samchain/econo-pairs-v1 huggingface dataset:
Several commentators have claimed that the financial excesses of the time could have been curbed had domestic interest rates been that much higher. Indeed the case is still being made, even now that macro-prudential tools are available, that interest rates should respond to changes in financial conditions more aggressively than their implications for inflation would warrant. But going back to the pre-2008 period, how effective would that have been, and at what price in terms of the stability of growth and inflation? I’m not convinced, in an open economy like the UK, where the financial climate is determined more abroad than at home, that higher interest rates would have helped that much – not, at least, without a materially negative impact on growth and a rate of inflation even further below the MPC’s target. The tendency for financial cycles to move in common across countries is apparent in data well before 20089. The financial crisis itself was certainly global in nature, and what happened to British banks certainly bears this out. The significant majority of the expansion in the balance sheets of British banks ahead of the crisis,  8 9  See Meeks (2017). Rey (2013), Baskaya et al. (2017). 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  and of their losses thereafter, involved overseas assets (Charts 4 and 5). Domestic lending, the most sensitive to domestic interest rates, was not the main source of the problem.

Leeper, E. M. (1991), “Equilibria under 'active' and 'passive' monetary and fiscal policies”, Journal of Monetary Economics, Vol. 27, No. 1, pages 129-147. Meeks, R. (2017), “Capital regulation and the macroeconomy: Empirical evidence and macroprudential policy”, European Economic Review, Vol 95, pp125-141. Rey, H. (2013), “Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence”, Federal Reserve Bank of Kansas City Economic Policy Symposium. Sargent, T. and Wallace, N. (1981), “Some unpleasant monetarist arithmetic”, Federal Reserve Bank of Minneapolis Quarterly Review, Vol. 5, No. 3. Svensson, L. (2015), “Monetary policy and macroprudential policy: Different and separate?” presented at the conference ‘Macroprudential monetary policy’, Federal Reserve Bank of Boston’s 59th Economic Conference, available at https://www.bostonfed.org/macroprudential2015/papers/Svensson.pdf. Tucker, P. (2011), “Macroprudential policy: building financial stability institutions”, Speech given at the 20th Annual Hyman P. Minsky Conference, available at https://www.bankofengland.co.uk/speech/2011/macroprudential-policy-building-financial-stability-institutionsspeech-by-paul-tucker. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16
Some economists think that a shift from a rigid exchange rate regime to a free float would result in lower interest rates to ease the interest rate pain. However, recent experience in Asia has shown that the market demands even higher interest rates than before under a floating rate regime due to the need for hedging, since there is a perception of higher credit risks and exchange rate risks. 17. I interpret the currency turmoil in the region not as exchange rate volatility, but as a painful but necessary adjustment in the real economy (manifested through the financial system and markets) to the new world of greater competition. In essence, we must all work harder to get greater productivity gains to meet the new challenge. No one can afford to be complacent in this global world. To the extent that the free market is demanding higher interest rates because there is a reverse flow of capital from Asia to the OECD markets, we will all have to bear the pain and adjust accordingly. 18. And not all interest rate pain is bad. Higher interest rates would increase savings in Hong Kong and bring inflation down further, thus increasing our competitiveness. To the extent that higher interest rates would reduce house prices, they would also make housing more affordable. 19. The currency board system with a fixed exchange rate is appropriate for a small and highly externally-oriented economy like Hong Kong. It further imposes a strict discipline on public finances. Hong Kong runs budget surpluses, not deficits.

