samchain/econo-pairs-v1 huggingface dataset:
The recovery has been broad-based. The easing of monetary policy contributed to a sharp rise in private consumption and housing investment. Activity has picked up considerably in service industries and the construction sector. High petroleum investment, the global economic recovery, a weaker krone and lower wage growth contributed to boosting activity in manufacturing industry. Profitability has improved for mainland enterprises. Mainland fixed investment has also gradually increased. Thus, it may appear that growth in the Norwegian economy has become more self-driven. Even with a pronounced upswing in output, the increase in the number employed has been limited so far in this cyclical upturn. Measured in terms of the number of person-hours worked, however, employment growth was high last year. Registered unemployment has shown a small decline over the past year. Productivity probably increased more than normally in some industries in the early phase of the recovery. A marked fall in sickness absence may have reduced the need for new employees. Capacity utilisation in the Norwegian economy has increased, notwithstanding the decline in sickness absence and efficiency gains in the business sector. The output gap is a measure of capacity utilisation in the economy. We interpret a positive output gap to mean that output and capacity utilisation are higher than the level consistent with stable inflation over time. High domestic interest rates in 2002 and fiscal policy management contributed to substantially lower cost inflation in the private and public sectors over the past two years.

Svein Gjedrem: The conduct of monetary policy Introductory statement by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 23 May 2005. The  Charts in pdf-format can be found on the Norges Bank’s website. Please note that the text below may differ slightly from the actual presentation. The statement is based, among other things, on Norges Bank’s Annual Report for 2004, Inflation Report 1/2005 and the assessments published after the monetary policy meeting of the Executive Board on 20 April. *  *  *  I would like to take this opportunity to thank the Storting for again inviting me to appear before this Committee on behalf of Norges Bank in order to report and answer questions on monetary policy in connection with the Storting’s deliberations on the Government’s Credit Report. The introductory statement is based on the Bank’s Annual Report, but is also updated based on the Executive Board’s assessments for the period to the preceding monetary policy meeting. Flexible inflation targeting Monetary policy in Norway is oriented towards low and stable inflation. This is the most important contribution monetary policy can make to sound economic developments in the long term. The inflation target provides enterprises and households with an anchor for future inflation expectations. When there is confidence in the inflation target, monetary policy can contribute to stabilising developments in output and employment.
One of the potential costs of additional purchases is that they could disrupt functioning in Treasury and MBS markets – a cost that the Desk carefully assesses when it implements the FOMC’s policy directive. As you know, there is a finite supply of Treasury and agency securities available to purchase, in terms of both total amount and amounts available in the market at any given time. If the Federal Reserve were to become too dominant a buyer or holder, it could reduce the tradable supply of these securities and discourage trading among market participants, leading to diminished liquidity and price discovery. A significant deterioration in liquidity could lead investors to demand a premium for transacting in these markets, ultimately raising borrowing costs and undermining the program’s policy goal.4 However, as discussed later, the purchases have gone smoothly so far, and market liquidity seems to be holding up well. Although the current program is different in some respects from prior balance sheet programs, its intended purpose and the ways the Committee anticipates it will impact the economy are similar. The purchases are conducted to achieve the FOMC’s dual mandate of maximum employment and price stability. Asset purchases help achieve this mandate by putting downward pressure on longer-term interest rates, supporting mortgage markets, and helping to make broader financial conditions more accommodative. The current purchases reduce interest rates and ease financial conditions through the same transmission channels as previous balance sheet programs.

