samchain/econo-pairs-v1 huggingface dataset:
Yet the good results can be explained quite logically, since they arise from a combination of particularly favourable factors. First, I would like to mention the remarkable ability of the private sector to adapt to the challenges presented by the globalisation of markets. Thanks to reorganisation efforts in the export sector, results in foreign trade have improved substantially. Over the past ten years, our exports have grown by more than 80%, or five times as fast as the gross domestic product. We now run a surplus in goods trading in addition to our traditional surplus in the area of trade in services. The success of strategies geared to quality and high-tech content are demonstrated by the vigorous growth recorded by exports in high added-value areas such as electronics, watchmaking, chemical and pharmaceutical products. Alongside this we should mention the growth in the exports of services, particularly in the areas of finance and tourism. Overall, our net balance from trading in goods and services has increased from CHF 17 billion to CHF 37 billion in 10 years, in other words, from 4.6% to 8.3% of GDP. Clearly, far from threatening our expansion abroad, globalisation has led to an expansion in our markets from which our companies have been able to derive extensive benefits. The prosperity of our foreign trade depends to a large extent on the good shape of the global economy, whose performance has been very good over the past few years.

Zeti Akhtar Aziz: Regional integration and global integration – is there a conflict? Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Official Monetary and Financial Institutions Forum Kuala Lumpur Debate, Kuala Lumpur, 20 March 2015. *  *  *  It is my great pleasure to welcome you to the inaugural Kuala Lumpur Debates, which is being held on the side of the 19th ASEAN Finance Ministers and Central Bank Governors Meetings. It is envisaged for this to be the first in a series of KL Debates intended to serve as a strategic forum for policy makers, industry players as well as members of the public to constructively discuss the key issues confronting the economies of our region and thus to facilitate greater understanding as we work towards building stronger foundations for sustainable growth. The motion that is put forward for debate today is “Regional integration and global integration: is there a conflict”. The debate format is chosen to allow both points of view to be heard, thereby ensuring a balanced discussion and evaluation of the issues. This topic is highly relevant to ASEAN as there have been various views on ASEAN integration and what it means for the rest of the world.
Given these interactions – and with monetary and financial stability two sides of the same coin – why have two separate committees? Indeed some have suggested we need one committee, to manage trade-offs[15]. If there are material trade-offs between objectives then there’s a good case for making joint decisions about them. Decisions made based on one in isolation would not account for ‘spillovers’ to the other, leading to less effective policy overall. But there are other views. For example, the ‘modified Jackson Hole Consensus’ (reflecting a rather scenic annual conference held in the US) holds that a separate financial stability policymaker – with an independent set of tools – should be responsible for financial stability, allowing monetary policy to focus on price stability[16]. In my view, this approach works well because although monetary policy and financial stability interact in complex ways, they are in the end complementary. This means there typically aren’t  Page 5  major trade-offs between the two – both policymakers will be pushing in the same direction. I think this is borne out by our practical experience. If the case for a single committee is not that strong given potential trade-offs typically involved, there are two practical reasons why it is desirable to have two separate committees: accountability and expertise. With independence comes a need to ensure that bodies like the MPC and FPC are held accountable for their performance. This is much easier when their objectives are clearly defined. Two separate committees makes this easier.

Tightening monetary policy after a long period of very low rates has the potential to reveal further financial vulnerabilities. We need to consider how declining asset and collateral values flow through the system, including potential risks that may arise as leverage is unwound. But having built up resilience in the system ahead of time should prove a smart investment. Reforms since the GFC mean that the core of the financial system, especially banks, is much safer. And so far banks and insurers have shown themselves to be resilient, notwithstanding the sharp increase in interest rates. The same can be said of households and businesses. Rising rates will affect house prices, but the FPC has helped to limit risks from household debt through our mortgage market tools. And by stress testing banks against major increases in corporate defaults we have reduced the risk of the banking system amplifying distress in the corporate sector. In fact we have been including ‘rates up’ scenarios in our stress tests for many years, giving us a forward-looking view of the system’s resilience to increases in interest rates and so the ability to build extra resilience in advance of higher rates materialising. All of this means that while the FPC stays on the case for financial stability, the MPC can get on with its job of ensuring monetary stability. Of course the LDI episode highlights the need for vigilance. This is particularly true for marketbased finance – financial institutions outside the banking system.
For instance, for a regional cross-border banking group, I imagine the supervisory team to be based in the relevant region, perhaps in the same premises as the national supervisor, and to consist of staff from that region. As for crisis resolution, one could think of the EU building up a deposit insurance fund for the largest cross-border banks, possibly within the framework of the new European supervisory agency, akin to the Federal Deposit Insurance Corporation in the USA. This would considerably reduce the risk of destructive negotiation games. Such a deposit insurance fund would certainly be better diversified than the national funds are today, which would, all else being equal, enable it to charge lower fees or hold a larger risk-adjusted buffer. However, the fund itself would lack the ability to handle the largest banking failures. In order to cope in the event of a really large bank or several large banks failing, the fund should be able to borrow in the capital market. To be able do this in a cost-efficient manner, it would need backing by a government guarantee from the 25 member states. In the event that the European deposit insurance fund is not able to recover enough money from a troubled bank to repay its creditors in the capital markets, a key for burden sharing would need to be in place. One could establish a system of committed payment obligations, where the fund has the right to receive contributions according to the agreed key to pay back its capital market loans.

