samchain/econo-pairs-v1 huggingface dataset:
HICP inflation, excluding energy and food, will remain very high until the end of 2022, but thereafter it is expected to decline as the upward pressures from the economic reopening subside and supply bottlenecks and energy input cost pressures ease. The ongoing economic recovery, tightening labour markets and some effects from compensation for higher inflation on wages – which are expected to grow at rates well above historical averages – imply high underlying inflation until the end of the projection horizon, although the baseline assumes that longer-term inflation expectations will remain well anchored. In any event, the risks to the inflation outlook remain on the upside and have intensified, particularly in the near term. In the medium term, these risks include a protracted worsening of production capacity in the economy, persistently high energy and food prices, inflation expectations being revised up above the target level and larger than anticipated wage increases. However, a decline in demand over the medium term would ease the inflationary pressures. Under the downside scenario that I mentioned earlier, reflecting the possibility of a severe disruption to European energy supplies, inflation averages 8.0% in 2022 and 6.4% in 2023, before dropping below the baseline projection to 1.9% in 2024.

For the more immediate future, the projections indicate that inflation will remain very high due to continued pressures from energy and food prices and pipeline pressures in the pricing chain, in addition to the effects of the economic reopening and the global supply shortages. But looking further ahead, in the absence of new disruptions, energy costs should stabilise and supply bottlenecks should ease. This, together with the ongoing monetary policy normalisation, should support the return of inflation to our target. In this setting, the performance of the labour market and inflation expectations are key. Unemployment in the euro area fell to an all-time low of 6.6% in May. Job vacancies across many sectors show robust demand for labour. Wage growth has continued to increase gradually over the last few months, but still remains contained overall. Most measures of  2  long-term inflation expectations currently stand at around 2%, although recent above-target revisions to some indicators warrant continued monitoring. The Eurosystem projections published in June showed that inflation would remain very high for most of 2022, averaging 6.8%, before declining gradually from 2023 to 3.5%. It would then converge towards the ECB’s inflation target in the second half of 2024 (2.1%). The expected decline in 2023 and 2024 mainly reflects an anticipated moderation in energy and food commodity prices in the absence of additional shocks, as embedded in futures prices. In addition, the ongoing normalisation of monetary policy will contribute to the moderation in inflation, with the usual transmission lags.
6  BIS central bankers’ speeches  •  For the first time, these inflows exceeded the income repatriated abroad by MNCs operating in Singapore. •  Gross National Income (GNI) per capita became the more relevant measure of Singapore’s income and standard of living than just GDP per capita. The 2020s and 2030s saw the proliferation and convergence of several technological trends that transformed economies and societies globally. •  Rapid progress in digital and mobile technologies, coupled with advanced biometrics and global wi-fi access, made payments virtually costless and highly secure, precipitating an explosion in the growth of digital commerce and digital finance. •  Advances in cloud computing, big data analytics, smart sensors and learning machines transformed the provision of consumer and business services, including financial, legal, auditing, consultancy, and logistics. •  They also spurred a transformation in the provision of social and public services such as telemedicine, online learning, and congestion control, substantially enhancing efficiency and consumer welfare. Singapore was well-positioned for the pervasive digitisation of the global economy that occurred in the 2020s and 2030s, mainly due to two key initiatives that it embarked on in 2015 in the drive towards productivity-led growth: •  The first was the concerted national effort to build and deepen skills at all levels through extensive worker retraining programmes and subsequent introduction of the teaching of digital technology across the education system.

8  BIS central bankers’ speeches  In the area of climate change adaptation, the Dyke Construction Programme, launched in 2045, proved critical not only in preventing the ongoing rise in sea levels from inundating our island, but also in generating a variety of ancillary economic activities. Adapting and building on the earlier Dutch designs and technologies, Singapore became a major exporter of dyke solutions to many other coastal cities around the world. The last 25 years have seen perhaps the most significant transformation of the Singapore economy – competitive, dynamic, resilient, and environmentally sustainable. GDP grew by an average 1.5% per annum, and GNI 1.7% per annum. Conclusion Let me conclude. I have described the evolution of our economy over the last 100 years, chiefly from the perspective of industrial developments, technological trends, and other global forces. It is a story of continuous restructuring, made possible by a judicious blend of the invisible hand of the market and the visible hand of good government. But the key non-economic factor that made this development journey possible is the culture of our people. It is a culture of innovation. Today, we have a highly productive and engaged workforce with deep skills, continually learning and taking advantage of new technologies, and building meaningful careers. It is this spirit of constant adaptation and lifelong learning that has It is also a culture of resilience.
The criterion of security covers primarily the reduction of risks such as market, credit and concentration risks. In addition, it is important for us to maintain the real value of the foreign exchange reserves in the long term. Consequently, the long-term return on investment must match the average rate of inflation. If the criteria of security and liquidity are fulfilled, our investment policy aims to achieve an additional return over and above the real maintenance of value. The return on foreign exchange reserves is made up of current income plus changes in the value of the investments. The income takes the form of interest and dividend payments on the bonds and shareholdings. In view of the current low interest rate environment, these amount to only around 2% of foreign exchange reserves per year. Just like investments that fall due, income is generally reinvested. Therefore, foreign exchange reserves tend to rise even when we do not need to purchase additional foreign exchange. The other component of returns is changes in the value of foreign exchange reserves. We value all investments at market prices and in Swiss francs. Consequently, changes in the prices of interest-bearing paper and shares as well as exchange rate movements have a direct impact on the net result for investment. If the Swiss franc strengthens against the investment currencies, this results in a valuation loss on the foreign exchange reserves.

