samchain/econo-pairs-v1 huggingface dataset:
At the Bank of England we do still consider that the stability of the financial system depends crucially on the stability of the banking system. Banks are at the heart of the payments system, they are the principal source of funds for many businesses, and they are an important savings medium for a large part of the population. The regulatory framework in turn affects the behaviour of banks, making it essential to get it right. It needs to create both the right incentives, and establish the right level of buffer - in the form of capital - to protect the system. We fully support the Basel Committee’s objective of updating the 1988 Accord to make it more comprehensive and risk sensitive. And as a member of the Basel Committee, the Bank is working alongside the FSA to ensure that these objectives are delivered. Importance of risk sensitive capital charges I am aware that some commentators have questioned the aim of making the system reflect risk in a more differentiated way. One argument is that this will make capital charges procyclical, so that economic downturns or external shocks are amplified by the regulatory demand for higher capital. There is a concern that the consequences could be particularly severe in the case of lending to emerging markets, where rating changes have sometimes lagged the onset of crises. This is certainly a risk, and one which we have to take seriously. Clearly there could be macroeconomic implications, both domestically and internationally, possibly on a systemic scale.

For example, by identifying the common characteristics and residual risks underlying various types of credit risk mitigation techniques - collateral, guarantees, netting, and credit derivatives - it is hoped that a more uniform and consistent treatment can be applied to these instruments in place of the various, somewhat ad hoc, treatments that have grown up to date. There is perhaps one caveat that should be attached to the aim of introducing greater risk sensitivity. This is that it often entails much greater reliance on the judgement and competence of the supervisors. This can be seen in the evolution of the Basel Accord to encompass banks’ internal market risk models, if approved by supervisors, and in the new proposals to allow some banks’ internal ratings to be used for credit risk capital. It is also evident in the emphasis on individual supervisory judgement in Pillar 2 of the consultative paper. We believe this is the right direction to follow in the case of G10 banks and supervisors. It is, however, more questionable whether such a system is easily exportable outside the G10, in particular to some emerging markets. Indeed, even amongst the G10, some supervisors (such as the US) are actively contemplating drawing a two or more tier distinction in the capital rules applied to banks, depending on the level of complexity of the organisation.
The linking pin is membership in both policy boards by central bank’s senior management, which makes it possible for information and knowledge in one area to be usefully employed in performing the other, without compromising the mandate of each policy board. For example, detailed supervisory information about banks’ changing risk appetite and exposure to different economic sectors and markets – as well as how these risks are being managed – can provide useful early warnings about the health of the economy and potential systemic problems down the road. This can be a very important input for monetary policy board. On the other hand, central bank’s oversight of monetary policy and economic stability can strengthen and provide context to its supervisory responsibilities, for example, in identifying potential macro factors that may affect the health of financial institutions. Decisions about the stance and timing of prudential and supervisory policies in general can  BIS Review 32/2009  1  also be more appropriately made with the full knowledge of macroeconomic conditions and monetary policy. As can be seen, the two policies are essential to each other and hence it is useful or even desirable, in my opinion, for central banks to supervise at least the core financial sector, whether under a separate or integrated supervision model. This is most evident in times of systemic crisis where central banks’ last-resort lending is likely to be called upon and prompt decision is vital.

Expected inflation Per cent 4  4 5 years ahead 2 years ahead 1 year ahead  3  3  2  2  1  1  0  0 96  00  04  08  12  Note. Average for all survey respondents. Source: TNS SIFO Prospera  6  BIS central bankers’ speeches  Resource utilisation remains lower than normal Resource utilisation has been lower than normal for in principle the entire period since the end of 2008, when demand for Swedish exports fell heavily in connection with the global financial crisis. At the same time, developments on the labour market have been better than expected in some aspects. Although unemployment has remained around 8 per cent since the middle of 2012, employment has increased and the employment rate has risen around half a percentage point since then. One question that sometimes arises is whether it is actually possible to bring down the current unemployment rate of 8 per cent with the aid of monetary policy. Matching on the labour market appears to have deteriorated and a larger percentage of the unemployed consist of groups that are on the periphery of the labour market. This could mean that structural unemployment is higher than before, and structural unemployment cannot be affected by monetary policy. However, my impression is that one can at least partly determine how much of unemployment is structural by looking at wage increases.
Figure 7 CPI inflation (*) (annual change, percent)  CPIEFE inflation (*) (annual change, percent)  10  10  10  10  8  8  8  8  6  6  6  6  4  4  4  4  2  2  2  2  0  0  0  0  -2  -2  -2  -2  -4  -4  -4  -4  07 08 09 10 11 12 13 14 15 16  07 08 09 10 11 12 13 14 15 16  IPoM Mar.2014 Mar.2014 MP Report  Jun.2014 MP Report IPoM Jun.2014  (*) Gray area, as from the second quarter of 2014, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).

