samchain/econo-pairs-v1 huggingface dataset:
The associated effects, for example on the exchange rate, will inevitably change if the interest rate is changed for a shorter or longer period than in our analysis. Experience shows that the time it takes for  2  BIS Review 66/2002  a change in interest rates to have an impact will also vary. For example, the interest rate increases in 1998 had an impact on wage growth as early as the following spring. In other situations, it may take longer. The impact on consumer price inflation is also uncertain. The inflation rate is reduced by an estimated 0.20-0.35 percentage point after two years and 0.30- 0.40 percentage point after three years. The result will depend partly on how the exchange rate reacts to the increase in interest rates. All the above estimates are based on the assumption that monetary policy credibility remains firm. For example, if an interest rate decrease reduces credibility, the impact on the exchange rate and inflation may be substantially stronger than indicated here. However, it is impossible to quantify these effects. Sizeable interest rate changes could theoretically influence monetary policy credibility. The above estimates are therefore based on small interest rate changes. Pronounced interest rate changes could have a different impact from that described here. Forward rates reflect the market expectation of future levels of short-term interest rates. The difference between German and Norwegian forward rates reflects different inflation expectations and a risk premium.

Apart from the internal push, ASEAN exchange linkage under the vision of AEC is taking place this year to allow global investors to trade ASEAN blue chip stocks at lower costs through a single platform. This initiative will ultimately raise the visibility of ASEAN capital market and continue to attract more capital flow. To sum up, as economic integration and upgrade of efficiency and competitiveness is key to our development, Thailand’s financial system is geared to facilitate this process. To do so, financial liberalisation will play a key role, with contribution by ASEAN banks as well as foreign banks operating in this region. Ladies and gentlemen, I would like to reiterate that with solid economic strengths and a wide-ranging development in Thailand’s financial system, the Thai economy will continue to be resilient in the face of the dismal global outlook. The BOT is fully committed to sound monetary policy conduct and financial-sector development via the Financial Sector Master Plan as well as play a supporting role in Capital Market Development Master Plan. Let me end my remark by thanking the British business community for substantial contribution to our economy. Your contribution will not only strengthen our long history of economic partnership but also bring economic prosperity to both Britain and Thailand. I very much hope that the mutually beneficial ties between British and Thailand will blossom into the future. Thank you  BIS central bankers’ speeches  3
Market failures in infrastructure provision and single points of failure It is instructive to consider why providers of the market infrastructure and their members might, left to their own devices, invest too little in resilience and risk-mitigation. The answer lies in the microeconomics of infrastructure provision, and, in particular, the presence of market characteristics such as network externalities, increasing returns to scale and coordination failures. By network externality, I refer to the incremental benefit derived by existing owners of a particular good or service when another party purchases that good or service. For instance, the broader the participation in a particular exchange or trading facility, the more extensive the trading opportunities and the deeper the liquidity; as a result, the greater the potential benefits from membership of that exchange. Equally, in the case of post-trade infrastructure – clearing and settlement systems – the greater the volume of transactions cleared or settled, the greater the potential for netting exposures and/or cash-flows (or in gross payment and settlement systems, the more efficiently liquidity can be recycled). BIS Review 77/2007  3  Increasing returns to scale reflect the fact that infrastructure provision is, by and large, a fixed-cost business: once an investment has been made in the information technology supporting the trade, clearing or settlement of a given volume of transactions, the marginal cost of each transaction up to the capacity of the system is very low.

