samchain/econo-pairs-v1 huggingface dataset:
So if we are not hopeful that Hong Kong can produce many Bill Gates or Steve Jobs in the future, don’t be disillusioned as it is still within the reach of all of us to uphold the values or formula that has transformed Hong Kong into the most vibrant and successful centre in trade, commerce, tourism and finance in Asia in the last two to three decades. 11. Thank you. BIS central bankers’ speeches  3

This is a very favorable development for the economy and monetary policy, which can safely “look through” transitory shocks. Anchoring Inflation Expectations at the Target This brings me to my second point of the importance of anchoring inflation expectations at the target level. As HMS correctly stress, policymakers cannot take for granted that inflation expectations will remain well anchored. They highlight the risk that very tight labor markets could eventually lead to a resurgence of inflation and unmoor expectations, as in the 1960s. I concur that we must remain vigilant regarding a sustained takeoff in inflation. We must be equally vigilant that inflation expectations do not get anchored at too low a level. So far during this expansion, core and overall PCE inflation has averaged about 1.5 percent, well below the Fed’s 2 percent target. Taking a longer perspective, over the past 25 years, core and overall inflation have both averaged 1.8 percent. This persistent undershoot of the Fed’s target risks undermining the 2 percent inflation anchor. In this regard, research by Ulrike Malmendier and Stefan Nagel is sobering.6 They find that inflation expectations are heavily influenced by the inflation experience in one’s own lifetime, which implies that decades of too low inflation can become embedded in expectations. Indeed, we have seen some worrying signs of a deterioration of measures of longer-run inflation expectations in recent years, as seen in Table 2.
None of these challenges are new: they have been clearly identified, they require forceful action and they will be solved over time. What about Germany’s banks? Deutsche Bank and Commerzbank have lost a lot of trust. I can’t talk about individual banks. Generally speaking, European banks are in a transitional phase and are rethinking their business models, also concerning technological developments. They also face a new regulatory environment. We have had a new framework for the resolution of banks only since the beginning of January. Together with the single supervision, this system will make them stronger and better protect taxpayers, but banks and investors are still learning about it. Is a new financial crisis more likely? No. Today in the euro area we have economic growth of between 1% and 1.5% and accelerating, while a few years ago it was negative. This growth is helping the banking sector to recover. Provided we stay on this path I’m optimistic that the crisis will not return. Low interest rates and rising share prices normally go together. Why is this mechanism no longer working? As explained earlier, there are other reasons for the recent market movements. Looking back over a longer period, the low interest rates have clearly given a boost to stock markets. How much longer will the period of low interest rates last? As long as needed. Rates will have to stay low until we see that the inflation rate in the euro area is moving towards our objective of just below 2%.

But the ECB is responsible for withdrawing the € note. We have direct responsibility for this because of course we print the banknote. The ECB’s Governing Council is currently considering very carefully the question of whether or not to withdraw the € note. We hear from the competent authorities that the € note is increasingly being used to finance terrorism and launder money. We take this warning very seriously in the Governing Council. What is your personal view? Personally I think that we now have fewer reasons for keeping the € note than we did when the euro was first introduced, because electronic payments have become much more important. We have been told that the banknote is increasingly being used for criminal activities. That’s why I believe that the € banknote will eventually be withdrawn, but it has to be done carefully. Let me emphasise that this does not mean that we should do away with cash in general. Cash is crucial in our everyday lives. So even if the € note no longer exists, people will still be able to use all of the other banknotes. Given the high importance of cash for the citizens, there is no discussion whatsoever about getting rid of it in general. Greece is under strain from the thousands of refugees who arrive on its shores each day, and it is also going through a severe crisis at the same time. Is the refugee crisis weighing on Greece’s recovery?
Stable prices also facilitated firm investment and the creation of new jobs. Today, there are 20 million more Europeans in employment than 20 years ago in the 19 countries that currently make up the euro area. And since the creation of the euro, the labour force participation rate has risen from 59% to 67%, its highest level ever. The two decades in which the euro has existed have been exceptional. The first decade was the culmination of a 30-year period of macroeconomic stability, also known as the Great Moderation. Inflation averaged close to 2% and the ECB ensured price stability mainly by adjusting its key interest rates. The second decade produced the worst economic and financial crisis since the Great Depression. As I had the opportunity to discuss at length in my remarks at the Parliament’s plenary debate two weeks ago, as a response to the crisis we had to deploy new instruments to safeguard the effectiveness of our monetary policy and stabilise the euro area economy.1 Thanks to the collective efforts of all European citizens, the euro area has emerged from this crisis. The results of their and their representatives’ determination have been tangible: 22 consecutive quarters of economic growth, the unemployment rate at its lowest level since October 2008, and wages and incomes on the rise. However, over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector-specific factors.

