samchain/econo-pairs-v1 huggingface dataset:
Perhaps I should add that we do have a rough idea of the level of the exchange rate that seems reasonable in the longer run. We have not intervened since the occasion during the financial turbulence in 1998 when the krona weakened in a way that both then and in retrospect seemed unreasonable. Assessments of the coming 1–2 years are crucial It takes time for monetary measures to affect inflation. Some effects of an interest rate adjustment may indeed occur very quickly. The stock market, for instance, is influenced as soon as an adjustment is announced and this can have immediate consequences for household consumption, for example, and thereby a quick impact on certain prices. Monetary policy can also elicit exchange rate movements and quickly affect prices for exports and imports. Normally, however, there is a time lag between monetary measures and their effects. For example, an interest rate hike leaves households with less money for other expenditure and also reduces the return on investments. By gradually influencing consumption and investment, this leads in time to changes in total demand. With weaker demand, firms then have more difficulty in raising prices and that leads to lower inflation. Interest rate adjustments accordingly affect inflation through a variety of channels that economists refer to as the transmission mechanism. We know more about some channels than we do about others. It is not clear just how long it takes for the effects to materialise.

This prediction did not materialise in full. During the second half of the year it seemed clear that there would be some lag between the depreciation and its effect on the price level. This prompts questions about the correlation between prices and exchange rate developments. The short-term relationship of these factors appears to have weakened, which is undoubtedly explained in part by market competition. A more flexible exchange rate policy is also unquestionably at work. In earlier times, when devaluations were made amid extensive announcements, the change was in general rapidly reflected in the price level, since it was fairly certain that it would be permanent. After the exchange rate was made more flexible, it can be assumed that uncertainty about the permanence of changes has led buyers and sellers of goods to take more short-term exchange rate risk than before,  2  BIS Review 27/2001  since high costs are involved in making frequent alterations to prices. However, it is imprudent to ignore the eventual impact of a depreciation on prices, since research offers no support for such a view. This is one of the assumptions on which the Bank bases its forecast from this February, where inflation is expected to run at 4.3% between 2000 and 2001 and 4.6% from the beginning to the end of the year. Next year it is forecast to slow down to 2.7% from the beginning to the end of the year.
The step from theory to practice is probably too great in this case, at least for now. The interest rate path An important part of the transparency concerns the central bank’s communication of its monetary policy intentions. So, how open and clear should a central bank be with regard to its own assessment of the future interest rate path? I would like to reply "as open and clear as possible”. And I believe that we at the Riksbank work in this way today. But the road to this standpoint has been very long and lined with various requirements and considerations. With regard to the assumption of the future interest rate, central banks use three different approaches. The first is that the policy rate will remain unchanged throughout the forecast period. According to the second approach, the policy rate is instead assumed to follow market expectations. The third approach means that the central bank works on the basis of its own forecast for the development of the policy rate. 4 5 The Riksbank has moved away from the first of the three approaches, via the second, to now publish and build its forecasts on the basis of our own view of what we consider to be a reasonable development in interest rates in the future. Why did we take this step and why did we not take it before this year? Well, the easiest answer is probably that “everything has its place”.

Denis Beau: Financial supervisory and coordination - new issues and challenges  regulatory  policy  Contribution to the panel discussion by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Salzburg Global Finance Forum, 22 June 2021. * * * Regulatory policy and Supervisory coordination has always been fraught with challenges. I remember panel discussions with market participants about this very topic at the BIS twenty years ago. No surprise for me that it is still a topic today, because there is a deeply rooted reason for it: the inevitable tension between market forces on the one hand, which push for a borderless financial system in many of its layers, despite step backwards, as we have seen since the Global financial crisis, and on the other hand the jurisdictions in which regulators and supervisors operate, are accountable and must discharge their obligations, which at best are regional for some and most often are national. This observation does not mean that we have not made progress in addressing this tension over the last decades. Nevertheless, I would differentiate between coordination issues to manage large-scale crisis and to prevent those crisis. Regarding the former, I think it is fair to say that the Covid-19 pandemic acted as a test of the resilience of our global coordination framework, which has improved with a strong G20 dimension after the GFC.
The purpose of this is that those who have lent money will be forced to a greater extent than they are now to bear the costs of solving a crisis, in order to encourage them to show greater caution when making investment decisions. However, it is also important that the organisations mentioned counteract corruption and work actively to achieve an open democratic culture in the new countries taking part in the globalisation process. The recent globalisation debate has focused on a completely different issue, namely injustices in the distribution of income around the world and many believe that these injustices would be reduced if financial operators were prevented from rapidly moving money to where it provides the highest return. Many people feel that multinational corporations all too casually move their production to the countries that can offer the lowest production costs and this has also come up for debate in Sweden, particularly when Swedish regions have been hard hit by factory closures. The problems mainly concern the trade exchange between rich and poor countries and direct investment by rich countries in poor countries. Swedish history can also provide an illustration here. It has been calculated that the Swedish productive capital stock was 50 per cent higher during 1870 and 1914, through the import of foreign capital, than it would have been without this capital import. Sweden's industrialisation was thereby speeded up and welfare increased.