In Sweden, the Financial Crisis Commission proposed, in its first interim report, that the Riksbank and Finansinspektionen together bear responsibility for macroprudential policy in Sweden.8 This is to occur through the formation of a macroprudential council, in which both authorities work together with independent experts, entailing in principle that the existing Council for  7  See IMF (2013) Sweden—2013 Article IV Consultation: Concluding Statement of the Mission, Stock-holm: 31 May 2013 and European Commission (2013) Recommendation for a COUNCIL RECOMMENDATION on Sweden’s 2013 national reform programme and delivering a Council opinion on Sweden’s convergence programme for 2012-2016, Brussels: 29 May 2013. 8  SOU 2013:6 Att förebygga och hantera finansiella kriser, Delbetänkande av Finanskriskommittén, Stockholm: 2013. 10  BIS central bankers’ speeches  Cooperation between the Riksbank and Finansinspektionen is confirmed in law. The Council is to seek to promote greater knowledge about systemic risks and the development of macroprudential tools, and discuss appropriate measures. In our consultation response, we gave our view on the commission report and also added our own proposals.9 We believe that the Financial Crisis Commission’s proposal for shared responsibility between two authorities risks giving rise to ambiguity about who should act. This ambiguity could result in indecisive action. In order to ensure decisive action, responsibility for macroprudential policy should be placed on one body.
And those risks will grow, unless we put global banks and markets on a sounder footing. Suppose, for example, that UK-owned banks’ share of global banking activity remains the same and that financial deepening in foreign economies increases in line with historical norms. By 2050, UK banks’ assets could exceed nine times GDP, and that is to say nothing of the potentially rapid growth of foreign banking and shadow banking based in London. Some would react to this prospect with horror. They would prefer that the UK financial services industry be slimmed down if not shut down. In the aftermath of the crisis, such sentiments have gone largely unchallenged. But, if organised properly, a vibrant financial sector brings substantial benefits. Today financial services account for a tenth of UK GDP and are the source of over 1 million jobs.5 Two thirds of those are outside London, including jobs in asset management in Edinburgh, transaction processing in Bournemouth and insurance in Norwich. Being at the heart of the global financial system also broadens the investment opportunities for the institutions that look after British savings, and reinforces the ability of UK manufacturing and creative industries to compete globally. Not to mention that financial services represent one of the UK’s largest exports. More broadly, London’s markets serve a vital global role. London acts as Europe’s window to global capital; is a centre of emerging market finance; and can play an important role in the financial opening of China.