In the United States growth was so rapid that at least two authors wrote books entitled “The Roaring Nineties” and another chose the title “The Fabulous Decade”. In contrast, continental Europe experienced slow growth and heart-searching over structural reforms. As with much else, our economic performance lay somewhere between the excited exuberance of the United States and the relative disappointment of continental Europe. So the UK experienced a non-inflationary consistently expansionary - or “nice” - decade; a decade in which growth was a little above trend, unemployment fell steadily, and, supported by the improved terms of  BIS Review 45/2003  1  trade, real take-home pay rose without adding to employers’ costs, thus allowing consumption to grow at above trend rates without putting upward pressure on inflation. Will the next ten years be as nice? That is unlikely. The terms of trade will probably not rise as much in future as they have in recent years - about 10% since 1996 when sterling started to appreciate - not least because sterling’s effective exchange rate has fallen by around 7% since the turn of the year. Moreover, there is no longer the margin of spare capacity that has provided a buffer for policy over much of the past decade. So when shocks, as they will, hit our economy it is almost inevitable that there will be somewhat greater volatility of both output and inflation than the remarkable stability to which we have become used in recent years.
  Submit to the Governing Council proposals in respect of which the latter has the power of decision or approval.   Perform tasks expressly delegated to it by the Governing Council.   Submit to credit institutions, and all other supervised institutions, specific requirements and recommendations and resolve to initiate penalty proceedings against such institutions and their governing and management bodies and to adopt control measures, replace directors and take any other precautionary measures entrusted to the Banco de España by law. The Executive Commission shall promptly inform the Governing Council of any such precautionary measures adopted in exercise of these powers.   Manage the Banco de España in the field of private law and avail of its assets.   Adopt resolutions on all other operations or transactions required to be performed by the Banco de España to carry out its functions, delegating to the commissions or persons it may deem appropriate.   Approve the Banco de España’s organisation chart and submit that approval to the Governing Council for purposes of information.   Authorise the creation, composition, form of operation, modification or dissolution of commissions or committees.   Submit to the Governing Council proposed penalties the adoption of which falls within the powers of the Banco de España.

This would have a positive impact on the prestige of our institution, on the trust we inspire in society and on the performance of our functions. In addition, making the Banco de España’s senior management selection process more visible should contribute to fulfilling the legal requirements whereby the Governor and the Deputy Governor must have “recognised competence in monetary or banking matters” and the Council Members “recognised competence in economics or law”. Participation of the legislature in the Banco de España’s senior management selection processes would be consistent with the procedures followed by the European Parliament to appoint the ECB’s senior management, with the opinion of the Parliament now being binding in the case of the Chair and Vice-Chair of the Supervisory Board. In addition, although it is not the predominant model in the main European countries, the parliaments of some countries, such as Finland, Slovakia, Latvia and Lithuania, play an important role in the appointment of their central bank governors. Beyond Europe, in the United States the appointment of the Chair of the Federal Reserve has to be confirmed by the Senate. Although not usual practice, some countries have also introduced certain transparency standards in the procedure for pre-selecting candidates. The Bank of England is one of the most striking examples, as there is an open pre-selection process for appointment of the Governor and Deputy Governors.
Faced with a world that is changing faster than any of us could have imagined, we need to be both focused on our goal and robust in our strategy to achieve it. 1. Lagarde, C. (2022), “Monetary policy in a high inflation environment: commitment and clarity”, lecture organised by Eesti Pank and dedicated to Professor Ragnar Nurkse, Tallinn, 4 November. 2. This is visible, for example, if one compares the persistent and common component of inflation (PCCI) and the PCCI excluding energy. The former has been declining strongly since the summer of last year, whereas the PCCI excluding energy has only stabilised. 3. For an explanation on different measures of underlying inflation, see Ehrmann, M., Ferrucci, G., Lenza, M. and O’Brien, D. (2018), “Measures of underlying inflation for the euro area”, Economic Bulletin, Issue 4, ECB and ECB (2021), “Inflation measurement and its assessment in the ECB’s monetary policy strategy review” Occasional Paper Series, No 265, September. 4. Germany, France, Italy, Spain, the Netherlands, Austria and Greece. 5. Defined as those items in the core inflation basket for which wages account for more than 40% of input costs. 6. According to the labour force survey, the labour force has increased by 2.2 million since the start of last year and remains well above pre-pandemic levels, due to the rising participation of foreign workers (+1.3 million), women and older workers. 7. Employment growth in the public sector has accounted for about half of total employment growth since the end of 2019. 8.

