samchain/econo-pairs-v1 huggingface dataset:
6 [21]  Part of the explanation might be that there has been a relatively large discrepancy in Sweden between, on the one hand, the policy required to maintain confidence in the inflation target and, on the other, the policy that would have been justified by developments in the economy otherwise. If the Riksbank had not needed to take confidence in the inflation target into consideration, but only the developments in the real economy with a positive output gap and a strong employment trend, the policy would most probably have been less expansionary. Certainly, other central banks too have kept policy rates negative for a long time, including the European Central Bank. This has caused some criticism in certain euro countries, but the expansionary policy has been motivated not only by low inflation but also by relatively weak developments in the real economy in the euro area as a whole. Effects on the housing market and the exchange rate stumbling blocks A few different things have bubbled up to the surface in the Swedish debate but there have been two main themes, as I see it. One is connected to what I was just talking about, that is that the Riksbank, about five years ago, had to choose between continuing to “lean against the wind” and maintaining confidence in the inflation target. The more expansionary policy that the Riksbank then began to conduct of course did not make things easier, but instead stimulated the increase in debt and housing prices further.

Furthermore, the general liberalisation of capital controls on domestic residents will take place once the largest obstacles have been successfully removed or neutralised and when certain economic criteria have been fulfilled, such as adequate FX reserves, market access for the sovereign and the banks, a wellbalanced and growing economy, etc. The aim is to minimise the risk of capital flight. 2  BIS central bankers’ speeches  The Icelandic authorities have emphasised public disclosure and transparency of relevant information about the liberalisation strategy. Last year, the solution to the failed banks’ estates, as well as the economic analysis on which it was based, was presented in a comprehensive manner. A few days ago, a bill of legislation on the treatment of offshore krónur was passed by Parliament. An English translation of the bill was posted on the website of the Ministry of Finance and Economic Affairs, along with the Explanatory Notes and a Q&A (with links on the Central Bank website). Yesterday the Central Bank published terms of a foreign currency auction directed at offshore krónur, to be held on 16 June. This speech is, of course, part of the process of disclosure and explanation. Furthermore, in a week or two, the Central Bank will issue a special publication on the economic analysis of capital account liberalisation in Iceland.
But given the very high degree of uncertainty, there is little that the MPC can do to deal with this risk ahead of crystallisation. While UK output growth has come in much in line with our expectations, the same cannot be said of our primary objective, inflation. Back in August of last year, our central projection was for CPI inflation to be around 1.5% now. But inflation has been markedly stronger than that – 3.2% on the latest reading. Why has inflation been so much higher, especially given that our expectations for growth have largely been fulfilled? There are three factors that account for this. 3 First, energy and non-oil commodity prices are substantially higher than in the summer of 2009. By convention, we base our forecasts for these variables on futures prices, which were relatively flat at that time. The buoyancy of commodity prices since then reflects the rebound in global activity, and especially the strength in the emerging economies. In addition, temporary supply factors have boosted the prices of some agricultural commodities. At present there appears to be a margin of spare capacity in the oil market, so that may permit global growth to remain strong without putting further upward pressure on energy prices immediately. But a low elasticity of supply of other commodities means that their prices, relative to those of finished goods and services, may continue to drift upwards. That would constitute an additional headwind for the United Kingdom.

Caleb M Fundanga: Foreign private investment in Zambia Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Closing and Dissemination Workshop on Foreign Private Investment and Investor Perceptions Survey, Lusaka, 20 January 2011. *  *  *  The Deputy Secretary to the Cabinet, Mr Evans Chibiliti; The Deputy permanent Secretary at the Ministry of Works and Supply, Mrs Bweupe Kaonga; The MEFMI Executive Director, Dr Elias Ngalande; The IMF Country Representative, Mr Perry Perone; Heads of Government Departments present; Chief Executive Officers of various Companies and Associations present Colleagues from Bank of Zambia; Distinguished Participants; Members of the Press; Ladies and Gentlemen. It is my honour and privilege to officiate at this very important Closing and Dissemination workshop of Phase III of the Survey on Foreign Private Investment and Investor Perceptions. As I welcome you all, I wish to convey my appreciation for your contributions to the success of this project. May I, in this regard, express our special appreciation to the private sector colleagues for their cooperation during the survey. Let me also take this opportunity to extend my sincere gratitude to the Private Sector Development (PSD) Programme, for providing financial support for this very important project. Further, our thanks go to the Macroeconomic and Financial Management Institute (MEFMI), and Development Finance International (DFI) for providing technical support to this survey.
House prices in Sweden and abroad Annual percentage change and index respectively, 2019-12 = 100  Note. Housing prices refer to the HOX Sweden price index for tenant-owned apartments and detached houses. Sources: EUROPACE, Lloyds Banking Group, Real Estate Norway, S&P Global and Valueguard. Phase 2b: Extended purchases with greater elements of broad economic stimulus The aim of the Riksbank's measures was thus to prevent problems on the financial markets from further exacerbating the country's economy in the middle of the pandemic, which was thus successful. On the other hand, the ambition was not to completely eliminate risk premiums in the financial markets, nor to contribute to rapidly increasing asset prices. It is therefore hardly controversial to note that the effects of the overall support measures were greater than intended. As I have already pointed out, developments in the housing market in particular were surprisingly strong. It was, of course, important for the housing market that the rise in risk premiums was interrupted so that credit provision was sustained and interest rates on household mortgage loans did not start to rise. The fact that the risk premiums for covered bonds in addition were lower than prior to the pandemic may have contributed to the rise in housing prices, but this was hardly the most important factor.