What is clear in those early editions is the decidedly international flavour of a London investor’s interests – from tramways in Buenos Aires to copper mines in Portugal. Since then, London has been a truly international financial centre. In 1913, at the twilight of the last great wave of globalisation, 71 foreign banks had London offices. A century later, there are nearly four times as many. Today, almost twice as much international banking activity is booked here as anywhere else. London is the home of global markets as well as global banks. Almost half of all turnover in over-the-counter (OTC) derivatives takes place here. London’s share of global foreign exchange turnover is almost as high and it remains a major hub for trading in gold. UK insurance companies have around 10% of the global market.2 Extending the net further, the UK is home to the third largest “shadow banking system” with assets of $ trillion.3 The emergence of London as a financial centre in the nineteenth century owed a lot to the UK’s position as the world’s greatest trading nation. Britain accounted for as much as a quarter of world trade and produced around a tenth of global GDP.4 Over the following  1  At around this time there were 701 accountancy firms operating in the City, and over 2000 firms of solicitors. See David Kynaston’s book “City of London: The History” (Chatto & Windus, London, 2011). 2  See “Fund Management September 2013” published by TheCityUK, available at http://www.thecityuk.com/research/ourwork/reports-list/fund-management-2013/.
In Australia, the Hayne Royal Commission has detailed a litany of wrong-doing in the country’s banking industry, including forging loan documents and pushing customers into bad investments to meet bonus targets. I take some comfort that financial institutions in Singapore have generally been better behaved and are better regarded. But we have had our problems too: the mis-selling of Minibonds and other structured products; the manipulation by traders of financial benchmarks; and more recently the laundering of 1MDB-related funds through our banking system. We too can do better. Let me briefly suggest three things the industry and regulators can do together to strengthen trust in finance, with a focus on what we are doing here in Singapore. First, we must ensure that the financial system is not abused for illicit purposes – be it money laundering, tax evasion, or terrorist financing. In Singapore, we had a rude awakening in 2015 when it came to light how 1MDB-related funds were laundered through our banking system. MAS and the industry have worked hard since then to strengthen systems and processes to detect and deter illicit fund flows. Financial institutions have made significant strides in managing money laundering risks. Boards and management are more focused on addressing issues related to illicit finance. They have made the detection of money laundering risk a responsibility of front-line, customer-facing staff, and not just the compliance function. Many financial institutions have strengthened their remuneration frameworks to include financial crime risk management as a key performance indicator.

The scorecard incorporates non-sales performance indicators, such as providing suitable product recommendations and making proper disclosures of material information to customers. 3/5  BIS central bankers' speeches  In all of this, the tone from the top is critical. Senior management and supervisors at all levels must make clear to their staff that meeting revenue targets must never be at the expense of treating their customers with fairness and honesty. This will go a long way in strengthening public trust in finance. Third, and more fundamentally, we must foster a culture of good conduct underpinned by strong standards of ethics. Regulations and controls can only go so far in shaping behaviour. Be it being alert to money laundering risks or dealing fairly with customers, mere compliance with regulatory requirements or internal rules is not enough. Ultimately, how professionals in the financial industry conduct themselves is shaped by the shared values, attitudes and norms in their organisations – in short, the culture. Rules can only tell us what we cannot do, it is values that tell us what we should not do. Those who work in financial institutions must look beyond the question: “Is this legal?” to “Is this right?” “Have I checked the box?” to “Have I checked the risk?” This is why some regulators, including MAS, have intensified their supervisory emphasis on the culture and conduct within financial institutions.
The Riksbank and Finansinspektionen cooperate in the analysis of the mortgage survey, but these random samples entail a small selection and only capture the new loans granted by the banks. There is thus a need to go one step further to see how the debts are distributed and thus how large the risks in the entire banking system are, not merely those in the newly-granted loans. Another factor that affects household debt is residential construction. Not enough housing is being built in metropolitan regions to keep up with the growth in population. This naturally affects both housing prices and household debt and is a long-term problem that should be managed but that neither monetary policy nor macroprudential policy can affect. Developments during the summer While waiting for macroprudential policy to be established, we are continuing to work on our monetary policy analysis in the way I have described and at the beginning of September it will be time for a new repo-rate decision. Since we made our assessment in July new information has been published that we will analyse and make an overall assessment of at our meeting in September, but I shall now summarise what has happened so far. Clearer guidance about future monetary policy During the summer the financial markets have largely focused on expectations of future monetary policy, in particular how the Federal Reserve is expected to act in the coming period.

In addition, FDIC deposit insurance complements strong capital by reducing depositors’ incentives to run on banks. Following the financial crisis, the regulatory and supervisory framework has been extended to more directly reduce risks from swings in the supply of liquidity within the financial system. In particular, the Liquidity Coverage Ratio (LCR) reduces the likelihood of runs by forcing banks to hold highly liquid assets against expected future cash outflows.11,12 Example of money fund reform Runs can also occur on nonbanks. One particularly spectacular run during the financial crisis followed Lehman’s bankruptcy and the Reserve Fund’s “breaking the buck” as investors fled prime money market funds. This run was stopped dramatically by a government guarantee. Recent work by some New York Fed colleagues provides a real-world example of how, in normal times, new regulation can induce investors to distinguish between safe and money-like assets.13 They used the Securities and Exchange Commission’s (SEC) recent implementation of measures to reform the MMF industry as a quasi-natural experiment to characterize investors’ preferences for money-like assets.14 In 2014, the SEC approved a new set of rules aimed at mitigating the fragility of prime MMFs. As of October 2016, prime funds have been required under certain conditions to impose liquidity fees on redemptions or gates halting the redemption of shares.15 Additionally, prime funds offering shares to institutional investors may no longer price such shares with fixed NAVs; instead, they must price their shares at the market value of the underlying securities, much like standard mutual funds.
John C Williams: The joys of spring Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 21st Annual Bronx Bankers Breakfast, Bronx, New York, 10 May 2019. * * * As prepared for delivery It’s an honor to be kicking off Bronx Week, and I’d like to thank Borough President Ruben Diaz, Jr., for the kind invitation. I first visited the Bronx—and first met Ruben—back in November, when I also spent time with students discussing their plans for the future. I was particularly impressed by their talent, energy, and enthusiasm, which is a true reflection of this vibrant and proud community. Today I’m going to share some brief remarks on the national and global economy. I’ll then discuss what that means for monetary policy today and going forward. For me, the most interesting part of this event is hearing and responding to your questions, so please, don’t be shy when I open the floor for discussion. I’ve warned you that monetary policy is on the agenda, so before I go any further, I have to give the usual Fed disclaimer that everything I say reflects my own views and not necessarily those of the Federal Open Market Committee or anyone else in the Federal Reserve System. The U.S. Economy With that out of the way, let me start by saying the U.S. economy is in a very good place.