Dear Guests, In my speech, after a brief review of the global policy response to the pandemic, I will give information about the measures taken in Turkey and the pandemic-era outlook for the country. The period of normalization, which I will talk about later, is marked by the inflation outlook. In this period, central banks have undertaken the difficult task of controlling inflation without harming economic recovery after having suffered severe costs in terms of growth and employment. In the last part of my speech, I will touch on the risks that remain due to the latest state and course of the pandemic. The rapid spread of the coronavirus around the world caused a significant slowdown in global trade and economic activity. Due to lockdown measures, unlike the 2008 crisis, we saw a more devastating supply shock, and thus, it is safe to say that COVID-19 has been economically more costly. The rapid global spread of COVID-19 affected economies through various channels, causing a sharp contraction in global economic activity. The pandemic first hit the global supply chain and production. Then, mounting uncertainties,  3  tighter financial conditions, household income losses and worsened cash flows of businesses caused demand to weaken substantially. Lockdown measures around the world caused services activity to decline rapidly in March 2020. In the following period, the slowdown also spread to the manufacturing industry as global trade contracted. Both advanced and emerging economies saw a negative decoupling of the services sector due to pandemic measures.
CPI and Growth Index: 1970=100 Growth 1997-1998 OECD forecast Germany Netherl ands  210 190  210 190 170  170  Austria 150  150  Sweden  130  130  110  110  90  90 70 72  74 76 78 80 82 84 86 88  650  90 92 94 96 98  Sweden  550  550 450 350  450  Netherl ands Austria  350 250  250 150  650  Germany  150 50  50 70 72 74 76 78 80 82 84 86 88 90 92 94 96  Sources: Statisti cs Sweden and OECD The problems are amplified by a regime of taxes and subsidies that are wholly or partly indexed. Groups that have full indexing are favoured at the expense of others who do not receive subsidies or do not get full compensation. Also the economic costs may rise when the BIS Review 14/1998  -3-  behaviour of businesses and households is negatively affected by taxes and subsidies in combination with a high rate of inflation. Many good examples of this can be found in the Sweden of the 1970s and 1980s. The American economist Martin Feldstein has estimated that if inflation increases from 0 to 2 per cent, then the economic costs in the United States will amount to the equivalent of 1 per cent of GDP, principally as a consequence of the disruption caused by the interaction between the tax regime and inflation.

Mr. Heikensten answers eight questions on monetary policy in Sweden Speech by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, at The Economics Association in Umeå on 19/2/98. Introduction During the 1990s monetary policy has been the subject of intensive discussion. This is not surprising, given the serious crisis in the Swedish economy at the beginning of the decade and the role that monetary policy played both then and as the crisis was building up. Since that time, monetary policy has had an explicit role to safeguard independently the value of money – a role that is new in Sweden in the post-war period. With a floating exchange rate, the decisions currently made by the Riksbank on its instrumental rate are very real and important to the behaviour of households and businesses and to economic growth. The monetary policy discussion has evolved over time. Questions and statements about monetary policy’s basic objective of price stability that were very frequent a couple of years ago are less so today. Understanding of the Riksbank’s actions seems to have increased. We are presently trying to evaluate this by asking the public how it views the Riksbank’s work and by following the media and newsletters written by the market’s players. It is also possible to form an opinion based on the market’s reactions to changes in the instrumental rates as to whether the policy is understandable.
More than this, I could say that based on diversity and stability, this constituency has gradually emerged, as one supporting the interests of small open economies such as our countries. And today, with Belgium and Luxembourg joining, we are one of the largest and diverse constituencies among European chairs, with a substantially higher voting weight and a voice to play an even stronger role in the IMF Board in the future. Not only do we count nearly a quarter of all the EU members, but we have among us countries with broad experience in the world of finance. I wish to remind you that the first Managing Director of the International Monetary Fund was Camille Gutt, the distinguished Belgian economist. The fifth Managing Director, Johannes Witteveen, was a Dutch national. The First Deputy Managing Director for a long period of time, during the last twenty years, was Stanley Fischer. The historical lesson that a country like Romania has learned for the past forty years as a member of the Dutch Constituency is the importance of continuity. Continuity has given us the feeling of belonging to a great family which is caring and providing for its members. For many of us, former communist countries, being part of this constituency has offered a unique opportunity to benefit from the expertise of Western specialists, in the great effort of institutional development. An example is the Romanian central bank in the early ‘90s.