The persistence of uncertainties in particular relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment. 1/4  BIS central bankers' speeches  At the same time, supportive financing conditions, favourable labour market dynamics and rising wage growth continue to underpin the euro area expansion and gradually rising inflation pressures. This supports our confidence in the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. Significant monetary policy stimulus remains essential to support the further build-up of domestic price pressures and headline inflation developments over the medium term. This will be provided by our forward guidance on the key ECB interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets. In any event, the Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner. The euro’s external dimension The benefits of the euro have not been limited to the European internal dimension. Standing together within the Economic and Monetary Union (EMU) allowed us to retain sovereignty that would otherwise be lost by individual countries in a highly integrated world economy. As already envisaged at the time of its creation, the euro symbolises the unity of a European continent that is better able to exert global influence.
Term premia capture the risks that investors, having locked into a long maturity fixed-interest bond bear over the life of the bond. They are the extra compensation that investors demand to balance the fact that they will be holding a fixed interest long-maturity bond rather than simply rolling over a sequence of perfectly liquid, risk-free short-term bonds. Work by Bank of England economists last year estimated that the trend real rate of interest in advanced economies had fallen by around 4½ percentage points over the last 30 years, from around 4½% to around 2  0%. There are a range of other estimates which show broadly similar results. 3  The Bank work investigates the structural changes in the supply of savings and in the demand for investment that have led to the drop in the trend real rate of interest. It finds that the supply of savings has grown since the 1980s while the demand for investment has shrunk. The higher supply of savings accounts for around two-fifths of the drop in the trend real rate. Demographics, as older people save more, higher inequality, as richer people save more, and the Asian savings glut, drive this higher level of global savings. 2  See Rachel, L. and Smith, T. (2015). “Secular drivers of the global real interest rate”, Bank of England Staff Working Paper No. 571.

But while central banks need to be mindful of the possible side-effects of their policies, I would caution against requiring them to make more granular distributional judgments. Low and stable inflation and smoothing output volatility are public goods that benefit all; technocratic central bankers should use the tools available to them to achieve that public good and avoid as far as possible taking views on distribution. Distributional considerations and decisions should remain the province of elected authorities that have many instruments to address these issues. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  I have discussed some of the policy implications of a low natural rate for central banks generally. In the UK, of course, Bank policy is now focused on assessing and, where necessary addressing, the implications for the economy over our policy horizon – the next two to three years – of the UK’s forthcoming exit from the European Union. I don’t need to say too much about this today. The minutes of the MPC’s November meeting and the November Inflation Report give a detailed picture about the Committee’s current forecast and policy stance to which I fully subscribe. But there is one point that is relevant to the analysis I have just laid out on the natural rate. As I said earlier, the policy rate may need to depart from the natural rate if the policymaker is faced with a shock that creates a tradeoff – for example between bringing inflation to target and smoothing output volatility.
First, the Fed is providing funds in response to an extreme move in the price of liquidity – that is, it is in effect buying a cheap asset. Second, the programs themselves, if successful at returning market functioning, would help the performance of the Fed’s loans to be sound. And third, the lending under these facilities has to be adequately secured. Asset holdings: a policy lever While the exit from the liquidity facilities has been successful, the exit from the accommodative stance of monetary policy involves a different set of challenges. Many of these challenges arise from the Federal Reserve’s outright holdings of Treasury debt, agency debt and agency mortgage-backed securities (MBS), which together represent the overwhelming share of the Fed’s balance sheet today. Indeed, as a result of our large-scale asset purchase programs, these asset holdings now account for $ trillion of the Fed’s $ trillion balance sheet. The Federal Reserve is approaching the scheduled end of its large-scale asset purchases. We have bought $ billion of agency debt to date, nearly fulfilling our plan to purchase “about $ billion”. For MBS, we have only about $ billion of purchases remaining to reach our $ trillion target. In addition, we completed $ billion of purchases of Treasury securities late last year. Looking across these programs, we have now purchased $ trillion of assets, bringing us 98 percent of the way through our scheduled purchases.