4  Commodity cycles may be linked to global business and financial cycles at critical junctures, but commodity long cycles are more related to technological progress, changes in the composition of demand, and global trade patterns (see Figure 2). 20 15 10 5 0 -5 -10 -15 -20 -25 -30 1980  Figure 2: Commodity super cycles and global conditions (†)  1985  1990  1995  2000  2005  2010  2015  40 30 20 10 0 -10 -20 -30 -40 -50 -60  EMEs Business Cycle AEs Business Cycle VIX (inverse, standardized, 10x) Comm. PX Cycle (excl. Fuel) [RHS] (†) Business and commodity prices based on HP filter. Source: Central Bank of Chile based on IMF and FRED databases. The experience of Chile since 2000 Chile has been traditionally exposed to global cycles, speeded-up growth in the mid-1980s, once a major financial crisis led to a major upgrade in financial regulations. This bonanza period was halted by the Asian Crisis in mid-1997. The Central Bank tried to sustain the Chilean currency, by then under crawling bands, in the middle of a substantial external shock. This led the Central Bank to raise the interest rate to 14%, by then a real interest rate. Thus, the financial system face overnight rates of nearly 100%. The Chilean economy enters into a recession in late 1998. Floating ER was added to forward-looking inflation targeting, and then complemented by a Structural Balance-based fiscal policy in the early 2000s.
The Riksbank is the only instance that has the express task of trying to ensure that the inflation target is met. Of course, the Riksbank also has the task of “promoting a safe and efficient payment system”, which should be interpreted as acting to ensure the financial system is stable and functions smoothly. But, as I have already pointed out, the latter is a task that the Riksbank shares with the Government, Finansinspektionen and the Swedish National Debt Office. Finansinspektionen has the responsibility for the macroprudential policy tools, which comprise the first line of defence with regard to counteracting the emergence of financial imbalances. As I have just mentioned, there is an international discussion on whether monetary policy may need to support macroprudential policy in certain situations. But I have also argued that one condition for this is that there is firmly-established confidence in the inflation target. It is this confidence that creates the scope for monetary policy to take other issues into consideration. Confidence in the Riksbank’s inflation target has long been fairly firmly rooted. But what has happened in recent years is that inflation has fallen to very low levels, instead of beginning to  6  BIS central bankers’ speeches  rise towards the target as the Riksbank and other analysts have expected. The period with an inflation rate below the target has thus gradually become longer and longer. Parallel to this development, the long-term inflation expectations among economic agents have fallen.

Ladies and Gentlemen, Banks which do not make investments to take advantage of the new technology may find themselves losing customers to the better-quality or lower-cost products of banks that do. Investing in IT however, entails high cost and an uncertain payoff. The changes brought about by IT - new products, more sophisticated customers, changing cost structures, and enhanced competitive pressures - have all combined to transform the structure of the banking industry. And with further development of new technology, the industry will likely continue to evolve. Advances in IT have also resulted in new database technology and data-mining techniques that can expand the range of services that banks may offer their customers. The winners will be those who are able to harness on the capability of ICT in making strategic decisions - in terms of enabling better alignment of businesses, enhancing organisational capacity and capability such as in risk management, and building better customer relationships. Today, decisions on ICT investments demand a more thorough assessment, extending beyond the cost implications, to include better human resource redeployment, more efficient work flow process and system interface, expandability of the technology platform and the level of complexity to users and customers. BIS Review 33/2002  3  As banking institutions continue to adopt greater sophistication in the application of ICT, efforts must also be intensified to develop ICT-savvy employees and to increase customers’ understanding and acceptance of the new approaches.
In the past, rising demand led in time to growing tensions as the supply side became increasingly strained and this resulted in higher inflationary pressure. Rising inflation normally functioned as a warning to decision-makers that a tighter economic policy was called for. The latest upward phase seems, however, to have been more the harvest of a dynamic interaction of demand and supply. Technological advances have contributed to higher productivity. Aided by the new technology, gradually rising consumer and corporate demand seem to have generated an increasingly rapid expansion of supply and thereby a further stimulation of demand in a sort of expansive circle. The traditional alarm bell — inflation — has not sounded because the domestic cost pressure has been countered by the productivity gains and the appreciating exchange rate. But there have been other alarm bells in the form of asset prices, saving and imbalances. There are a number of historical examples where expectations of rising profits and incomes have contributed to increased demand and an expansion of supply, laying a foundation for an expansive spiral. The clearest instances seem to have occurred before world war one or in the interval between this and world war two. The euphoria over an innovative and favourable beginning has usually led, in the more mature phase of the upswing, to fundamental imbalances in the real economy that have sometimes taken a long time and considerable efforts to rectify.