Personally, I believe that crisis management simulation exercises involving supervisors, central banks and finance ministries in all EU countries would provide valuable ideas on how to develop and improve cooperation and coordination of financial crises. On top of the obvious need for coordination of information and decision-making, there is as I just mentioned – and I will elaborate more on this shortly – also the additional element of conflicting interests that may be an even more serious impediment to efficient crisis management. In order not to waste valuable time in an emergency, you need to have ways to settle them as efficiently as possible already in place. In my opinion, specifically ex ante arrangements for burden sharing between countries are needed. Managing conflicts of interests Conflicts of interests can become apparent in many ways, for example, if a cross-border bank becomes insolvent and incurs social costs that somehow need to be shared between the countries involved. The problem of burden sharing becomes particularly precarious when, for example, the bank is significant to the banking system in some country but not in some other countries, or if there are great discrepancies between the ratio of the bank’s size to the GDP of the different countries involved. 4  BIS Review 39/2006  The social costs that may call for some burden sharing can take many forms.
We do not concentrate on inflation to the exclusion  BIS Review 93/2006  1  of all else; we also give consideration to real economic and financial developments. We conduct what is known as flexible inflation targeting. It is made fairly clear in the preparatory works to the Sveriges Riksbank Act that the idea is that we shall also give consideration to developments in the real economy as long as the inflation target is not threatened. A long-term perspective I will now move on to talk about the development of the Swedish economy in a long-term perspective. Let me begin by observing that I personally consider monetary policy to have been very successful since the crisis at the beginning of the 1990s. There is a substantial difference between the economic developments over the past 14 years and during the decades prior to this period. Sweden had an inflation rate much higher than that in Germany every year of the 1980s (see Figure 1). The 1980s began with two devaluations of 10 per cent and 16 per cent. For a devaluation to be successful, inflation must be kept down afterwards so the country does not lose competitiveness again. However, this was not successful in the 1980s. After the devaluations, Sweden’s competitiveness declined by around 30 per cent up to the crisis breaking out in 1992 (see Figure 2).

The way we at the Riksbank conduct our monetary policy is described in the brochure “Monetary policy in Sweden”, which was published in May this year and is available on our website. I shall here reproduce the main features of the brochure and provide some comments of my own. The target for monetary policy is to maintain a low and stable level of inflation. The assignment we have been given by Parliament is to “maintain price stability”. The Riksbank has specified an inflation target whereby the annual change in the consumer price index (CPI) is to be 2 per cent with a tolerance interval of plus/minus 1 percentage point. The target for monetary policy is thus formulated in terms of CPI. However, when we analyse the development of inflation, we look at several different measures. Underlying inflation measured as UND1X is one such measure. This excludes household mortgage interest expenditure and the direct effects of taxes and subsidies. The former is particularly important, as an increase in the policy rate pushes up the CPI. It then looks as though inflation increases when we raise the policy rate, despite the fact that this measure will in the long-term dampen inflation. There is no such problem with UND1X. However, we also look at other measures. For the purpose of more clearly explaining the analysis, it may sometimes be necessary to disregard energy prices, or to divide inflation up into price developments on imported and domestically-produced goods. The effect of monetary policy on inflation has a considerable time lag.
In one of them, described as the  35  R. Husmann, F. Sturzenegger “Global imbalances or bad accounting? The missing dark matter in the wealth of nations”, Harvard University working paper, December 2005. 36  Examples of such estimations can be found in: S. Edwards “Is the U.S. Current Account Deficit Sustainable? And if not, How Costly Is Adjustment Likely to Be?”, NBER working paper 11541, 2005; Orderly or Disorderly Rebalancing?”, New York University Working Paper; M. Obstfeld, K. Rogoff “The Unsustainable US Current Account Deficit Position Revisited”, prepared for 12-13 July 2004 NBER conference on G-7 Current Account Imbalances: Sustainability and Adjustment; H. Faruqee et al. “Smooth Landing or Crash? Model Based Scenarios of Global Current Account Rebalancing”, NBER Working Paper 11583; O. Blanchard et al. „The U.S. Current Account and the Dollar”, NBER Working Paper 11137 and many others. 37  Roubini N. “Why Central Banks Should Burst Bubbles”, mimeo, Stern School of Business and Roubini Global Economics, January 2006. 38 Posen A. “Why Central Banks Should Not Burst Bubbles”, Institute for International Economics, Working Paper WP 06-1, January 2006. 39 Kohn D. “Remarks by Donald Kohn at Monetary Policy: A Journey from Theory to Practice, An ECB Colloquium held in honor of Otmar Issing”, 16 March, 2006. 14  BIS Review 60/2006  conventional monetary policy, the central bank focuses on stabilising the inflation, treats changes in asset prices as an exogenous process, and does not attempt to influence asset prices whatsoever.