Zeti Akhtar Aziz: Focus on human capital development in Malaysia Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the INCEIF Strategic Partnership 2006, Kuala Lumpur, 14 December 2006. *  *  *  Yang Berhormat, Dato' Mustapa Mohamed, Minister of Higher Education, Distinguished Guests, Ladies and Gentlemen, It is my great pleasure and honour to welcome you to INCEIF Strategic Partnership in conjunction with the signing of Memorandum of Understanding between INCEIF and nine institutions of higher learning in Malaysia. This occasion is of particular significance as, on this day, with the grace of Allah, we are laying the foundation for the promotion of collaborative efforts in human capital development which will benefit the Islamic financial services industry. Against an environment of a rapidly evolving Islamic financial industry and the growing significance of Islamic financial institutions globally, human intellectual capital has become the defining factor in sustaining the performance and competitiveness of the Islamic financial industry. Indeed, the fast pace of innovation in global financial services in general and in the Islamic financial services sector in particular, demands new expertise and skills. In this environment, the creation of a substantial pool of talent is indispensable for the future growth of Islamic finance. In this regard, Malaysia has placed strong focus on human capital development through training and education.
This correction has also affected the establishment of more steady balances of the demand and supply for foreign currency in this period. Notwithstanding these encouraging developments, lending activity at home remains far from its potentiality, responding to the lower demand for banking loans and the tightened lending conditions as applied from banks. Lending to private sector marked an annual growth of 4% in real terms, providing an annual growth of 7.8 percent of monetary supply in January. All denominated credit continues to rule the lending activity, which mainly covers the businesses’ needs for circulating capital. January 2010 embodied a particularity, that is the improved state of the banking system assets denominated in foreign currency, has started to be mirrored on the growth of credit denominated in foreign currency. Notwithstanding, the stable increase of lending should be assisted by the re-activation of the demand for loans and the parallel easing of lending conditions as applied from the banking system. Bank of Albania deems that banking system should reveal more visionary in assessing potential sectors of economic growth and to take a more active role in encouraging the economic activity. Annual inflation in February 2010 pointed to 4.4%, exceeding by 0.4 percentage points the upper limit of the Bank of Albania target’s tolerance. The annual average inflation pointed to 2.6%.

The recent developments of inflation have reflected the statistical impact of the comparison to a relatively low prices base in 2009, the more full transmission of exchange rate depreciation on consumer prices and the administrative increase of energy, since January 2010. The later factor provided an effect of about 0.5 percentage points on inflation level, being the main reason of exceeding the level of 4%. On the other side, the increasing tendency of food goods inflation is owed to the global conjuncture of goods prices, which is revealing a gradual monthly increase since the half of 2009. Our analysis recommends that the increasing trend of inflation owes mainly to supplying factors, which are estimated to manifest an uneven nature and a short-term action in time. The Bank of Albania expected these developments, being factorised on our projections regarding inflation and communicated timely and in terms of transparency to the public. In medium term period, the growth under potential of the Albanian economy owing to the slowdown of the domestic and external demand, shall establish an environment of low inflationary pressures, which are expected to balance the pressures deriving from the supply direction. This assessment is also supported by the sustained developments and at low historic rates of the long-term component of non-tradable goods inflation, as the most directed transmission of inflationary pressures generated from the internal demand in economy. The rates of both key inflation and of the non-tradable goods in February pointed to 1.1 and 2.3%, respectively.
That is why simple measures of bank leverage, untainted by such complexity, were ten times better at predicting banking failure during the crisis than complex regulatory alternatives (Haldane and Madouros (2012)). What is true of financial regulation is true too of tax. For example, studies have analysed the incidence of tax evasion and avoidance across different countries. They have found that the single most important determinant of tax evasion is often the complexity of the tax code (Richardson (2006)). The greater the complexity, the more numerous the loopholes, the greater the incentive and means to exploit them. Third, complex regulatory frameworks tend also to be inequitable. They advantage those best able to exploit the cracks, navigate the uncertainty, squeeze through the loopholes. This tends to be those with the deepest pockets who can afford the most sophisticated riskmodeller, the slickest tax accountant. Complexity, in other words, acts like a regressive tax. That is why big banks (using in-house complex models) typically hold far less capital than smaller banks (using simplified, standardised alternatives) even when their underlying exposures are identical. It is one reason why Warren Buffet claimed to pay a lower tax rate than his secretary. And it is why, over the recent past, regulatory and tax arbitrage have both become high-growth industries. They are toxic exhaust fumes from the Heath-Robinson vehicles history has created. If complex frameworks come with economic and social costs – inefficient, ineffective and inequitable – why has society not done more to tackle them?

