samchain/econo-pairs-v1 huggingface dataset:
For many central banks, including the Bank of England, these factors suggest that the “equilibrium” real rate of interest – the rate needed to keep the economy at potential and inflation on target – which was sharply negative during the crisis, will slowly rise but remain lower than past averages for some time. III. Concluding remarks  Recent developments in China can be assessed within this framework. First, to the extent to which lower Chinese demand for commodities imparts a positive terms of trade and real income shock on the UK economy, the MPC can look through the temporary disinflationary impact on headline inflation and concentrate on potentially more persistent effects through trade and financial channels. In that regard, a potential further  24  Monetary policy will have to adjust accordingly, as these developments likely imply a lower equilibrium real risk-free rate, compensating for the larger credit spread that results. 25  See Rachel, L and Smith, T (forthcoming) ‘Secular drivers of the global real interest rate’, Bank of England working paper. 6  BIS central bankers’ speeches  material slowing of growth in China and more broadly in non-Japan Asia, particularly if coupled with material and persistent exchange rate depreciation, could impart further imported disinflationary pressures over the policy horizon. In addition, a persistent tightening of domestic financial conditions as a consequence of increased global risk aversion could reintroduce a headwind to growth and inflation over the medium term. These are possibilities, not certainties. Their evolution needs to be monitored, not taken for granted.

4/10  Given these outlooks, we expect the growth momentum to be more balanced with a stronger contribution from domestic demand. In our March forecast, the GDP growth for both 2018 and 2019 was projected at 4.1 percent. These figures are likely to be revised up given better-than-expected growth outturns in the first quarter this year. Headline inflation in April and May has turned up above the lower bound of our target, which is set at 2.5±1.5%, mainly due to the recent pickup in energy prices. Yet inflationary pressure remains soft overall and we must continue to closely monitor inflation developments once these supply-driven fluctuations fade. Over time, improvement in domestic demand and rising energy prices are expected to bring about higher inflation, although it is likely that headline inflation would still remain below the midpoint of the target over the year. For now, an accommodative monetary policy stance would be maintained to foster a strong economic growth and facilitate the return of inflation to the target. Going forward, the Monetary Policy Committee will closely monitor the strength of growth momentum, inflationary pressure as well as underpricing of risks in the financial system that could lead to financial fragility and financial stability concerns. Ladies and gentlemen, So far, I have given you an overall near-term summary of the Thai economy. Let me now move on to the second part of my talk which looks further into the backbone of Thailand’s economic growth engine over a longer horizon.
Zeti Akhtar Aziz: Banking on Islamic finance – from legality to economic value Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 8th World Islamic Economic Forum (WIEF) “Banking on Islamic finance – from legality to economic value”, Johor Bahru, 6 December 2012. *  *  *  Powerful forces of change are transforming the functioning of the international financial system and the global economy. In the aftermath of the global financial crisis, the quest has been to build financial systems that will best serve the real economy, that provides financial intermediation that promotes sustainable growth through productive and responsible innovation, and that will be resilient to shocks and less prone to crisis. There is tremendous potential to draw on the economic value that Islamic finance has to offer. In realising this potential, in a now more challenging environment, will depend on our capacity to build new capabilities that will unleash the inherent intrinsic value propositions of Islamic finance that supports and energises the real economy. It is my honour to participate in this 8th World Islamic Economic Forum in my hometown, Johor Bahru to speak on the topic “Banking on Islamic Finance: From Legality to Economic Value”.

As Asia makes further progress in financial reform and toward more flexible exchange rate regimes, it will be in a better position both to deal with the inevitable challenges that come with economic and financial integration, and to make the necessary transition to stronger domestic demand led-growth, which will prove a more sustainable foundation for future improvements in living standards. Thank you. 4  BIS Review 65/2007
Lower wealth, together with the widespread uncertainty over future events, may lead to companies and households postponing investment and consumption. All of this affects the activity in the economy and is something we must take into account when formulating our policy. Many measures that are taken mainly with the aim of safeguarding financial stability at the same time have monetary policy effects. For instance, measures that lead to greater confidence in the markets contribute to lower interest rates and increased access to credit. 2  BIS Review 23/2009  …and monetary policy affects financial stability. But inversely, monetary policy also has an effect on financial stability through its influence on economic activity. An economic downturn normally leads to unemployment rising and more companies going bankrupt. Households and companies find it more difficult to pay interest and amortise their loans and the banks risk facing loan losses. The banks become more cautious, require larger margins and collateral as compensation for lending money. This reduces the supply of credit, which further reinforces the downturn in economic activity. In addition, it may be the case that the banks earn less money from their lending in such a situation. Lower wealth together with greater uncertainty over future economic developments can mean that households and companies neither will nor can borrow as much. To the extent that monetary policy measures alleviate the fall in economic activity, they are also beneficial to financial stability.