This is because traceability in our food products allows customers to realize the added values; whether they are transgenic or organic. This is one of the examples that the presence of the digital technology gives us the potential to move up the value chain in terms of food, which will provide large benefits in terms of employment and income due to Thailand’s high employment exposure in the agricultural and related sectors. Apart from food, tourism is another sector that would benefit from digital technologies. Currently, most of our tourism would stay for a short period of time and hence do not spend much. However, the digital technology’s trend towards work-from-anywhere provides the opportunity for us to attract different types of tourists who come, work, and stay for a long time. They are able to work from anywhere using working-from-anywhere technology which provides significantly higher value-added for the tourism sector. Because of that, one area that needs the improvement immediately is our visas and other regulations which are preventing us to realize possibilities from increasing values that we get from foreigners and foreign workers. Another area that people talk about is medical tourism. With the help from telemedicine technology, patients will able to come here because the technology allows them to talk to their doctor back in their home country while the actual medical treatments are provided by the doctor here in Thailand.
It is more important to ensure that the goods markets also adjust and the inflated price level drops - this can be achieved by systematically promoting competition and by reducing state regulations. The eastward enlargement of the EU inevitably begs the question as to whether the rocky bilateral road on which Switzerland has set out will also be a fit for the challenges of the future. Accession to the EU is currently not an issue, however. Reasons for the scepticism of the Swiss people in this regard are manifold. For instance, Switzerland would have to give up the Swiss franc if it joined. This in turn would mean a higher interest rate level and an end to our autonomous monetary policy. 2  BIS Review 69/2004  It was precisely in the past three difficult years, that the possibility of conducting an independent monetary policy proved advantageous. At the beginning of 2001, the Swiss National Bank relaxed its monetary policy before the European Central Bank and, in the following months, also cut its short-term interest rates more drastically than the ECB. In March 2003, we lowered our key rate, the three-month Libor rate, to almost zero. This was in reaction to the deflationary risk in the wake of the strong appreciation of the Swiss franc. We have, in the meantime, pushed our interest rates back up slightly.

This leaves a third alternative - that is to boost income through stronger economic growth. A majority of people favour this solution, yet there is no consensus as to how it might be realised. Some support stimulating demand, especially with a view toward monetary policy. Others put the emphasis on supporting the market forces by deregulation and liberalisation. However, these same people will often shy away from drastic measures as soon as their own interests are concerned. The National Bank can support economic growth with its monetary policy as long as the goal of price stability is not jeopardised. This is the case when economic growth reaches capacity limits. However, monetary policy cannot increase the growth potential. To achieve this, measures are needed that provide more room for manoeuvre and foster initiative and readiness for innovation on the part of individuals and corporations. In recent years, Switzerland has seen a number of reforms that head in the right direction and - in some cases - that have proven to be successful. For instance, the telecommunications sector and the hotel and restaurant industry have been liberalised, the cartel laws revised and - last but not least labour market policies have seen changes as a result of the free movement of persons between the EU and Switzerland. Admittedly, some of these reforms have been implemented only half-heartedly and - what’s more - under pressure from outside.
In our latest forecasts, however, none of these factors has suggested that there will be any significant changes in the exchange rate for the krona in the period ahead. 25 The krona does not need to be strengthened, but Sweden is still affected by the global imbalances Despite the fact that Sweden has had a substantial current account surplus for 15 years there is nothing to suggest that this surplus must become a deficit within the near future to  24  See for example Lane and Milesi-Ferretti, 2002. 25  For a more detailed discussion of the long-term development of the krona see Lagerwall and Nessén, 2009. 12  BIS central bankers’ speeches  prevent Sweden from accumulating a large net claim in relation to the rest of the world. Nor is there anything to suggest that the Swedish krona should appreciate in real terms to enable a shift in the current account from a surplus to a deficit. As Sweden, as far as we can see, does not have any significant positive net external position, there is nothing to say that the real exchange rate needs to be strengthened for reasons relating to the net position. A general reduction in the global imbalances could, however, have consequences for Sweden.