Monetary policy: achievements and review? Már Guðmundsson, Governor of the Central Bank of Iceland. Monetary policy meeting of the Iceland Chamber of Commerce, held at Harpa in Reykjavík on 17 November 2016  Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long-standing tradition of holding a meeting like this one on economic developments and prospects and monetary policy. The meeting is held following the publication of the Central Bank’s autumn forecast and, in latter years, the Monetary Policy Committee’s interest rate decision. In recent years, it has been the practice to select a particular topic for the meeting, and in keeping with this, today’s topic is: Is independent monetary policy too costly? This departs somewhat from the contents of the Central Bank’s Monetary Bulletin and current tasks of monetary policy, but I will touch on these towards the end of my speech today. Yesterday the Bank published Monetary Bulletin 2016/4, which contained the Bank’s new macroeconomic forecast, and announced the Monetary Policy Committee’s interest rate decision. The big picture of the current state of the economy is that things have seldom been better. Icelanders have received a significant boost from improved terms of trade and growing goods and services exports, particularly due to strong growth in the tourism sector. It is this that underlies the vast increase in Icelanders’ real income and the country’s high employment level. In addition, Icelanders have proven more cautious this time than often before during an economic boom.
In other words it’s a matter of supply not demand. Chart 6 gives a stylised description. In a competitive market the demand curve facing an individual firm (and those in a relatively small country) is essentially flat. Domestic events don’t have much effect on the global price. When the currency falls, pushing up prices and profits of outward-facing firms, the response of export volumes depends on the slope of the supply curve: to what extent do firms in the tradable sector have the capacity to raise output and, where that is insufficient, the willingness to invest in more? Chart 6: For a small open economy tradable demand is highly elastic  Chart 7: Depreciations push up the sterling price of goods exports as well as those of imports  Source: ONS and Thomson Reuters Datastream. * excluding oil and erratics. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Now commodities may be an extreme case. They’re essentially homogenous – one country’s output is much like another’s. But even in non-commodity goods markets you find a similar pattern. The UK is relatively small, accounting for only 3% of international goods trade (even including oil). Many UK firms are to a significant extent “price takers” in international markets. And you can see from Chart 7 the close correlation between the sterling price of the UK’s (non-oil) goods exports and the exchange rate. The reaction is a bit less than one-for-one but in general no less marked than that of import prices.