Mugur Isărescu: Establishment of a new 15-county IMF-WB Constituency that already includes Romania Speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the establishment of a new IMF-WB Constituency that includes Romania, at the Annual Meeting of the International Monetary Fund and the World Bank Group, Tokyo, 12 October 2012. *  *  *  Your Excellences, Ministers, Governors, Ladies and Gentlemen, I am honored to have the opportunity to address you all on this special occasion and to welcome our new partners from Belgium and Luxembourg. This moment, when the establishment of a new, 15-country constituency, is formally announced, has several historical meanings, already presented by Minister de Jager. Let me add something from the experience of my country. Romania joined the International Monetary Fund and the World Bank in 1972 and has been a member of the Dutch Constituency ever since. It is worth mentioning that this Constituency had only five members in those days: The Netherlands, Israel, Cyprus, Yugoslavia and Romania. After 1990, I saw how, in a few years, the memberships grew to 13 countries. Despite this rapid enlargement with such diverse configuration and the huge transformation happening in all the countries in the last two decades, our Constituency has remained remarkably stable and has operated well. This is why I share the views of Minister de Jager that we have been able to find strength in our diversity.
First, looking back over the past three years, the big picture is that inflation has stayed surprisingly low, and output growth remarkably stable, given the scale of these cost increases. Inflation has never deviated by more than 1 percentage point from the 2 per cent target. But second, judging by the media and public reaction to the rise in inflation over the past few months, it is clear that even a small deviation in inflation from target can now look very significant after the stability of the past decade. This illustrates both the helpful and unhelpful legacy of a decade of remarkable stability for the UK economy. On the helpful side, there is no doubt that a highly credible monetary policy framework has helped to contain inflation, in the face of a very large cost shock. The UK has become a low inflation economy since the 1970s and people expect the MPC to keep it that way. That affects the way they behave when they take decisions about wages and prices. The less helpful legacy is that even a small movement in inflation away from target – one percentage point – has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run. How does this less helpful legacy affect the policy debate?

The third challenge is that of re-establishing confidence abroad in Iceland’s institutional framework, economy, and financial system; repairing the relationship with the international financial market; and ensuring that the Icelandic Government and Icelandic companies have access to foreign credit markets once again. I will touch on these three tasks later, but first I would like to shed some light on where we are in the adjustment period I mentioned earlier, and what the immediate future could have in store. First, the contraction in GDP to date has been less pronounced than was forecast early in 2009. The same can be said of unemployment. On the other hand, the króna depreciated more than expected, and inflation has proven more persistent. The Central Bank’s January forecast assumed that GDP would contract by 10% between 2008 and 2009, while the most recent figures indicate a contraction of 6½%. On average, the króna was some 15% weaker than was forecast at the beginning of the year. For this reason, among others, inflation was higher than projected, or just over 6% in the first quarter of 2010,  BIS Review 39/2010  1  excluding tax effects. The January 2009 forecast assumed that we would already have attained the 2½% inflation target by now. These deviations stem from a variety of sources other than normal forecasting errors. First of all, measures have been taken to support households, and these measures have reduced the contraction in private consumption.
ULC, labour costs and productivity in manufacturing 12 10 8 6 4 2 0 -2 -4 -6 -8 -10  ULC  1995  Labour cost per hour  1997  12 10 8 6 4 2 0 -2 -4 -6 -8 -10  Labour productivity  1999  2001  2003  Note. Annual percentage changes. Source: National Institute of Economic Research. 7. SEK/TCW, UNDIMPX xe and imported consumer goods 20  UNDIM PX xe  20  15  TCW  15  Imported consumer goods  10  10  5  5  0  0  -5  -5  -10  -10  -15  -15 95  96  97  98  99  00  01  02  03  04  05  Note. 12-month changes in per cent. Source: Statistics Sweden and the Riksbank  10  BIS Review 25/2005  8. Unit labour costs 6  6  4  4  2  2  0  0  -2  -2 Transport etc  Trade  -4  -4 1995  1997  1999  2001  2003  Note. Annual percentage changes. Source: National Institute of Economic Research. 9.

For a number of years the confidence in monetary policy and economic policy in general has been high enough to allow such factors to be taken into account. But at the same time it places demands on our communication – that we are clear, for example, about when there is reason to extend the forecast horizon and why. It is also one of the reasons that we introduced some improvements to our decision-making material in our most recent Inflation Report, which we expect will help us explain and justify our actions more clearly. These included extending our forecast horizon somewhat in certain situations. So we do have room for a considerable measure of flexibility. And we have also made use of that over the years. On several occasions, e.g. 2001 and 2003 but also earlier, we made it clear that we had disregarded transitory effects that were affecting inflation. The Riksbank has also referred to developments in asset prices, e.g. in 2000, but we did not believe at the time that it gave reason to allow policy to be affected to any great extent. Recently, however, developments in property prices have had some, albeit limited, significance for our monetary policy decisions. The inflation target is thus our point of departure, and we normally apply a time horizon that reflects the lag with which monetary policy has an impact on inflation. But we are prepared to depart from this if we have good reason to. Our ambition in such cases is to communicate the reasons clearly.