In addition, about $ billion of Treasury securities mature between now and the end of 2011, giving the FOMC scope to reduce its asset holdings even further if it chooses to not replace some of those maturing securities. While the passive strategy of relying on redemptions may be appropriate for now, it might not be sufficient over the longer-term. One problem is that relying only on redemptions would still leave some MBS holdings on our balance sheet for several decades. As indicated in the minutes from the January meeting, the FOMC intends to return to a Treasuries-only portfolio over time. This consideration could motivate the FOMC to sell its agency debt and mortgagebacked securities at some point, once the economic recovery has progressed sufficiently. Draining tools: control of short-term rates Under the strategies just described, the Fed’s asset holdings are likely to still be elevated at the time that the FOMC wants to raise short-term interest rates. That creates a challenge for controlling those rates, because of the large amounts of reserves that were created from the Fed’s purchases of those assets. It is therefore important for the Fed to determine the way in which it will raise short-term interest rates in an environment with so much liquidity – a topic that I will now cover. The primary vehicle for making adjustments to short-term interest rates in that environment is the ability to pay interest on reserves.
in the area of the provision of professional services, meaning we cannot consider the single market to be complete. In addition, the creation of the single currency has been another key transformation on the road to greater integration. The euro constitutes the world’s most ambitious economic integration process since the Second World War ended. It was in Maastricht, in 1992, just before the entry into force of the single market, when 12 Member States decided to exceed this initial economic objective and plan a monetary union. Like the single market, the euro was also the result of lengthy debates, negotiations and preparatory phases, which were not always fully successful. Indeed, opt-out clauses from the Economic and Monetary Union had to be provided for the United Kingdom and Denmark. Despite these difficulties, the euro was introduced in 1999 and, following the euro banknote and coin changeover in 2002, it has since been a tangible reality for all citizens. Indeed, according to the latest Eurobarometer, its popularity is at a height in the 19 euro area countries.1  1  74% of citizens are in favour of the euro. 4/10  Creation of the SSM and the SRB. But while the introduction of the euro was deemed a success, its institutional design evidently had specific problems which the crisis that broke a decade ago clearly highlighted. Twenty years ago, Christian Noyer said that the introduction of the euro should act as a catalyst for new reforms and greater integration.

In the introduction of accredited training courses, it is necessary to co-operate with leading and renowned educational institutions to provide quality training so as to achieve the objective of raising professional standard and gain wide recognition. I am happy to announce that the Chinese University of Hong Kong and the University of Science and Technology will offer certificate programmes on dealing, settlement and fixed income securities. Practitioners can take these courses to obtain a professional qualification to meet part of the membership requirement of the Association. In addition, the new regime recognises the rapid evolution in financial markets, and the need for continuous professional training in upgrading the skills and expertise of practitioners. A new requirement on continuous professional training is therefore introduced for the renewal of the membership. In strengthening the international financial centre status of Hong Kong, it is important to foster our advantage in having a professional workforce. We believe that the launch of the new membership regime of ACI - The Financial Markets Association of Hong Kong and educational programmes will help upgrade the technical skills and expertise of treasury market professionals and help them to catch  BIS Review 58/2004  1  up with the latest developments in the markets. This will work towards our ultimate goal in raising overall competitiveness of treasury markets in Hong Kong. Alongside the rapid growth of the Mainland economy and the gradual liberalisation of their markets, there is an increasing demand for treasury markets products and services from the Mainland.
But the strength of the fiscal policies implemented so far, and the structural reforms undertaken by the political authorities, should substantially reinforce the chances that our exchange rate policy will succeed. Our exchange rate policy will receive further support from monetary policy. To promote this, we are moving to a more rule-based monetary policy and away from one based on discretion, especially during the first 18 months. During this period, the Central Bank of Turkey will not increase its stock of net domestic assets. All fluctuations in base money will come from balance-of-payments flows. Accordingly, the ceiling on net domestic assets at the end of each quarter is fixed at TL –1,200 trillion (excluding the change in the revaluation account, which is part of the net domestic assets definition). In addition, during this period, net domestic assets will fluctuate within a parallel band whose upper and lower limits will be determined as plus-or-minus 5% of previous end-of-quarter base money figures. In recent years, we have been limiting net domestic assets by decreasing credits to the public sector. This policy will be continued in coming years. In addition, we will also stop sterilising the capital inflows and outflows. This policy of no sterilisation will permit rapid, market-determined changes in money market interest rates, and will create an automatic mechanism for determining Turkey’s international reserves, and hence base money. When there is an excess of demand for foreign exchange, the withdrawal of Turkish Lira from the market will not be offset by increasing net domestic assets.