From the formal standpoint, the draft bill will consolidate in a kind of “Bank Code” all the regulatory provisions on the creation, activity and control of credit institutions, thus putting an end to the dispersion of legislation which has characterised the credit sector for various decades. Furthermore, the aforementioned consolidation aims to write into Spanish law the changes introduced in June 2013 by the so-called CRD-IV package, i.e. the Directive and the Regulation which incorporate the Basel III Accord into European legislation. As you know, that transposition has been partly handled by the promulgation of Royal Decree-Law 14/2013, which includes those matters considered essential for incorporation before 1 January 2014. Under the draft bill, and without prejudice to the framework resulting from the entry into force of the Single Supervisory Mechanism, the Banco de España will retain its current power to authorise the exercise of banking activities. Moreover, it will receive additional powers, such as that to revoke banking licences. Regarding the regime governing the purchase of qualifying holdings in credit institutions, the Banco de España will continue to be the authority responsible for assessing the proposals of potential purchasers, although now there are plans to give it powers of supervisory intervention, senior officer replacement, suspension of voting rights or, in extreme situations, licence revocation. As bank supervisor, the Banco de España will continue overseeing compliance with organisational and disciplinary regulations.
Figure 3  Mining exports  (percentage) 50  0,7  Billions of USD FOB  0,5  30  0,4  20  0,3 0,2  10 0  % Goods exports  0,6  40  0,1 0  1984  1987  1990  Mining exports  1993  1996  1999  2002  2005  2008  Mining Exports/ Goods exports  Source: Central Bank of Chile. 6  BIS Review 106/2009  Figure 4  Earnings from nitrates-iodine and from copper  (percentage of total fiscal income) 70% 60% 50% 40% 30% 20% 10% 0% t  t+6  1880  t+11  t+16  t+21  t+26  t+31  Nitrates and iodine earnings  1959  t+36  t+41  Copper earnings  t+46  T 1930 2008  Sources: Jeftánovic, Jofré, and Lüders (2000); Central Bank of Chile. Figure 5  Government spending, exports and GDP  (index, 1880=100) 500  1,200  400  1,000 800  300  600  200  400  100  200  0  0  1880  1890 1900 Government spending Exports  1910  1920  1930 GDP  1940  Source: Braun, Braun, Briones, and Díaz (2000).

Additionnally, let me recall recent trends towards mergers or close co-operation between stock exchanges, securities settlement systems and clearing houses, and so forth. Had the euro not been created, would it have been thinkable that the Paris, Brussels and Amsterdam exchanges would merge, creating EURONEXT? It is evident that the introduction of the euro is fostering very large-scale market restructuring throughout Europe. The total stock market capitalisation of euro-area equity markets stood at more than 5.5 trillion euros at the end of 1999, compared with a market capitalisation of 3.6 trillion euros at the end of 1998. This figure reflects not only the increase in stock prices but also the powerful drive towards securitisation of private companies throughout Europe and, in particular, the take off of the “new markets” network. There are still some barriers to further integration of EU capital markets. In this regard, the Eurosystem has welcomed the objective of the European Council, meeting in Lisbon in March 2000, of accelerating completion of the internal market for financial services, and to set a tight timetable so that the Financial Services Action Plan is implemented by 2005. The Eurosystem also fully supports the initial policy conclusions of the Committee of the Wise Men on the integration of the EU securities markets, in the conviction that their implementation would contribute to an improved allocation of capital in the European economy and to developments in securities markets coherent with the needs of the single monetary policy. II.2.
The forecasts for inflation and unemployment are calculated under an assumption  11  At the monetary policy meeting in September 2010 I criticised “the revisionist argument”, that is that monetary policy is governed by revisions of the assessment of the state of the economy. This implies that the previous monetary policy decision and the previous repo-rate path have been accepted without criticism and that the repo-rate path has then been shifted upward or downward depending on whether the development of the economy and inflation have been above or below expectations. No monetary policy decision is perfect. Each decision includes greater or smaller errors. Allowing revisions to govern means allowing new errors to be added to the existing ones. In my view, the previous repo-rate path should not be unreservedly taken as the starting point. Every monetary policy decision should stand on its own two feet and not lean on the previous decision. BIS central bankers’ speeches  7  that we believe to be more realistic and more compatible with how the exchange rate is determined. This assumption is that foreign exchange rates will develop in line with prevailing market rates (more specifically in line with the paths indicated by foreign implied forward rates). We can see in panel b that the lower repo-rate path leads to a better stabilisation of both inflation and unemployment. The mean squared gaps in Figures 7 and 8 are calculated assuming a sustainable rate of unemployment of 5.5 per cent.

Mark Carney: Writing the path back to target Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the University of Sheffield Advanced Manufacturing Research Centre, Sheffield, 12 March 2015. *  *  *  Accompanying charts can be found at the end of the speech. It is a great pleasure to be in the City of Steel to honour both its historic role in forging the industrial foundations of modern Britain and its current leadership in promoting advanced manufacturing for the post-industrial age. This city has been at the very forefront of innovation for hundreds of years. In the 18th Century Sheffield revolutionalised steelmaking with the discovery of the crucible steel process. By the mid-19th Century the city represented almost half of Europe’s total steel output. Since then, Sheffield has remained fleet of foot through hard work and innovation. The University of Sheffield’s Advanced Manufacturing Research Centre is a prime example of that spirit. No one knows better than you that manufacturing needs to become ever-more productive to prosper in a world of steadily falling prices and relentless international competition. Prices for advanced manufactured goods fell on average by around 1 per cent a year during the decade prior to the crisis.