Their response to the cry of this time is different is to assert that “it almost never is.” Why, then, is it so hard to understand the true picture of financial crises? I think that the issue here lies clearly in the characteristics of banks. One of the conclusions of work on the history of financial crises is that they have worse outcomes when they involve banks. As an example, if you remember the stock market crash of 1987, which seemed very bad at the time, it did not threaten the banking system, and its effects were contained. It was not a major financial crisis in its own right. The reasons for this difference when banks are involved have to do with the nature of banks. At the heart of banking is a technical term called maturity transformation, or more simply, banks borrow at a shorter term and lend at a longer term in respect of the duration of their deposits and loans. This is the essence of banking. Banks transform savings that may be required by their owners at short notice into longer-term loans. This is a benefit to the economy and society because it allows longer-term borrowing by companies and by all of us to buy houses. But it makes banks inherently illiquid. If all depositors decided to ask for their money back at the same time the bank would struggle to pay-out and survive. This is because the bank will generally find it difficult to realise its assets in time.
Our goal was to portray a theme in a coherent and consistent overall context. However, as work progressed it became evident that it was going to be difficult to depict the thrust of the original overarching theme ‘Switzerland open to the world’ satisfactorily in a banknote series. This ran counter to our plan of designing banknotes that had a clear internal logic and were immediately recognisable as a series. The production delay bought us some time to consider the overarching theme of the new series, the selected illustrations and the messaging of the various motifs on the notes in greater depth. The result was a decision to change the overarching theme to ‘The many facets of  Page 2/4  Berne, 3 September 2019 Thomas Jordan  News conference on new banknotes  Switzerland’. Taking this as our inspiration allowed us to portray our country with all its facets very effectively and gave us more latitude for the design. In line with this thematic development, each denomination depicts a typically Swiss characteristic, which is then illustrated graphically using a key motif. The key motif appears in various forms in all the illustrations and security features on a given denomination, and ties the different sections of the note together. You can see from this image that the key motif of the 100-franc note is water.

From the recall date onwards, the old notes lose their status as legal tender and can then only be exchanged at the SNB or one of our agencies. The future of cash in the digital age I would like to finish by looking to the future. The digital transformation taking place in our economy is also affecting developments in the payments arena. As part of its statutory mandate, the SNB must not only ensure the supply and distribution of cash but also facilitate and secure the operation of cashless payment systems. A well-functioning payment system is critical for our economy. Technological progress is also changing customers’ expectations and needs in terms of cashless payments – for instance as regards speed and user-friendliness. In this area too, the SNB is a participant in innovation. Specifically, we are ensuring that Swiss Interbank Clearing (SIC) – our country’s powerful infrastructure for transacting cashless payments in Swiss francs – continues to work quickly and efficiently and thus remains as attractive as possible. Promoting and ensuring both the supply of cash and the smooth functioning of cashless payments is no contradiction. The various payment methods satisfy the differing needs of our population. Our latest survey on payment methods, published in May 2018, showed that the public’s use of – and affinity for – cash remains high. It also confirmed that the Swiss population like to be given the choice between paying cashless or paying with notes and coins. Banknote circulation in our country has increased steadily in recent years.
But, to take one example proposed by some, if a systemic stablecoin were required to be fully backed by deposits at the central bank, the implications for central bank balance sheets could be very similar to CBDC (Chart 4). This would also be the case if a ‘narrow bank’ chose to issue its own tokenised deposits and put all the proceeds into holdings at the central bank. Indeed, arguably any stablecoin with a credible link to fiat currency relies ultimately on settlement in central bank money. Of course, that does not mean that it is central bank money: even fully-backed, regulated stablecoins would remain the liabilities of private sector companies, and hence pose a range of risks not associated with CBDCs. 4  See Record of the Financial Policy Committee - 13 December 2019 (bankofengland.co.uk) and https://www.bankofengland.co.uk/financial-policy-summary-and-record/2022/march-2022 5 As proposed by the UK Treasury in O-S_Stablecoins_consultation_response.pdf (publishing.service.gov.uk). Bank of England  Page 7  3. Digital currencies may alter the transmission mechanism for monetary policy A key unknown in assessing the impact of digital currencies lies in judging the extent to which they may affect the flow, and pricing, of money and credit in the economy – which in turn has implications for the transmission mechanism for monetary policy. When a bank creates a new loan, it must retain or attract sufficient deposits to fund it.6 Digital currencies do not fund credit creation, but they do increase the competition for, and hence the cost of, deposits, with knock-on implications for the price and availability of credit.

