samchain/econo-pairs-v1 huggingface dataset:
Consequently, it is also probable that inflation a couple of years ahead will be close to 2 per cent, roughly as forecast by the Riksbank in August, even if inflation in the forthcoming year may be lower. Long-term perspective Before rounding off, allow me also to touch upon the longer-term perspective. Over the last decade, the economic policy debate has largely centred on stabilisation policy. The fact that stabilisation policy was in focus during the first half of the 1990s is easy to understand. Following a severe crisis caused largely by mistakes in stabilisation policy, we changed our exchange rate regime and altered the focus of both our monetary policy and fiscal policy. In the EMU debate, it has been natural to continue the discussion of monetary policy and exchange rate systems. I, at least, believe that this discussion went a bit too far. It was easy to get the impression that welfare in Sweden depended solely on the Riksbank's actions. BIS Review 42/2003  3  This is not the case of course. The objective of monetary policy over the past ten years has been to ensure price stability. This has proved rather successful - inflation is in line with the Riksbank's target and it is important therefore that it lays a solid foundation for growth. But when we alter interest rates, it is mainly with a view to affecting demand around a long-term output trend. While this is important, it must be remembered that we do not affect the trend itself.

In August, inflation, measured in terms of CPI and UND1X, was forecast from this perspective to rise slowly to around our 2-per-cent target. There is currently no reason to alter this forecast markedly. Some factors that are difficult to access Of course there are factors that could thwart the main scenario I've just presented. One such factor is a delay in the European economic recovery. Several countries in the euro area are contending with growth problems. Germany's GDP, which comprises one-third of that of the euro area, declined during the second quarter. Investment in Germany has fallen since 2000 while consumption has been weaker than the euro area average. There was also a contraction in second-quarter growth in France, whose GDP comprises roughly one-fifth of that of the euro area. This came after the country had enjoyed relatively robust growth in consumption in recent years, which had compensated  2  BIS Review 42/2003  for weak investment growth. There are also more fundamental problems in the euro area which could have a negative impact on economic activity. For instance, Germany is still suffering from the aftereffects of reunification. Moreover, the euro has appreciated sharply. In light of this, there is no doubt that the world economy is strongly dependent on a US revival. The outcome of the forthcoming wage bargaining round will also be of great importance, both for economic activity and inflation prospects.
Despite the recent more encouraging signs, we continue to expect underlying growth to remain sluggish in the first half of the year (the actual data are likely to move somewhat erratically because of the extra holiday associated with the Queen’s Diamond Jubilee). But inflation has been falling sharply, down from its peak of 5.2% in September to 3.6% in January and is likely to continue declining as increases in energy prices a year ago drop out of the calculation. That means that the long-lasting squeeze on household real incomes is also starting to ease. In turn, that should facilitate a modest pickup in household spending;  1  Banks do act as intermediaries in the transactions, but it is the behaviour of the ultimate seller that matters for the economic impact. 2  BIS central bankers’ speeches  the upbeat retail sales figures announced at the end of last week may be a sign this is already starting to happen. But while growth should gradually strengthen, the continuing headwinds from the unwinding of excessive debt and the Government’s continuing fiscal consolidation mean that the pace of recovery is likely to remain moderate by historical standards. As a consequence, a margin of unused capacity and labour in the economy is likely to persist for some while yet, helping to ensure that domestically generated inflation – presently running around 1½%, depending on exactly how one chooses to measure it – should stay subdued.

So it is with the economic medicine of low interest rates and quantitative easing. The immediate consequences may be unpalatable, but the sooner we can get the economy on the mend,  2  For a single male, aged 65. 3  Indeed, if the savings were held in bonds of a maturity structure that matched the likely longevity of the individual, the two effects would cancel each other out. 4  BIS central bankers’ speeches  the sooner we can return policy to more normal settings and the better it will be for all of us – savers, businesses and employees alike. Thank you! BIS central bankers’ speeches  5
MAS safeguards the interests of investors in five ways:   First, we demand stringent disclosure of information by issuers;    Second, we require transparency in the information disclosed;    Third, we set standards for intermediaries who sell investment products to provide quality financial advice;    Fourth, we promote investor education, so that investors are empowered to make informed decisions.   Fifth, we provide affordable and accessible dispute resolution mechanisms for investors who feel aggrieved by the investment process. Let me take each of these aspects in turn. BIS central bankers’ speeches  3  Disclosure There is nothing like disclosure to instill market discipline. In the words of US Supreme Court Justice Louis Brandeis, “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman”. Disclosure is about shining that light so that all can see and make informed decisions. Investors are entitled to accurate and timely disclosure of material information so that they can assess the risks and rewards of their investment. Disclosure works not because all investors understand every word that is disclosed. Disclosure works because it facilitates scrutiny by experts in the market; it is this professional scrutiny that acts as a check on issuers and helps to inform the broader investor base. Take for example an IPO prospectus.