We want to continue to work together with all of you here on this agenda. We look forward to hearing your ideas, suggestions and questions through the panel discussion coming up shortly, and in our networking session with our market intelligence teams later on today. We want to use 2/3  BIS central bankers' speeches  that as a starting point to build stronger links with a wider, more diverse group of colleagues, and also deepen those over time, as they progress through their careers. There is a very important further issue in all of this, which is sadly highly topical, namely to ask what is the antidote to the problem of lobbying? The answer is not to speak to no-one. That is not likely to lead to good decision making. The answer is to be rigorous about speaking to a diverse range of people to get their views. We look forward to engaging with you in the future, working together to understand financial market developments from a diverse and varied range of perspectives to inform our policy committee decisions. Thank you I am grateful to Christine Boykiw, Sumita Ghosh, Sam Juthani, Ankita Mehta and Arjun Popat for their assistance in helping me prepare these remarks.​ 1 See Carney (2017) – link in References section. Gender, ethnicity, age, disability, sexual orientation and  education are types of ‘identity’ diversity. ‘Cognitive’ diversity is about our perspectives and how we think about and solve problems.
BIS Review 5/2004  9  Chart 5: Exchange rates and regime change in Iraq, Sep 2002-Dec 2003 Swiss $ 100  Cents  Saddam deposed by end June 03 a Saddam captured by end Dec 03 b  90 80  0 2 4  70  6  60  8  50  Swiss $ (rhs)  10  40  12  30  14  20  16  10  18  0 20 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Source: United Nations, Central Bank of Iraq, Tradesport Exchange Limited a Value in cents of a contract that paid 100 cents if Saddam is deposed by the end of June 2003, and 0 otherwise b Value in cents of a contract that paid 100 cents if Saddam was captured by the end of December 2002, and 0 otherwise  One futures contract paid out 100 cents if Saddam was deposed by the end of June 2003 and nothing otherwise. As the chance of Saddam’s regime being deposed (and the price of the future) rose, the Swiss dinar appreciated against the dollar. Later there was also a future that paid 100 cents if Saddam was captured by the end of December 2003, and nothing otherwise. As the chance of this happening (and the price of the future) fell last autumn, the Swiss dinar fell against the dollar. It has just risen again.

In particular, on 12 March the European Commission released a proposal that seeks to harmonise their regulation in Europe. The proposal includes a Directive that specifies the core elements of what may be termed “European covered bonds”. It also amends banking prudential regulations, strengthening the conditions under which banks investing in these products may benefit from lower regulatory capital requirements. Once the Commission’s proposal is approved, the Directive shall be transposed so that banks may begin to issue as soon as possible instruments that benefit from the advantages of obtaining the “European covered bond” label. So, it is true that there is still a long way to go before these regulatory changes materialise but first steps are being taken to pave the way for more harmonised covered bond markets, which will foreseeably enlarge the potential investor base for these bonds. Lastly, in addition to the specific initiatives already taken under the umbrella of the Capital Markets Union to activate certain markets, I would also like to mention that other opportunities for the markets may arise from new instruments. I have in mind here, for example, the recently created non-preferred senior debt instruments. This new category of debt instrument ranks behind ordinary debt in the order of seniority of claims in insolvency proceedings and extends the range of liabilities that banks can issue to comply with their  4/6  MREL requirements. Some Spanish banks started last year to issue this new debt instrument and others will follow soon.
If this were the only correct interpretation, more favourable interest rates would not represent a genuine advantage for the Swiss economy, because the real interest rate advantage would be fully offset by a corresponding real appreciation of the Swiss franc. This has not been the case during the past decades. On the contrary, the real interest rate lead in our country has on average exceeded the trend in real appreciation. Therefore, the upward trend of the Swiss franc is only one of the reasons for the "interest rate island". More convincing explanations include the high savings rate in Switzerland, political stability, the efficiency of the financial sector, and a by and large investor-friendly legal framework. To the fore, however, are likely to be monetary arguments. In an international comparison, Switzerland has exhibited very low inflation rates and correspondingly low price fluctuations over a very long period of time. Beyond this, its higher-than-average gold and foreign exchange reserves create confidence. The relatively low Swiss franc interest rates may therefore be considered as a type of insurance premium paid by investors to hedge their portfolios against crisis situations. The more than three years of relatively calm co-existence with the euro have not significantly diminished the interest differential in favour of the Swiss franc. Currently, the difference between German and Swiss long term rates on government bonds still amounts to more than 1.5 percentage points.