Bank of England  Page 1  Old dogs, new tricks: adapting central bank balance sheets to a world of digital currencies − remarks by Andrew Hauser Given at Federal Reserve Bank of New York and Columbia SIPA Workshop on ‘Monetary Policy Implementation and Digital Innovation’, New York 01 June 2022  Bank of England  Page 2  Speech Introduction The explosion of interest in digital currencies poses deep and challenging policy questions on everything from monetary and financial stability, to privacy, competition, money laundering and social inclusion. Public authorities are evaluating the arguments for and against introducing their own Central Bank Digital Currencies (CBDCs).1 And in the private sector there’s a lively debate about what it might take to make so-called ‘stablecoins’ genuinely stable. Up to now, though, there’s been less discussion about how central bank balance sheets might need to adjust to support the safe and effective provision of fiat-based digital currencies. This workshop is therefore well timed. I will focus my remarks today around five main messages. 1. Retail CBDCs could be a big deal for central bank balance sheets Let’s start with retail CBDC – a central bank liability, in digital form, held directly by individuals, and used to make day to day payments. Many of the raw ingredients of a CBDC are already familiar to central banks: individuals can already hold our liabilities, in the form of physical banknotes; and we already provide digital liabilities, albeit to only a few depositors (predominantly banks).
Chart 12: Pay growth has tended to track unemployment, but with notable exceptions, including during 2014, and moderation recently 6  -2  Private sector regular pay (LHS, oya) Unemployment rate (RHS, inverted scale)  5  -3  Per cent  -5  3 -6  2  Per cent  -4  4  -7  Oct 15  Mar 15  Aug 14  Jan 14  Jun 13  Nov 12  Apr 12  Sep 11  Feb 11  Jul 10  Dec 09  May 09  Oct 08  Mar 08  Aug 07  Jan 07  Jun 06  Nov 05  Apr 05  Sep 04  Feb 04  Jul 03  Dec 02  -9 May 02  0 Oct 01  -8  Mar 01  1  Source: ONS and Bank calculations  It is possible that the rate of unemployment at which the economy can operate without generating accelerating inflation is lower than previously thought, meaning less pressure on wage growth at any given jobless rate. This could be, for example, because job matching has become easier with new technologies or with greater labour mobility afforded by a recovery in housing market liquidity. Equally, changes to unemployment insurance could have encouraged more intensive job search by those out of work. Set against that, analysis by Bank staff suggests a decline in matching efficiency in the past two decades, suggesting balanced risks to our assessment that merit continued monitoring.