First, eTradeConnect will provide the infrastructure for digitalising trade finance, as well as support cross-boundary trade between Hong Kong and Mainland China. Second, CDI will link up various digital islands to form a seamless data ecosystem. And finally, mBridge will expedite cross-border payments while reducing costs. 18. We believe that the combined power of the three infrastructure would pave the way for digitalising cross-border trade in the trade corridor between Hong Kong, Mainland China, and other APAC regions. I hope to share further updates with you in the not-so-distant future, and 2/3  BIS central bankers' speeches  in the meantime, I welcome your feedback and suggestions. 19. Thank you, and an early Happy Chinese New Year to you all. Wishing you all health, happiness, and good fortune in the Year of the Tiger. 1 Asian Development Bank, 2021 Trade Finance Gaps, Growth, and Jobs Survey. 2 Mr Chu’s story is based on the true story of Joe Chu, a local importer of Qingyuan chickens. Here is the web link  to the interview of Mr Chu and a few entrepreneurs who have used CDI: www.youtube.com/watch? v=Fp6HLkUd3Xo  3/3  BIS central bankers' speeches
Lars Heikensten: Monetary policy and wage formation Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, to the Riksdag Committee on Finance, Stockholm, 13 February 2003. *  *  *  Firstly, I would like to thank you for the invitation to come here to the Riksdag and discuss wage formation together with Anders Lindström from the National Mediation Office and Ingemar Hansson from the National Institute of Economic Research. I shall begin by describing how we take wage formation into account when making decisions on interest rate changes. Then I shall comment on the assessment made in our most recent Inflation Report (published in December), which we did not find reason to alter significantly at our last monetary policy meeting on 6 February. I shall continue by discussing how wage formation may develop in future. In conclusion, I shall summarise and mention some of the challenges facing wage formation. Just over a decade ago, there was a comprehensive realignment in economic policy. The budgetary process was tightened up. At around the same time, monetary policy changed direction, the exchange rate was allowed to float and the new target was to limit inflation to 2 per cent, with a tolerated deviation of plus/minus 1 percentage point. The economic policy realignment can only be described as a success.

If the telecom industry is excluded from the figures for trade and industry, productivity increased by only 1.9 per cent during the period 1995-2000, compared with a growth of 2.8 per cent if it is included. This sector has now greatly declined in importance and there is apparent confusion over its future development. Given this, the average rate of wage increase should not exceed 3.5 per cent over the coming years. In conclusion, it may be worth pointing out that if Sweden joins the Eurosystem, there will be other factors affecting the nominal wage cost scope. This is because the ECB's inflation target may be even more ambitious than the Riksbank's. In this case, and if productivity growth remains unchanged, a lower rate of increase will be needed for nominal wage costs. Summary I shall conclude with a summary. The realignment of stability policy has contributed to wage formation functioning better than previously in the two most recent wage bargaining rounds. The rate of increase in nominal wages has approached reasonable levels, while wage earners have experienced large increases in real wages. This development is underpinned by a good development in productivity. When we look ahead, the picture is more worrying. Profits are under greater pressure. It is not certain that productivity growth can remain as high as it was during the latter part of the 1990s. Given these factors, and taking into account international developments, there is a need to bring the average rate of wage increase down to, or even below, 3.5 per cent.
Chart 10: Equity and bond yields moved  Chart 11: Negatively correlated in recent years  together during the 1990s  Source: Thomson Reuters Datastream  Source: Thomson Reuters Datastream  What might have caused this? In principle, the gap between the yields on equities and bonds depends positively on the risk premium and negatively on expected growth. So you’d expect this divergent pattern if investors revise down their central expectation of future growth, or if they see more risks (particularly downside risks) around that path. Collectively, you might refer to the sorts of things that benefit bonds and penalise equities as “pessimism” shocks. As I attempted to explain in a talk a couple of years ago, a rising downside skew to the perceived prospects for global growth could help to explain not just the divergence in yields but more specifically why it’s occurred via a decline in the real interest rate (Chart 12). 9  This is true if you think of the deficit in proportionate terms (i.e. relative to the value of the fund). It’s also true in absolute terms if a fund is in balance to begin with. It’s not true, however, of the absolute value of the deficit for a fund that begins in deficit. In that case, and measured in absolute terms, deficits would grow in response to a uniform rise in all prices.