Upturn cut short by sovereign debt problems in 2011–2012 An effect of the severe crisis of 2008 was a shutdown in global trade, which brought the Swedish economy to a sudden halt. To support the economy, the Riksbank quickly lowered the repo rate to a, at the time, historically low level of 0.25 per cent. Around the world, other central banks and governments made herculean efforts to kick-start the financial system and reverse the trend. As the situation on the credit markets improved and global trade picked up, the recovery occurred more rapidly than expected in Sweden. From mid-2010, the Riksbank began raising the repo rate towards a more normal level. But during 2011, the recovery stuttered when unease linked to the problems of heavily burdened public finances in several European countries started to affect the credit markets to an ever-increasing degree. Measures by institutions such as the EU and the ECB helped to stabilise the situation, but weak confidence and low demand among households and companies subdued European developments. This, in turn, led to a slowdown in Swedish economic activity, despite relatively high domestic demand. GDP fell again in 2012 and the Riksbank lowered the repo rate in a number of steps. Focus on inflation and maintaining confidence in the inflation target has produced results Something which provoked head-scratching around the world during these years was that inflation remained at a relatively high level to begin with, despite the major economic slowdown after 2008.
This involves transparency on the part of service providers; and  iv. Customers should not be faced with unreasonable post sale barriers imposed by banks and financial institutions or service providers, forcing them to purchase supplementary products and services. 4.3.5 Ensure fair treatment to customers: Treating customers fairly throughout the life of a payment product, as well as at service points, is an essential theme that should be focused on by all stakeholders. In this regard, it is necessary to establish principles-based regulations on payment related activities rather than compliance or rules-based regulations. The regulations should relate to the payments mode or the payments product life cycle and the payments culture in each country. The principles and related reviews should seek to accomplish the provision of solutions to significant and persistent problems in the distribution of products in the retail segment of the payment services, and to build financial capability, i.e. equipping customers with the skills and knowledge needed to achieve a fair deal. 4.3.6 Established customer protection and rights, and legal framework: The retail customers and their rights should be protected in the legislation. Several countries have passed separate laws to achieve this. In the Payments and Settlements Act, the Central Bank of Sri Lanka has included a separate section on customer protection. In 2005, the Reserve Bank of India established regulation and supervision within its Payment and Settlement Act. It is imperative that customer rights are looked after as many financial institutions and service providers have been accused of customer exploitation.