Since then, we’ve seen more positive readings on China’s economy, in part due to steps the authorities have taken to reignite growth. And financial markets have definitely rebounded from their winter doldrums. Still, we’re not entirely out of the woods regarding risks from a global growth slowdown. Signs of weakness in Japan, South Korea, and some regions of Europe continue, so I am particularly vigilant about monitoring the international data. Trade tensions and ongoing uncertainty regarding Brexit continue to present downside risks. Monetary Policy What does this mean for monetary policy? At last week’s meeting, the Federal Open Market Committee decided to leave the target range for the federal funds rate unchanged, between 2-1/4 and 2-1/2 percent. We also reiterated our patient approach to assessing the need to adjust interest rates in the future. In a nutshell: The economy remains on a path of healthy growth, with a very strong labor market and without the emergence of inflationary pressures. The current setting of policy positions us well to keep it that way. Although my view that we are in the right place in terms of monetary policy has not changed of late, the reasons for it have evolved in line with the economic and financial developments I sketched out earlier in my remarks. The strength of recent data on economic activity, the rebound of growth in China, and the reversal in the tightening of financial markets all imply that near-term risks to growth have receded somewhat.
The NPCs or payments committees will coordinate and liaise with all stakeholders in the payments area, in particular, banks and financial institutions, stock exchanges, securities traders, stock brokers, service providers, regulators and legal professionals. 8.3 The SPC will be reporting to the SAARCFINANCE Governors at their annual general meetings and will obtain general approval for implementation of the road map which will be discussed during the rest of today. The SPC will be assisted by a Secretariat for operational matters. For the time being, Mrs Siriwardena, Director/ Payments & Settlements of the Central Bank of Sri Lanka, has kindly agreed to be the Secretary to the SPC. The Secretariat will take the lead to prepare a road map by establishing working/study groups in the key areas, in particular, policy and communication, infrastructure, research and statistical analysis and legal and regulatory framework. BIS Review 35/2008  3  8.4 The advisory role played by the international standard setters and other agencies on regional payment initiatives has been important. In this regard, the Committee on Payment and Settlement Systems (CPSS) in the Bank for International Settlements (BIS), which is the standard setter for payment system development on a global basis, has intimated its willingness to provide technical assistance and guidance to the SAARC Payments Initiative. Similarly, we are informed that the World Bank is also willing to provide technical assistance and advice to enable the SAARC Payments Initiative to start off on a sound footing.

To make an effective contribution to the development of payments & settlements and also to increase trade and investment flows nationally and regionally, it is necessary to identify the common themes in the form of public policy goals. In this context, the central banks are called upon to take certain minimum actions to further these goals. 6.2 However, the manner and intensity of the current involvement of central banks in payment systems development differ from one country to another. The roots of each central bank’s specific pattern of involvement lie in the different institutional structures and traditions of each country. The central banks may accordingly decide on appropriate action, beyond the minimum, which depends on the national and institutional background. 7. Importance of regional efforts  7.1 By and large, central banks in the SAARC region and elsewhere are currently involved with payment systems in three main ways, namely, in an operational capacity, as payments system overseers, or as catalysts or facilitators of market and regulatory evolution. 7.2 As all central banks are aware, markets may encounter persistent impediments to payment systems development and may become unable to produce efficient and safe services. The existence of such impediments would give rise to policy issues for central  2  BIS Review 35/2008  banks, especially due to their responsibility in achieving the core objectives, such as price stability and financial system stability.