A strong increase in the population has expanded the growth capacity of the Norwegian economy without a comparable increase in wages. In particular, the supply of foreign labour has increased sharply after EU enlargement in 2004. Over the past two years, these labour inflows have accounted for over 30 per cent of growth in the labour force in Norway. At the same time, this has enabled Norwegian companies to be bolder in accepting new assignments and investing knowing that they can procure labour throughout Europe. In addition to increased labour inflows from Poland, Lithuania and other central European countries, we have long benefited from inflows of labour from Sweden. Many workers are on temporary assignment and their consumption is primarily concentrated in their home country. The Norwegian economy has seen a net capacity increase. Third, the Norwegian business sector has been quick to integrate new technology. This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in banks and other service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport. This results in lower production costs.
The removal of policy accommodation associated with the Fed’s securities portfolio reductions should over time be expected to put some upward pressure on longer-term interest rates.12 However, the relatively muted increase in term premiums seen so far may in part reflect the non-zero probability that market participants assign to the FOMC deploying the balance sheet again if future economic conditions were to warrant more monetary easing than could be achieved solely through reductions in the federal funds rate, consistent with the FOMC’s normalization plan guidance.13  … but where is it headed? The FOMC has started the process of normalizing the Fed’s balance sheet and has provided some general guideposts. The Policy Normalization Principles and Plans state that the Committee intends for the Federal Reserve, in the longer run, to hold no more securities than necessary to implement monetary policy “efficiently and effectively,” and that it will hold primarily Treasury securities.

The effective federal funds rate (EFFR) has been within the FOMC’s prevailing target range on all but one day, and changes in the federal funds rate continue to transmit in a predictable and effective way to other money market rates.7  Balance sheet normalization commences… With normalization of the level of the federal funds rate well underway and interest rate control effectively established, the FOMC has now begun the process of normalizing the Fed’s balance sheet, using a program described this past June in an addendum to its Policy Normalization Principles and Plans.8 Specifically, as of last month, the FOMC is gradually reducing the Fed’s securities holdings by decreasing its reinvestment of principal payments received from those securities, with payments being reinvested only to the extent that they exceed gradually rising caps.9 This process for reducing the balance sheet will run in the background, while changes in the target range for the federal funds rate are the FOMC’s primary means of adjusting the stance of monetary policy.
Where the recovery in demand outstrips supply, it is entirely possible that we will witness temporary periods of excess demand, or what more commonly we might describe as “bottlenecks”. This is especially likely within particular sectors, given the uneven nature of the recovery. In a “normal” recovery, signs that cost pressures were increasing and firms were experiencing capacity constraints, would be a clear warning sign that demand was returning close to potential supply. However, this is not necessarily the case now, because we expect both demand and supply to continue to recover towards their pre-pandemic levels. Consistent with this, we are seeing rebounds and normalisation of some commodity prices, though oil prices are now if anything rising above their averages of the last 5 or so years, while, for instance, in the US, lumber prices having risen sharply, are now retracting a sizeable part of that rise. There are plenty of stories of supply chain constraints on commodities and transport bottlenecks, much of which ought to be temporary. There are shortages of some products, notably semi-conductors, some agricultural commodities, and some end user products such as fitness equipment and home and garden furniture – the stuff we take solace in during a time of lockdown. Many of the factors behind these constraints are global in nature, reflecting shortages of products and transport capacity, set against the strength of the recovery to date and expectations of strong future growth.

Just suppose for a moment that, for the rest of this year, the level of average earnings is flat – what would be the peak rate of growth of the series? The answer would be 7% due to the sizeable base effect, and then it would fall back quickly, other things equal. Needless to say, 7% is a chunky growth rate for earnings, but on its own it would tell us nothing of real substance about the future. That is not where we should place most of our focus on the labour market. Our focus should be on whether, and how rapidly, people return to the labour force, and in what degree, a point I will come to in a moment. The risks to the outlook for inflation Let me now turn to what could cause things to turn out differently, and thus what we must watch very carefully. First, so far, we have seen a pick-up in import prices which has extended beyond energy prices, and we have observed these increases pass through into producer output prices, 3/5  BIS central bankers' speeches  and now into consumer prices, to some extent. In some cases these increases reflect prices returning to pre-Covid levels, and in part they also reflect bottlenecks in supply chains as we experience a rapid but uneven recovery. There are good reasons to interpret this as a temporary feature, but we must be on the lookout for the risk that these features are more sustained.
The main aim of the euro area today is therefore to bring consistency back: that is, to make governance of different policy areas mutually consistent and internally consistent. Let me briefly review how this is being addressed in the banking, fiscal and economic domains. Banking union Since 2012, the priority has been to restore consistency between the single monetary policy and other policies – that is, to guarantee the singleness of money irrespective of the fiscal health of sovereigns. Essentially, this had to involve removing the fault lines between national banking systems that called into question the fungibility of deposits, and that meant bringing those national systems together into a single system. This is where the banking union comes in. Banking union means three things: it means a single supervisory framework that minimises equally the risk that a euro area bank takes excessive risk and runs into failure. It means a single resolution framework, so that if a bank does still fail, it can be resolved in the same way, with limited use of taxpayer money, irrespective of where the bank is located or the fiscal strength of its government. And it means a system of deposit protection that provides depositors with equal confidence that their deposits are safe, regardless of jurisdiction. In terms of implementing these three elements, the euro area has made considerable progress. And importantly, the governance reforms that have been agreed are much more internally consistent.

