besides domestic structural reforms, a key factor to sustain ASEAN’s rate of growth closer to 6% than 4% is economic integration. •  A key vehicle to achieve this is the ASEAN Economic Community (AEC). •  The AEC, as you know, was adopted in 2007 by ASEAN Leaders as a blueprint to achieve a free flow of goods, services, investments, and skilled people within the region by 2015. We have achieved substantial progress in implementing the AEC Blueprint. •  More than 90% of the key deliverables targeted for completion by 2015 have been implemented. •  Virtually all goods traded within ASEAN are at zero tariff. •  There are agreements in place to enhance protection for investors, liberalise sectors for investment, and provide greater transparency on investment rules.

•  We should harness technology to support the pooling of data in regional and global data centres. •  Data aggregation will help enhance consolidated risk management and ensure better protection of customer data. Insurance integration In insurance, ASEAN member states have agreed on an ASEAN Insurance Integration Framework. •  ASEAN members have agreed in-principle to liberalise the cross-border supply of Marine, Aviation and Goods in International Transit (MAT) insurance in the seventh package of financial sector commitments of the AFAS. •  When this agreement is signed and ratified in 2016, insurance companies will be able to offer MAT insurance across ASEAN’s borders. •  This move will help to lower the cost of insuring cross-border business risks and help to spur intra-ASEAN trade. The next key steps will be to liberalise the catastrophe insurance and reinsurance markets. •  ASEAN’s insurance penetration rate is barely half the global average, even as the incidence and severity of natural catastrophes in ASEAN continue to increase. •  This large and widening gap in insurance coverage leaves ASEAN countries vulnerable to economic loss and production disruptions from natural catastrophes. •  As risk exposures grow in scale, size and complexity, they will exceed the capacity of individual states to underwrite the risks confronting their communities and economies. Liberalising ASEAN’s insurance markets will reduce the cost of insurance protection to governments, to businesses as well as to consumers.
Going back to what I said earlier about maintaining high morals, keep away from abusing alcohol, drugs and sex as these are the ingredients that are likely to lead you into high risk behavior  2  BIS central bankers’ speeches  such as unprotected sex and cause you to contract the HIV/AIDS. Abstinence is the only 100% effective way to avoid getting infected. WHAT EMPLOYERS WANT Employers want to see in you potential to be a high flyer and willingness to learn new things. Employers want a demonstration of productivity. Employers want to receive a good reference, a transcript that reflects goods results and a qualification from an institution of repute, a qualification that is relevant to their needs. You therefore need to be forward looking even as you select your subject. PLAN YOUR LIVES. Do not have the attitude of FIKAISOLVA. Have a recipe for a successful life. It is never too early. I had decided when I began to study law that I wanted to specialize in commercial law. That path has brought me to where I am today. I must make mention that you are fortunate in that the environment of the college is ideal for learning. I had the opportunity to be taken around the college and I observed that you have modern facilities and equipment that support your learning. Your classrooms have the necessary furniture, the computer laboratory has access to internet and the physical building conditions are solid.

To say something about my academic qualifications, I graduated with a Bachelor of Laws degree from University of Zambia, thereafter a Master of Laws degree from Harvard where I was a Fulbright Scholar and a PhD from University of London, Centre for Commercial Law Studies, Queen Mary and Westfield College. Allow me to mention that all my studies were done on scholarship. BIS central bankers’ speeches  1  Apart from my work, I am also involved in service to the public and to the Church through sitting on various Bodies. I was not appointed to this position my chance; it took effort and hard work to be noticed. I believed in myself and knew I had to put in the best to achieve anything I wanted to achieve. So what message do I carry for you this afternoon? My Theme is that YOU CAN DO IT! To you the students, I want to encourage you to see yourselves as leaders. You are the future of this nation. You are part of the cream that need to push this country forward. I would like you to realise that academic and professional qualifications are an integral part of settings yourselves up for one’s life. By being here, you are establishing a path for your successful career whether as an employee or an entrepreneur. The knowledge that you are gaining is assisting in developing and enhancing your ability to think and perceive as well as manage the various situations that life offers.
Besides Switzerland, I will also be looking at the Czech Republic, Sweden and – a special case – Denmark (cf. chart 1). These are all small open economies with strong trade links to the euro area. With the exception of Denmark, these countries chose to continue pursuing an independent monetary policy even after the introduction of the euro. Furthermore, the central banks of all these countries have in recent years implemented unconventional monetary policy measures. I will return to this point in more detail later. Two questions stand at the centre of my speech today. First, can countries bordering a major currency area pursue an independent monetary policy – and have events since the onset of the financial crisis in 2008 affected the answer? And second, how have unconventional measures helped these countries in the implementation of an independent monetary policy? I will argue that the first question – whether countries bordering the euro area can pursue an independent monetary policy – can essentially be answered with a yes. However, for these countries, managing monetary conditions arising from interest and exchange rate levels has become significantly more difficult in recent years. Regarding the second question – how have unconventional measures helped these countries in implementing an independent monetary policy – I will argue that negative interest, foreign exchange market interventions and quantitative easing programmes – instruments each tailored to suit a country’s specific needs – have helped these central banks to regain a certain room for manoeuvre.