Since its inception, SAMA has supported banks to develop human resources by establishing the Institute of Banking, which contributes to training and qualifying a large number of national cadres in the financial services sector. The Institute continues to professionally exercise this role and make efforts to cope with the developments in the financial and banking sector by providing information solutions and diverse educational programs consistent with individual bank needs. The Institute's programs have covered important banking fields, such as treasury, investment and credit, and contributed effectively to developing and qualifying national cadres. Thus, Saudization in the banking sector exceeded 85 percent by the end of the first half of 2006. Dear Audience, These developments, which have diversified and expanded the services provided in the Saudi market, have given rise to substantial challenges to financial institutions. One of the most important challenges is to provide a sufficient number of qualified human resources to meet the needs of these institutions. Despite the employment efforts made by banks to cope with this expansion, and though 4,246 employees were appointed during the first half of 2006, the total needs of these institutions are still not satisfied. Hence, SAMA has promptly exerted expeditious efforts in search for solutions to these challenges. To this end, it has instructed the Institute of Banking to study the situation and propose practical solutions to help banks bridge such gap over both the short and long terms.
The standard for countries wishing to participate in the international capital market—the Special Data Dissemination Standard—is being revised to give a better account of the level of foreign reserves and the debt position in individual countries. At country level, moreover, a code for monetary policy transparency and measures for maintaining financial stability is being drawn up by the IMF together with the BIS, central banks, supervisors, the World Bank and the OECD. A fiscal policy code is already in place. 4. Managing future crises Even with these measures, we have probably not yet seen the last financial crisis. A readiness for the management of future crises therefore needs to be created. A central issue in international discussions is the distribution of risks among the parties concerned. While the IMF has been provided with additional financial resources, it neither can nor should be prepared to contribute the main part of what may be needed in a crisis. This is because expectations that any costs will always be carried by someone else can result in an overall increase in exposure to risks, the problem of moral hazard. Such expectations are liable to drive up credit supply and demand and can influence private agents as well as national policy-makers. One way of dealing with moral hazard among private investors is to arrange for them to carry a larger share of the burden in a crisis.

This means that they are dependent on the path of economic fundamentals; in the case of government bonds, for example, the relevant factors include the budget balance, monetary policy and inflation expectations. Financial asset prices are highly susceptible both to expectations of how the market ought to move, given the underlying conditions, and to how it will move, given the expectations of how other players will act. This can result in wide fluctuations. Prices may deviate for a considerable time from what could be regarded as their long-term equilibrium. Markedly inflated prices can result in ‘bubbles’, out  3  BIS Review 52/1999  of touch with the level that seems to be fundamentally justified. Examples of this are the developments in some Asian countries in the mid 1990s, as well as price movements in the Swedish property market around the turn of the 1980s. To some extent, such phenomena can be explained in terms of how economic policy is conducted. But the causes of large price movements are also to be found in the construction of financial markets. If a market is to function properly, all the relevant information should be available simultaneously to every player. In practice, that is evidently not the case. Moreover, financial players can act in the knowledge that what they do will influence the market. The fact that performance is assessed in the short run, in many cases in comparisons with other players, makes herd behaviour common.
RQFII) scheme. 5. Hong Kong is fortunate to have made a good start in offshore RMB business. Since the introduction of offshore RMB business in 2004, we have developed a wide variety of RMBdenominated financial products. In particular, the offshore RMB bond market in Hong Kong is by far the largest in the world. We also possess the largest RMB liquidity pool outside of  1  KFH Research. 2  Zawya. 3  KFH Research. BIS central bankers’ speeches  1  Mainland China. As at the end of 2012, the aggregate amount of RMB customer deposits and certificates of deposits has reached a high of 720 billion yuan. Notwithstanding these, when it comes to Islamic finance, Hong Kong is a relative newcomer and would need to catch up in this area. Legislative exercise to promote the development of sukuk market 6. In developing Islamic finance, we are taking a step by step approach. As a first step, our current focus is to put in place the supporting legal infrastructure. Specifically, the HKSAR Government is set to change the tax laws in Hong Kong to facilitate the development of the sukuk market. In terms of economic substance, sukuk are no different from conventional bonds. However, since Islamic law prohibits the payment and receipt of interest, sukuk are often structured with the use of special purpose vehicles and multiple transfers of underlying assets.