Härle et al (2010), “Basel III and European banking: Its impact, how banks might respond, and the challenges of implementation” McKinsey & Company. Richardson, G (2006), “Determinants of tax evasion: A cross-country investigation”, Journal of International Accounting, Auditing and Taxation 15 (2006) 150–169. BIS central bankers’ speeches  3
Caleb M Fundanga: Barclays Bank home loan product Vote of thanks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the Barclays Bank home loan product, Lusaka, 25 January 2006. *  *  *  •  The Minister of Finance and National Planning, Hon. Ng’andu Peter Magande M.P. •  The Board Chairman of Barclays Bank Zambia PLC, Mr Hakainde Hichilema and Board Members present here today  •  The Acting Managing Director Barclays Bank Zambia PLC Mr Daniel Nel,  •  Barclays Bank Zambia PLC staff,  •  Distinguished Invited Guests, Ladies and Gentlemen  I feel greatly honoured to be invited to give a vote of thanks to the Honourable minister’s speech at the launch of the Barclays Bank Home loan product. On behalf of Bank of Zambia and indeed on my own behalf, I would like to congratulate Barclays Bank Plc Zambia for leading the way in establishing long-term finance for the real estate sector. Distinguished invited guests, its just a few months ago that I was invited to talk to an audience on the theme, “Investment opportunities in the Zambia real estate business: The role of Bank of Zambia” at a workshop on Investment Opportunities in Zambia – Integrating African Property Markets. I remember telling the audience then that although the share of the real estate sector in GDP has been increasing over the years, it could perform even better if certain issues were addressed.

I particularly mentioned the following as impediments to real estate sector development: 1. Lack of long term finance  2. High interest rates necessitated by among other things high inflation levels in Zambia  3. Poor credit culture among our people. 4. Lack of a more active secondary financial market  The picture was not promising for the real estate sector and the only positive economic variable I remember mentioning as helping the real estate sector was the exchange rate of the Kwacha that has been stable against major currencies since July 2003 when the Bank of Zambia introduced the broadbased inter-bank foreign exchange system (IFES). Distinguished guests, today I feel honoured to tell you that most of the issues I raised a few months ago as impending real estate sector development are now being addressed. First, the exchange rate of the Kwacha against major international currencies has continued to improve drastically. Second, the issue of lack of long-term finance, an issue a few months ago has been resolved today with the announcement by Barclays Bank to offer home loans. Third, the issue of high interest rates necessitated by among other things high inflation levels in Zambia. As at end December 2005, annual inflation was at 15.9% and is expected to go down further. Fourth, the issue of poor credit culture among our people.
Charting a path for monetary policy in this environment thus requires a nuanced understanding of how globalisation both affects inflation and influences the stance of monetary policy. It is to these I will now turn. Global Influences on Domestic Inflation In a closed economy, inflationary pressures depend on developments in domestic costs, which in turn depend on domestic spare capacity, or the balance of domestic supply and demand. Opening up the economy changes this relationship in three ways. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Most straightforwardly, external demand exerts pressure on domestic resource utilisation and therefore domestic inflation. The importance of this channel has steadily increased for most of the past half century (Chart 4). 7  Chart 4: External demand has steadily increased in importance  Sources: IMF and Bank calculations. Next, in an open economy, prices of imports affect domestic inflation both directly – through the final goods and services bought by households – and indirectly – through the prices of imported intermediates used in the production of final goods and services in the consumption basket. For years the direct effect has imparted a steady disinflationary bias. The integration of lower-cost producers into the global economy acts like an increase in potential supply for advanced economies, raising the level of 8  spending that is consistent with inflation at target.

11 Headline CPI inflation averaged 1.9% over this period. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Chart 5: Sustained, cumulative relative price shock in goods accommodated through higher services price inflation  Notes: Six-month average of the log-difference between core goods prices (excludes food and energy) and services prices (series indexed; 2005 = 100). The US series uses PCE price indices. Sources: Thomson Reuters Datastream, national sources and Bank calculation. Globalisation has also led to a dramatic increase in the use of imported intermediates in domestic production. The ICT revolution has made a great unbundling of production into global value chains possible, and large wage differentials have made doing so profitable. Intermediate goods trade has represented 80% of the increase in total trade over the past two decades (Chart 6), driving up the value added of imports as a share from 10% of exports in 1990 to around 20% in 2015. 12  12  See Auer, R, Borio, C and Filardo, A (2017), ‘The globalisation of inflation: the growing importance of global value chains’, BIS Working Paper No. 602. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Chart 6: The development of global value chains has boosted trade in intermediates  Notes: Imports and GDP are in current US dollars. Sources: Johnson and Noguera (forthcoming), Powell (2016), World Input-Output Database (2016 release) and BIS. This expansion in global value chains has led to greater synchronisation of producer price inflation across countries.
At the moment, a good deal of effort is being focused on the comprehensive exercise to assess the solvency of European banks which, as reflected in the Community Regulation creating the single supervisory mechanism, must be conducted before the mechanism commences operating next November. Allow me now to turn to the design and implications of this analytical exercise. 2. The comprehensive assessment of European banks  The comprehensive assessment being conducted by the ECB chiefly comprises two fundamental elements: the analysis of asset quality and the stress tests. The asset quality analysis involves evaluating, taking balance sheets as at 31 December 2013 as a reference, how rigorously financial statements reflect the value of banks’ different assets. This requires reviewing aspects such as the accounting classification of assets, the principles used to recognise their impairment, the sufficiency of the provisions set aside, how collateral is considered and, in the case of assets recorded at fair value, the suitability of the methodology used to determine their value. Having completed the selection of the asset portfolios for review, actual analysis has now begun in what is called phase 2 of the exercise, whose methodology was made public on 11 March. The process will not only require banks and supervisory authorities to assign sizeable resources; it will also involve the leading European audit and asset valuation firms. The ECB estimates that, not counting supervisory staff and bank employees themselves, more than 1,000 people will work on the exercise.