Because wage setting is forward looking, expected future inflation enters as an explanatory variable. Finally, unemployment, relative to the natural rate of unemployment, enters as a measure of tightness in the labour market.25 Quarterly growth in AWE private sector regular pay (annualised) is used as an explanatory variable. Unfortunately, this is only available from January 2000, so observations of quarterly average pay growth begin in 2000 Q2. The last observation is 2015 Q3. Unemployment is measured by the quarterly average of the LFS unemployment rate. Inflation expectations are measured using general public inflation expectations measures taken from the Barclays Basix index. Variations on this simple specification are also estimated. First, annual spot inflation, lagged one quarter, is used to replace the inflation expectations. That is on account of the strong collinearity between survey measures of household inflation expectations and actual inflation outturns. Second, the Bank of England’s agents’ scores for recruitment difficulties are included as an additional gauge of labour market frictions, which could reflect the ease or otherwise of labour market matching, and which are not captured by contemporaneous measures of headline unemployment. Third, productivity growth (in heads) is included as an additional explanatory variable. Table A1 contains the estimation results. The model in column (1) of the table contains a very simple Wage Phillips Curve (WPC), relating pay to its lag and to unemployment. The WPC slope of around unity is highly statistically significant and the simple model explains around 40% of the variation in wage growth.
So I very much welcome your input to developing these ideas further and flesh out the framework over the coming months. Closing remarks At the outset of my remarks, I highlighted the banner headline indicating that we are “Heading into a New Era”. Having journeyed this far, is this statement a fair one? Given the opportunities I’ve outlined, I think the answer really should be “yes”. But if I’m cautious, I would have to say, “Yes, if”: if we can rise to the challenges touched on earlier; if we can capitalise on the great strengths and advantages of Hong Kong; if we can invest in our people and our institutions to match the scale of the opportunities. If we can do that, I believe we can truly make this a transformative moment in the development of the banking landscape in Hong Kong. The prize for your institutions, your clients and for Hong Kong is great. I look forward to continue working with you so, together, we attain it. Thank you. 6  BIS central bankers’ speeches

Early identification of difficulties is fundamental in this context. Banks must proactively identify those customers who, despite temporary difficulties, have a viable business, for whom debt restructuring may be an appropriate option. 7  For those cases of non-viability, it is clearly necessary to promote ways of ensuring an orderly exit from the market. It is vital that banks envisage sufficiently prudent scenarios in their capital projections and be conservative when setting aside impairment provisions. In this respect, I have already pointed out that the easing in the third quarter in provisioning by Spanish banks does not seem prudent in the current circumstances. Allow me to conclude. The exceptional situation caused by the pandemic continues to evolve and, thus, so do the public support measures and the focus of our activities as supervisors. Without a doubt, the development of an effective vaccine would contribute decisively to clearing the medium-term horizon, eliminating the most extreme economic scenarios, although the short-term remains beset by uncertainty. As long as this uncertainty persists, our responsibility is to remain prudent. Thank you very much. 8
The world economy continues to be marked by expectations about the Federal Reserve (Fed)’s decision on the trajectory of its monetary policy normalization, and by the risks coming from the Chinese authorities’ efforts to meet the country’s target growth rates. During most of the quarter, the markets’ assessment of these phenomena resulted in a loosening of financial conditions compared with the beginning of the year. Most recently, however, these trends have been partly reversed. Thus, our new baseline scenario assumes that our trading partners will post similar growth rates to those of 2015, but external lending conditions will be tighter and commodity prices will remain below their long-term levels. In this context, we have held the monetary policy rate (MPR) at 3.5 percent annually and we foresee that, within our forecast horizon, further increases will be necessary. Of course, this will be contingent on incoming information about the projected inflation dynamics. Thus, if new indicators point at higher expected inflation, monetary policy will need to be tightened, and vice-versa. In any case, we have maintained a significantly expansionary monetary stance, which will remain so in the scenario we believe to be the most likely. Let me share with you the workings of our baseline scenario and the main risks we perceive, which are depicted in the Reports I am presenting now. Macroeconomic scenario As I said before, in recent months both headline (CPI) and core (CPIEFE) inflation have behaved as expected.

BIS central bankers’ speeches  13  Figure 10 Nominal rates on 10-yr government bonds  Chile: Interest rates by type of loan (2)  (percent)  (index, 2006-2016=100)  18 15  Brazil  12 9  Colombia  6  14  175  175  15  150  150  12  125  9  100  15  125  Housing  100  Consumer  Perú Mexico Chile (1)  3  18  6  75  3  50  75 Commercial 06  16  08  10  12  14  50 16  (1) Considers Central Bank and Treasury bonds. (2) Weighted average rates of all operations performed each month. Sources: Central Bank of Chile and Bloomberg. Figure 11 Total debt of non-banking enterprises (*) (percent of GDP)  125  Domestic  125  External  100  100  75  75  50  50  25  25  0  09  10  11  12  13  14  15  16  0  (*) Based on firm-level information with the exceptions of factoring and leasing, securitized bonds and commercial papers. Preliminary estimate for March 2016. Source: Central Bank of Chile based on Achef, SBIF and SVS data.