Apart from our continuous efforts to put in place a conducive platform, it is also crucial for market players to maximize their readiness to grasp the opportunities brought by the development of Islamic finance in Hong Kong. After all, market players will be the ones who drive the growth of the market ultimately. So, I highly encourage you all to gear up for the new opportunities ahead of us. On this, I am pleased to note that some financial institutions have already started to get ready by mobilizing their staff in the Middle East or Malaysia to Hong Kong, as well as providing training to their staff in Hong Kong. The fact that you are here today is also a good indication that you are keen to prepare yourselves. I hope you would take the most out of this workshop. 14. Thank you. BIS central bankers’ speeches  3
The Great Financial Crisis is a good example: at that time, solid and well-anchored inflation expectations in the euro area contributed to counteract the strong deflationary forces affecting our economies. However, since then, market-based measures of inflation expectations in the euro area have been decreasing and this decline has been even more pronounced since the beginning of 2019. This fall in market expectations has raised some questions among central bank watchers on potential risks of deanchoring of inflation expectations and more generally on our ability to deliver our mandate of price stability. I.2. The need for better information on households expectations  Let me stress that market-based inflation expectations are not the only available measures to assess future risks of inflation. Professional forecasters or consensus forecast provide a significantly higher figure than the 5Y/5Y ILS, at around 1,7% rather than 1,2% to 1,3%, although all of them point out to a decrease of inflation expectations over time (Figure 1). Market-based measures have also some technical limitations: first, related to the liquidity of 2  financial markets, and second because they are affected by the evolution of the risk premium over time. Moreover, while financial market expectations provide information on future financing conditions, the evolution of prices and wages depends more deeply and directly on what household and firms expect regarding future growth and inflation. Consequently, existing surveys among firms and households can provide very useful and valuable information on expectations.

Inflation expectations and the conduct of monetary policy, Speech at an event organised by the SAFE Policy center, 11 july 2019  6  Figure 3. Recent divergence between the evolution of household inflation expectations and market based-measures  Sources: ECB, European Commission  7
BIS central bankers’ speeches  7  that entails holding nominal GDP close to a given path over which nominal GDP increases by a certain percentage. The idea is roughly as follows. If nominal GDP falls below this intended path – which it did during the crisis – the central bank must compensate by stimulating the economy so that nominal GDP grows faster for a few years to get back onto the target path. So, bygones are not bygones in this way of thinking. Some of the increase in nominal GDP comes from higher inflation. If economic agents expect this type of compensating policy from the central bank, their inflation expectations will rise. Thus, the expected real interest rate will fall, which is an advantage in countries where the nominal interest rate has fallen as far as possible and where unorthodox monetary policy measures may not really work as well as we would wish. The introduction of a target for nominal GDP could in this way be seen as attempt to “kick start” the economy. As I have said today, it is not good to have a cocksure attitude. But I am nevertheless inclined to agree with those who are sceptical to the idea of replacing the inflation target with a target for nominal GDP.14 The fact that nominal GDP increases can be either due to real GDP increasing, to prices – measured using the GDP deflator – increasing, or to a combination of the two.