Finally, on 22 January 2015, the ECB announced a quantitative easing programme going well beyond market expectations in terms of length, target volumes and the wide range of the securities eligible for purchase. The euro lost even more ground against the US dollar and the pound sterling. For its neighbours, the ECB’s monetary policy easing had both positive and negative effects. On the one hand, the measures promised to support economic recovery in the euro area, which, thanks to real economic linkages, would also benefit neighbouring states. On the other hand, as with the US dollar and the pound, it led to increased upward pressure on the euro area’s neighbour currencies. Switzerland’s monetary policy situation saw a fundamental shift. Let me explain this situation by means of interest rate differentials on call money (cf. chart 15).7 The call money rates enable the best comparison of monetary policy restrictiveness. In a positive interest rate environment, they reflect movements in the main refinancing rate, and in a negative interest rate environment, they follow central bank deposit rates. In the phase leading up to the crisis, the interest rate differentials between the euro area and the Czech Republic, Denmark and Sweden were close to 0%. In contrast, Swiss interest rates have historically been below the euro area’s interest rates. This interest rate differential reflects Switzerland’s status as a safe haven. In exchange for the greater security of Swiss investments, investors accept lower interest rates than they would receive abroad.
Should it now be the case that we are entering a longer period of persistently higher inflationary pressures – which we do not know yet, of course – then my assessment is that the framework of wage-formation we have today will act as a built-in and useful brake in the system. Thirdly, a stricter and more robust fiscal policy framework was introduced after the crisis in the early 1990s. This has contributed to public finances now being in a much better shape than they were in the 1980s and 1990s. A large and growing sovereign debt may raise inflation expectations, if agents suspect that the government may eventually try to solve the problem of by inflating the debt away. This means is that the central government reduces the real value of the debt by letting inflation rise. However, unlike in the 1970s and 1980s, we have now a number of control mechanisms in place, which means that this potential source of excessive inflation has in practice been eliminated. My reflections on the current situation So, in conclusion, how do I view the current situation more specifically? And what can we learn from history? During many of the periods of high inflation in connection with war, the effects of monetary policy have been heavily dependent on the expectations of companies and households regarding future economic developments. There is an example of a deflation spiral after the First World War when expectations of lower prices in the future led to falling aggregate demand.

Difficulties in generating sufficient tax revenues are considered to be an important explanation for the high inflation in countries such as Germany, Austria, Hungary, Poland and Russia after the First World War and also for the highest rate of hyperinflation in the modern age, that in Hungary in 19451946.6 According to some estimates, prices at their fastest then doubled in fifteen hours.7  Inflation often also rises in the rest of the world The factors I have mentioned so far are those that can contribute to higher inflation in countries that are, or have recently been, directly involved in a war. But war can also cause higher inflation in the rest of the world. The war itself can generate increased demand on the world market for various products such as oil and certain metals. The warring countries can also be important exporters of some commodity or product which they can no longer produce or export as a result of the war. The latter results in lower supply and higher prices on the world market. Examples include the increases in oil prices that arose in connection with, for example, the Yom Kippur War, when the oil-exporting countries in the Arab world decided to cut their exports, and the war between Iraq and Iran.
The area of IMF financing has also seen great transformation. For example, although IMF lending continues to be targeted at short-term balance of payments needs, our financing instruments have, for nearly two decades, included concessional lending for low-income countries. In response to the rapid development of international capital markets as a major source of financing for countries, special IMF financing policies have also been put in place to assist countries facing capitalaccount driven crises. Related to these capital market developments, the Fund also began to play an unanticipated role in facilitating the resolution of sovereign debt problems. This function became critically important following the emergence of the debt crisis in 1982, and it remains so today. All of these changes – ranging from de-colonization and transition, to the rapid development of private international capital flows and new instruments, to the emergence of capital-account driven crises – posed new challenges for the IMF. In many cases, these developments touched upon issues which lay at the frontiers of economic knowledge and research. Addressing them has led to a significant transformation of the Fund, including a broadening of the skills mix of Fund staff, greater dialogue with  2  BIS Review 43/2005  private financial sectors, and more involvement in institutional development in member countries. In the process, the IMF has also become a more open and transparent institution.