We can also ask whether investment in Norway could be an alternative to our investments in international financial markets. It is important to emphasise that the oil fund does not stand in the way of corporate investment. The government can choose the composition, required rate of return and risk profile for its investments without considering the funding requirements of Norwegian enterprises. By the same token, Norwegian companies can choose their debt and equity structure independently of the government’s financial investments. There is a capital market between the government as investor and corporate capital needs. The government’s foreign savings plans do not therefore affect Norwegian companies’ access to capital and required rate of return on their investments. There are sound arguments for investing in infrastructure, better schools and state-of-the-art research. But this should be possible anyway given the increase in expenditure that is provided for by the fiscal rule. The profitability of government investments is based on a discount rate of 4 per cent. This secures about the same required rate of return as the government can expect to achieve on its oil fund investments over time. 6 A question that might be raised is whether there is a queue of sound and profitable projects that have to wait because of an excessively tight fiscal policy. It is difficult to find support for this. 7 In the National Transport Plan for 2010–2019, which can perhaps be considered representative of government spending, spending on road investments is set at around NOK 140 billion.
In the case of Asia, the sharp devaluation and swift recovery in exports led the Asian economies to become addicted to large volume of export at low prices. And, in the case of Thailand, with little incentive to invest in research and development to raise the products’ value and enhance human capital, the average growth of labor productivity3 had trended down from the 1990s to 2000s. Ladies and gentlemen, This brings me to my third part on the lessons from the Asian financial crisis. I would like to offer three reflections that may not necessarily pertain to Europe but may provide food for thought for policymakers. First, conventional policy prescriptions may not be appropriate for unusual circumstances and there is no one-size-fits-all solution. Asia was a case in point of ill-timed austerity measures. Public sector debt in Thailand then was less than 15% of GDP; yet the policy prescription for Thailand was to tighten fiscal policy and maintain tight monetary policy, resulting in (interbank) interest rate rising from 10% at the beginning of 1997 to over 20% at the end of 1997. With large private external debt beyond the ability of the country to service, a way out should have been debt restructuring with international creditors to give the country a breathing space and avoid the painful shock from the sharp reversal in capital.

BIS central bankers’ speeches  All of the Desk’s eligible counterparty types participate in the ON RRPs, with money funds accounting for the largest share of take-up (Figure 6). Take-up at the operations generally increases when the spread between market rates and the ON RRP offered rate narrows. Take-up also rises substantially around quarter- and year-end financial reporting dates, when some money market participants’ access to other overnight secured investments is more limited. The increase in take-up on these dates is especially large for prime money market funds (Figure 7). In addition to patterns of usage of the ON RRPs themselves, we also analyze trading patterns and interest rate dynamics in secured and unsecured funding markets. In doing so, we use a wide range of data, including transactions data for unsecured funding markets obtained through a new Federal Reserve collection effort (FR 2420). While ON RRPs are a powerful tool for policy implementation, FOMC and market participants have noted the potential for very large regular usage to alter patterns of financial intermediation or, in a fixed-rate structure with no take-up limits, to exacerbate liquidity pressures during times of stress. To further examine how ON RRPs might best be structured to supplement IOER in the control of the federal funds rate while limiting the potential for unintended effects in financial markets, the FOMC has directed the Desk to test several changes to the design of its ON RRP operations.