-5 Aug IR May IR Business investment (LHS) UK uncertainty indicator (RHS)  -2  10 0  1  -10 -20 1985 1990 1995 2000 2005 2010 2015 Source: ONS and Bank of England calculations  4  Source: ONS and Bank of England calculations  1  I’ve excluded the World War periods because investment growth was so volatile it would have dominated the graph. During World War II investment fell almost to nothing. In 1945 this remained quite low, so in 1946 its growth rate jumped to 1,894%! 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  One obvious reason for the volatility of investment is the natural gearing in such decisions. The flow of 2  investment spending is much smaller than the existing stock of capital . So small changes in the second can require big moves in the first. Suppose, for example, you regularly spend a steady but relatively small amount on repairs and maintenance for your house – something that counts as investment – and then decide, in one particular year, that you want to build an extension. This will have a much bigger proportionate impact on the flow of your capital spending than on the size of the building (the “capital stock”). It will also mean your investment spending is far more volatile, from one year to the next, than your consumption. Similarly, small shifts in a firm’s desired capital stock require much bigger proportionate changes in investment.
Such an initiative could usefully be extended to include similar simulation exercises at the domestic level, and even across many countries at the same time. This would help to meet the following objectives: (i)  assess the degree of preparation of all stakeholders, namely financial institutions as well as public authorities;  (ii)  be sure of their capacity to implement common and consistent measures in order to restart operations after a cyber-attack;  Page 3 sur 3 (iii)  test dedicated crisis communication tools. 3) Monitoring the degree of cyber security and the progress of cyber resilience programmes. Irrespective of the nature of our organisation (a central bank, a commercial bank, an insurance company, a FMI), we have to not only deal with a large number of cyber security issues, but also to coordinate a large number of stakeholders (boards, senior executives, Chief Information Officers, Chief Risk officers, Chief Information Security Officers, etc.,). Therefore it is of utmost importance, but at the same time difficult to obtain an overview of cyber security. All levels of management (technical, operational and executive) need to have appropriate information to monitor cyber resilience and cyber risks. Above all, monitoring cyber security at the executive level (“tone at the top”) may prove to be challenging. Of course, there is a broad range of different metrics and it is necessary to select a limited number of them.

1 International Monetary Fund (IMF), 6 April 2020, World Economic Outlook, April 2020: The Great Lockdown 2 Euromoney, 7 April 2020, Coronavirus crisis offers green and social bonds chance to prove their worth 3 World Bank Press Release No: 2020/180/HNP, 27 April 2020 4 Infrastructure Asia and World Bank Press Releases, 1 June 2020 5 Global Sustainable Investment Alliance, April 2019, 2018 Global Sustainable Investment Review 6 Morningstar, 3 April 2020, Sustainable funds weather the first quarter better than conventional funds;  Morningstar, 28 May 2020, What the pandemic means for sustainable investing 7 BlackRock compilation at 18 May 2020, Sustainable investing: resilience amid uncertainty  4/4  BIS central bankers' speeches
Rosthom Fadli: IMFC Statement Statement by Mr Rosthom Fadli, Governor of the Bank of Algeria, on behalf of the Islamic Republic of Afghanistan, Algeria, Ghana, Islamic Republic of Iran, Libya, Morocco, Pakistan and Tunisia, at the forty-second meeting of the International Monetary and Financial Committee, Virtual IMF Autumn Meetings, Washington DC, 15 October 2020. * * * The global economy is showing tentative signs of recovery, thanks to nimble, proportional, and synchronized global policy responses. The October 2020 W EO’s cautious optimism about the outlook, however, should not overshadow the fact that the Covid-19 pandemic is still evolving and the virus is spreading, with a serious possibility of new infection waves, including in areas where the pandemic was believed to have been contained. While the lockdowns continue to exert a heavy economic and social toll worldwide, containing the pandemic and saving lives are still top priorities. The path of the economic recovery is closely intertwined with the path of the pandemic, which is subject to significant uncertainty. An effective vaccine will be found—hopefully sooner than later—but the vaccine and medical treatments will only be effective if they are available worldwide and at affordable prices, especially for poorer countries. No country or region is safe as long as the virus is spreading somewhere else.

The low-income countries, many already under considerable social and economic strain, are facing daunting challenges because of the crisis and are falling further behind in income convergence. Their heavy debt burden, limited financing options, and little or no policy space make it almost impossible for them to meet the challenges on their own. We call on the international community to rise to the occasion in helping these countries generously through grants, concessional financing and debt relief. We support the extension of the G20 Debt Service Suspension Initiative, as well as the extension of the Catastrophic Containment and Relief Trust, and welcome the progress in securing additional resources for the Poverty Reduction and Growth Trust. We encourage all public and private creditors to participate in similar debt relief operations. The plight of fragile and conflict-affected states in the MENAP region, some facing refugee and humanitarian crises, calls for a timely and proportional international response. The role of international institutions—particularly the Fund—has been instrumental in helping 1/2  BIS central bankers' speeches  countries to alleviate their significant financing pressures arising from the pandemic. We laud the agile response of the IMF to support more than 80 members in the first few months of the crisis through its emergency and other financing facilities. The IMF moved swiftly to expand and adapt its lending toolkit to the needs of the members, including through temporary increases in access limits to its emergency facilities. Yet, requests by some other 20 members for emergency support are still pending for various reasons.