The Banking Law that was enacted by Parliament in the summer of 1999, and the amendments made during the last month, were aimed at giving the banking system the necessary efficiency and soundness. In conclusion, let me summarise recent history. We have been working on this program for the past two years. Its technical excellence accurately reflects well the effort that has gone into it. I do not hesitate to say that the program is “comprehensive”, “strong”, “ambitious”, “bold” and “imaginative”, and most of all “achievable”. The willingness of the political authorities to execute this program is clear from the way they have taken the necessary but politically difficult economic decisions: quickly, without hesitation or second thoughts. The IMF and the World Bank have strongly endorsed the program, the former by approving for Turkey a three-year standby arrangement, and the latter by extending project credit. The prospect of membership negotiations with the European Union pursuant to the Helsinki decision provides an additional strong incentive to implement the program forcefully. There is a strong autonomous ownership of the program. The Government, the Parliament, policymakers, and the social partners all understand the great rewards, particularly in terms of reduced interest costs and stable growth, that will follow the program’s successful implementation. The markets’ reactions to the program have also been very positive. Interest rate declined from 100% last October to the 30s recently.
There are several factors that may explain the decline in net interest margin observed in this period. First, it is the result of the increase in the relative share of non-productive assets, that is, assets that do not earn interest, such as non-performing loans or foreclosed assets. In addition, this period saw a severe contraction in banks’ credit portfolios, a reflection of the sharp correction in the high indebtedness accumulated by Spanish households and firms in the pre-crisis years, and of the loss of share of the banking system in the financing of the economy. Banks cushioned the balance sheet effect of this contraction in their credit portfolios by increasing their exposure to other assets, especially through government debt purchases. As these debt securities provide lower returns than lending to households and firms, in the long run this portfolio rebalancing resulted in a fall in the average return on assets. However, when the sovereign debt crisis came to an end, the increase in value of these debt securities provided a positive, albeit short-lived, boost to profitability. On our estimates, the overall effect of these changes in asset composition – associated with the increase in non-performing loans and the decrease in the relative share of credit on balance sheets – would explain some 70% of the decline in net interest margin in the Spanish banking system between 2007 and 2018.

Heng Swee Keat: The next stage – policy challenges in Asia Keynote address by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the Paris Europlace International Financial Forum, Singapore, 26 October 2009. *  *  *  Governor Noyer, Your Excellencies, Ladies and gentlemen, Good morning It gives me great pleasure to join you today at this Paris Europlace International Financial Forum. Let me warmly welcome Governor Noyer and our overseas visitors to Singapore, and welcome Mr Bresson and your team for holding this Forum in Singapore. Policy challenges ahead A year ago, the global financial community was grappling with a severe crisis that hit every part of the globe and every sector. We were on the edge of an abyss. The timely and forceful action by authorities, including the use of unconventional monetary policy tools, helped avert the worst. In recent months, the global economy and financial markets are showing signs of stabilization. Though we are yet to see a firm or sustainable rebound in final demand, there is a sense of relief, even optimism. Now, what’s next? What will be the shape of the recovery, and what policy actions are appropriate? It is difficult enough to make policy judgments in normal cyclical downturns. It is even harder now that this downturn is not a garden variety recession.