Ardian Fullani: Achievements and challenges of the Albanian banking system Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Open Forum with the Albanian banking system’s players, Tirana, 29 September 2008. *  *  *  Dear heads of commercial banks operating in Albania, Dear participants, It has almost been 6 months since the first open forum was held, at the core of which were the achievements and challenges of the Albanian banking system. Today’s forum is a follow-up of the debate which commenced 6 months ago with the good will and goal to further bolster the banking system’s stability in Albania. I consider the first forum a successful one, given that it generated a number of important decisions that have been made recently. In addition, I have the strong conviction that the discussions to be held this afternoon will be productive and will serve to the prudent examination of the banking system’s activity, in particular in the context of the recent developments in the global financial markets. To begin with, I would like to provide a general overview of the banking sector’s financial situation and the extent of impact from the developments in the international financial markets. During the first half of 2008, the banking sector maintained its stable growth pace. The Albanian banking system is lucrative, well-capitalized and liquid. The good financial result continues to be driven by the rapid growth of high return on investment activities.
8  As I have pointed out in an earlier speech (Sentance, 2011), UK inflation has persistently run ahead of the euro area, Sweden and Switzerland since the financial crisis,  BIS central bankers’ speeches  11  Chart 11 – UK goods and services inflation Annual percentage change in consumer prices 7  Goods inflation  6  Services inflation  5 4 3 2 1 0 -1 -2 -3 2000  2001  2002  2003  2004  2005  2006  2007  2008  2009  2010  2011  Source: ONS For these reasons, I have been arguing for the past year that the MPC should embark on a policy of gradual interest rate rises and that delaying this process exposes us to greater inflationary risks in the future – which would not be good for economic growth in the medium term. Continuing to accommodate inflation makes it more likely that a future sharp policy correction will be needed, particularly if persistent high inflation becomes embedded in wage and price-setting. That not only poses a threat to the recovery further down the track, but it could erode the hard-earned credibility of the UK monetary policy framework – which would be very damaging for economic growth over the longer-term. Here in Jersey you are in a monetary union with the UK. So you too have a strong interest in the MPC getting its policy judgements broadly correct.

Source: IMF World Economic Outlook This raises the possibility that some key commodity markets, including the market for oil, could be in a structural position of scarcity for some time yet, leading to further significant upward price movements. For example, in its recent World Economic Outlook, the IMF published an analysis suggesting that current trends in the oil market – with supply unable to keep up with strong demand – could lead to a further 200% rise in oil prices from current levels over the next 20 years.5 Of course, there is great uncertainty around such predictions. But my judgement would be that this IMF analysis is likely to be directionally correct, even if we can’t be precise about the exact timing and scale of upward price movements. This upward shift in energy and commodity prices cannot carry on indefinitely, of course. Eventually, rising prices should choke off demand – both by encouraging more efficient use of resources and possibly by squeezing growth in consuming countries. Over a period of time, high prices may also encourage investment in new sources of supply. But while we are in this phase of strong energy and commodity price growth, there is also the risk that the inflationary trend could become embedded in the rate of increase of wages and prices more generally. That is a risk that cannot be dismissed lightly, given the experience of the 1970s when this did indeed happen.
This is leading workers to use their bargaining power to recoup lost income. For the seven countries covered by the ECB’s wage tracker,[4] collective bargaining during 2022 led to an aggregate wage rise of 4.7% for this year. This is already playing a stronger role in core inflation. While wage-sensitive items[5] contributed only around 0.5 percentage points to core inflation before the pandemic, that contribution has more than doubled in recent months. If both workers and firms accept fair burden sharing, and stronger wage growth represents merely a rebalancing between labour and capital, then both wage and price pressures should diminish as this process plays out. But if both parties attempt to unilaterally minimise their losses, we could see a feedback mechanism between higher profit margins, wages and prices. The risk of such a “tit-for-tat” dynamic is also heightened by the prospect that labour market tightness will linger. Unlike other jurisdictions, labour participation in the euro area has grown robustly since last year[6], helping to address part of the soaring labour demand driven by reopening. But the pandemic has also led to a sharp increase in public employment[7], reducing the pool of labour available to the private sector. And how much further labour supply can expand overall will depend, among other things, on complex policy questions such as countries’ attitudes to immigration and childcare.

As the cut-off date for the projection round was in early March, the forecasts do not incorporate the effects of the recent financial market tensions. Those tensions have added new downside risks and have made the risk assessment blurrier. More generally, many of the assumptions in the projections, such as those on fiscal policies and energy and food prices, are volatile. This implies additional uncertainty around the baseline for both growth and inflation. Some of this uncertainty will recede as the fallout from recent events in financial markets becomes clearer. But faced with overlapping shocks and shifting geopolitics, the level of uncertainty will most likely remain high. To confirm the outlook in our projections over time, we therefore also need to look at additional indicators that can be observed in real time. Underlying inflation To that end, the second input we will be drawing on is the dynamics of underlying inflation. Underlying inflation is not a policy target, but measures of underlying inflation can serve as a complementary cross-check of our forecasting process. Underlying inflation is typically quite inertial and therefore gives us an indication about the persistence of inflation into the medium term. We will be looking to see a sustained downward turn in underlying inflation measures to be confident that the inflation path will converge to our target in the medium term. So far, we do not see clear evidence that underlying inflation is trending downwards. In fact, we see two forces pushing underlying inflation in different directions.