Zeti Akhtar Aziz: Enhancing interlinkages and opportunities – the role of Islamic finance Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Islamic Finance Conference "Islamic Finance in Southeast Asia: Local Practices, Global Impact"; Georgetown University, Washington DC, 18 October 2007. *  *  *  It is my great pleasure to be here in Washington D.C. to speak at this important conference which has brought together policymakers, market practitioners, members of the academia and the business community to discuss the new opportunities in Islamic finance and its role in enhancing international financial linkages. It is exactly five years ago, when I spoke on this very subject of Islamic Finance at the First International Islamic Finance Conference that was held in Washington D.C. in 2002. The issues discussed at that time were on the challenges faced in developing an efficient and robust Islamic financial system. Five years hence, the Islamic financial system has evolved significantly to become a dynamic and competitive form of financial intermediation in the global financial system. This transformation has been achieved in an increasingly challenging environment. My remarks today will focus on this transformation that has taken place in these five years in both the national and international Islamic financial system.
We – the central banks of the region – should represent an example in this direction. As pioneer institutions of progress, the central banks of the region should cooperate with each other in order to expand the road for a further political, social and economic integration. I believe that the chances for a rapid and secure process of European integration could be accelerated if we will have – among others – a healthy and safe financial and banking system, which should be able to advance the economic development of the country. Nevertheless, in order to materialise the objective for the approximation of their model with that of the EU member states, we hold the opinion that the central banks of the transition countries have more difficult “homeworks” than the classical responsibilities carried out by a central bank. Speaking in more concrete terms, this has to do mainly with the challenges related to the development of markets, with the unification of different norms and standards and with enhancing credibility in the country, thus aiming at the creation of an atmosphere that inspires confidence to foreign investors. Even though they have passed into the consolidation stage, our banking systems still remain fragile, and as such, they require greater commitment and care. Regardless statistical developments, the scale of financial intermediation is relatively low, whereas time after time the shadow of shocks on the economic equilibra shows up itself in different countries.

Average earnings have been growing at around 4.5% per year, house prices have been rising by between 10-15%, and total consumer borrowing is the highest in real terms since 1988. But, even given these factors, consumption growth has been strikingly strong. There are, of course, downside risks to the outlook for consumption in the UK. Consumer confidence fell in September, even before the terrorist attacks. Despite the recent rally, equity prices are still much lower than their peaks eighteen months or so ago, and that will have reduced consumers' financial wealth. And there may be the first sign of easing in the labour market which, if it persists, will reduce disposable incomes. Despite this, however, there is little sign yet of any sharp reduction in consumer spending. Retail sales volumes grew by 5.9% in the year to September. That picture of continued strength is corroborated by the CBI Distributive Trades Survey measure for September (gathered largely after the 11 September attack), which was the highest since October 1996. And the higher frequency British Retail Consortium survey suggested that sales volumes by the end of September had returned to pre-attack levels. I focus on the continuing strength of consumption because it - together with its partial correlate on the output side, the retail service sector - is absolutely key to understanding why UK interest rates have fallen less far than in other countries. But, of course, elsewhere in the economy, things have been looking less bright for some time.