In other words, the financial sector as a time-transforming sector is especially sensitive to the movement of real rates and to discrepancies between the actual real rate and the natural rate. To make all this even more complicated, try to imagine that the equilibrium or natural real rate of interest is not constant, but is itself moving in one direction. Then, as a central banker, you have to go down even more than you thought conceivable. This is exactly what we believe has been happening in the developed world for quite some time now (Chart 2). Here are some famous estimates made by John Williams at the San Francisco Fed, but you can find similar estimates elsewhere. Chart 2: Real equilibrium rates in the developed world have been falling steadily (Holston et al., 2016)  Why is that? Nobody knows for sure. But I tend to explain it using a famous quote from the French poet Paul Valéry – “The future is not what it used to be”. Probably due to factors such as demography, we are tending to look differently at the future. We have a different “discount factor”, if you will, which is leading us on average to prefer future consumption to current consumption (on average, of course, not individually). This basically changes everything for monetary policy, which is a policy based on the relationship between real interest rates and demand.
On the other hand, the further decline of capital and money market interest rates observed since January 2015 carries the risk of a renewed increase in imbalances on the Swiss mortgage and residential real estate markets over the medium term. First, compared to alternative assets, investments in real estate appear to have become more attractive for banks, commercial investors and households. In the residential investment property segment in particular, additional demand from investors searching for yield might push prices up further. Second, the unprecedented interest rate environment creates additional incentives for banks to incur higher interest rate and credit risks. They might be tempted to increase both maturity transformation and lending to compensate for the additional pressure on margins and to stabilise short-term profitability. Such strategies would further increase banks’ exposure to large interest rate shocks and to a correction on the mortgage and real estate markets. Given these risks to financial stability, banks and authorities should remain alert and, if necessary, take measures to contain such risks. In particular, should momentum on the mortgage and residential real estate markets pick up again, additional measures might become necessary. In this regard, particular attention should be paid to the investment property segment. This segment is more likely to be materially affected by the additional demand from investors searching for yield in the current environment. Furthermore, the measures taken so far have predominantly addressed the segment of owner-occupied residential real estate.

In Asia, this will pose a strong challenge to Singapore, because it will strengthen the tendency for a single major hub to emerge, rather than several smaller ones. Tokyo will perforce be the biggest financial centre in our time zone, because of the sheer size of Japan’s investment funds and its economy. But Tokyo has significant limitations - a high cost structure, domestically oriented financial markets, consensus-based decision making, and not least, a lack of English speakers. This creates room for at least one other major financial hub in Asia. Singapore enjoys good economic cooperation with our Asian partners. We are well-placed to service the region, whether it is PSA, Changi Airport, or financial services. As the region recovers and grows, we hope to prosper together with Malaysia, Indonesia and Thailand. But our relationship with them is qualitatively different from Hong Kong’s vis-à-vis China. Besides, Southeast Asia is a smaller hinterland than China. Therefore for Singapore to grow as a hub, we must extend our catchment area beyond Southeast Asia. Our orientation must be international, and not just regional. We have done this before. This is how we became the fourth largest forex centre globally and the leading centre for global derivatives trading in the Asian time zone. The challenge is to repeat this feat in new areas of competence. Developed markets and global players are already our customers. Singapore can be a portal, an intermediary or a market for them. Finding the right partners in strategic alliances will be critical.
Opinions may differ about what were the most important “triggers” of the acute crises we are discussing today. Again, I see both differences and similarities between Sweden and the Asian countries. In our case, a policy shift to the low-inflation regime in the rest of Europe, combined with structural changes and a more hostile international environment (with higher interest rates and lower growth, as I mentioned before), made the existing situation unsustainable and triggered the crisis. In the early 1990s the government refrained from accommodating the high costs and inflationary pressures that had been building up in the 1980s. Under similar circumstances earlier in the 1970s and 1980s we had devalued several times. Now there was broad agreement that we should stick to the fixed exchange rate in order to bring inflation down; in this respect, the policy was indeed successful: inflation fell from 8-10 per cent to 2-3 per cent in less than two years. One effect of this, however, was that real interest rates shot up. Structural reforms were also implemented, particularly in the tax system but also in housing and other areas. One aim of these reforms was to create more market-related incentives for savings and to reduce subsidies. While these changes were long overdue, they now came at the worst possible time from a macroeconomic point of view. In this context, it is relevant to mention the importance of the sequencing of policy changes.

To understand the handling of a crisis, it is useful to know which factors generated the problems. Hence, my narrative will include the events that led up to the crisis in Sweden. I will also comment on the developments in Asia, with some emphasis on Korea. Having sketched this background, I will turn to the actual handling of crises, explaining why we found certain types of solutions useful in Sweden - leaving it to you to consider whether the same might apply to some extent to your country. 2. Background The macroeconomy First, let me say a few words about the macroeconomic background to the crisis in Sweden. There are both similarities and differences between Sweden and Asia. In the following I will touch on some of them. It should also be remembered that substantial differences also exist between the Asian countries. One common factor is the fixed exchange rate. In Sweden this led to high levels of foreign borrowing, particularly in the private sector. In addition it made it difficult to counter the gradual overheating of the economy by applying contractive monetary measures - raising interest rates tended to increase capital inflows which, to the extent they were monetised, further contributed to the overheating. Following the deregulation of the domestic financial market, the crisis in Sweden was also preceded by a rapid expansion of credit; in the course of five years, private borrowing grew from 85 to 135 % of GDP.