As we ponder how best to meet the challenges of the future, there appears a strong case that the IMF should remain anchored to its core macroeconomic and financial areas of mandate and expertise. The Fund’s governing organs – including our Executive Board and the International Monetary and Financial Committee (IMFC) – are already actively engaged in this review. They have had various occasions to consider this matter, and I would like to use this opportunity to present some of the key ideas that have emerged in discussion, in the following five areas: surveillance, financial sector and capital markets work, Fund financing and lending, our assistance to low-income countries, and internal management and governance. First, on surveillance, both the IMF’s Executive Board and the IMFC share my vision that a central task of the Fund lies in a stronger and better-focused surveillance process. IMF surveillance provides the foundation for cooperation among our members in the promotion of stability and growth in the global economy. With increased trade and financial linkages among nations, and strong connections between economic performance, poverty, and security issues, such cooperation to address shared problems is now more important than ever. For instance, the IMF has repeatedly pointed to the need to address current global imbalances, so as to reinforce the basis for more balanced and sustainable global growth. The existing relatively benign global outlook provides an excellent window of opportunity to do that, and the IMF serves as a ready vehicle through which to cooperate on the necessary actions.
While there is still a high degree of uncertainty, recent economic data confirm the positive underlying momentum of economic activity in the euro area. The sovereign crisis in Europe While economic prospects have improved, we still face challenges. The most important one is certainly “the sovereign crisis” in the euro area. Broadly speaking, opinions and views  BIS central bankers’ speeches  1  expressed on this by people outside the euro area can be divided into three categories: hostility, skepticism and support. First, outright hostility: gloomy predictions about the imminent demise of the euro came predominantly from deeply anti-European commentators. While these views, like all opinions, should be treated with respect, there is no point in trying to refute arguments that are largely irrational and mainly reflect wishful thinking. Second, skepticism: it comes mainly, but not only, from academic circles. Prestigious and well-respected economists have been pointing to the fact that the euro is not an optimum currency area and that some form of fiscal federalism is missing to compensate for insufficient labour mobility. Let me simply recall a few facts. The benefits of the euro cannot be assessed exclusively through the lens of the optimum currency area theory. The euro has brought to more than 300 million European citizens unprecedented stability: price stability, of course, with inflation averaging 1.97% over the past decade, but also financial stability. It is always useful to think of counterfactual (?) when assessing a situation.

Inflation in the past twelve months In the third Inflation Report last year the Riksbank’s growth forecast for Sweden in the coming years was revised upwards. This mainly mirrored a more favourable outlook for international activity; it also seemed likely that domestic demand would be stronger than had been expected earlier. Our overall growth forecast agreed with most other observers. Some predictions, however, did include an even stronger increase in household consumption, the reason being that rising asset prices in general and the stock market boom in particular were judged to lead to a markedly increased consumption propensity. Our higher growth forecast was accompanied by little change in the assessment of inflation we had presented earlier in the year. Thus, we judged that the relationship between growth and inflation would be more favourable than we had previously calculated. In this respect we differed from many other observers and that occasioned a good deal of discussion. The background to our forecast was that inflation’s path had been surprisingly favourable and that, instead of being just a result of occasional factors, this had to do with more fundamental features in the economy that would continue to influence inflation up to our two-year horizon. Here is a picture of our inflation assessment last October and the outcome (Chart 1). I have chosen to present it in terms of UND1X because that is the indicator of inflation on which monetary policy has been focused in the past year.