Given current economic conditions, all the usual transmission channels have been clogged up. What happens when interest rates cannot be lowered any further? This is the challenge already faced in the US and the UK, and this challenge may need to be addressed by other countries in the near future. The US and the UK have begun to explore “unconventional measures” now that the traditional ammunition of lowering interest rates has been exhausted. This has included tackling the spread between commercial and government rates directly. The “unconventional” approach taken by Japan in earlier decades – namely purchasing of medium- and longer-term government bonds, is also an option, although the Japanese experience has shown that this has led to an increase in base money but did little to stimulate lending, as commercial banks have increased short-term liabilities and too many illiquid and undervalued long-term assets on their balance sheets. On the other hand, recent easing, as in the case of the US, has resulted in a more targeted, direct lending to businesses through purchases of commercial paper, and indirectly to households through purchases of mortgage-backed securities. 5. Lessons from the current crisis: where do we go from here? So what are we to do going forward on this issue of monetary policy in a globalized world? I believe that there are a few issues that need our immediate attention amid the unprecedented crisis that we are in.
Before proceeding, I will emphasize that I am speaking for myself and these views do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. Climate The U.S. economy has experienced more than $ billion in direct losses over the last five years due to climate and weather-related events.1 In addition, climate change has significant consequences for the U.S. economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity.2 For these climate-related risks, a new lexicon has emerged. Physical risk is the potential for losses as climate-related changes disrupt business operations, destroy capital and interrupt economic activity. Transition risk is the potential for losses resulting from a shift toward a lowercarbon economy as policy, consumer sentiment and technological innovations impact the value of certain assets and liabilities. These effects will be felt across business sectors and asset classes, and on the strategies, operations and balance sheets of financial firms. Risk managers must be aware of these risks and develop the tools needed to identify, monitor and manage them appropriately. Physical and transition risks may manifest through traditional risk stripes such as credit, market, operational, legal and reputational risk, but today’s tools are not necessarily well-suited for the unique challenges associated with climate change. Let me mention three of these challenges. First, climate change is a long-term issue where actions today are likely to have an impact over many decades.

More importantly, while EMEs accounted for about 55% of global GDP since 2009, their contribution to global economic growth was as high as 80%. So, a slowdown in EMEs will be an impediment to recovery in the US and other advanced economies. 15. Fifthly, zero interest rates and QE have indirectly widened the income gap. Because of ultra-low interest rates and excess liquidity seeking better returns, stock and property markets rallied in many parts of the world. This is especially true in places with more promising growth prospects like Mainland China, Hong Kong and Singapore. However, lowincome groups, with little if any stocks and properties, have missed out altogether. And their savings in deposit accounts have earned next to nothing. This has exacerbated inequality, resulting in negative implications for social stability and harmony. 16. Sixthly, zero interest rates and QE have changed the global investment environment. Yields on the traditionally more conservative bonds and fixed income investments have declined. For example, 10-year US Treasuries’ yield has fallen from 5% to about 2%, and some sovereign bond yields in the Eurozone have even plunged into the negative. At the same time, both the exchange rates and bond prices in EMEs have experienced sharp swings recently. With the soon-to-start normalisation of US interest rates, and distorting low-returns and high-volatility in the bond markets, the investment environment will become even more complex and difficult. 17.
Spencer Dale: The UK’s economic recovery – why now; will it last; and what next for monetary policy? Speech by Mr Spencer Dale, Executive Director, Monetary Policy, and Chief Economist of the Bank of England, at the Confederation of British Industry (CBI) East of England Midwinter Lunch, Newmarket, 13 December 2013. *  *  *  I would like to thank John Lewis, Matt Trott and Gavin Wallis for their considerable help in preparing this speech. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. I thought I would start today with a short reminiscence about the late Eddie George, who was Governor of the Bank of England between 1993 and 2003. Soon after becoming Governor, Eddie gave an interview in which he was asked how he would judge the success of his Governorship. Now this was before the advent of the Monetary Policy Committee, so he couldn’t frame his response simply in terms of hitting the inflation target. Instead, Eddie replied that “My personal ambition is that the rate of growth of output should be above the rate of inflation for three years in a row”.1 At the time, this seemed a fairly tall order: prior to Eddie taking over, this hadn’t been achieved even once since the Second World War. But as it turned out, growth was stronger than inflation in every single year of Eddie’s 10-year reign. And that continued for the next few years after he’d retired.

5  Bloom (2009) shows that higher uncertainty tends to lead to lower investment because it widens the “zone of inaction” associated with companies waiting for the economic environment to move decisively in once direction or the other. The partial irreversibility of investment means that there are more companies at the margin deciding whether to invest than those at the corresponding disinvestment margin. Widening this region of inaction causes more new investments than disinvestments to be cancelled, and hence lowers total investment. BIS central bankers’ speeches  3  successful companies with the brightest futures that are likely to be most affected in this way, since they have the most to lose.6 As I said, the good news is that the cloud of uncertainty has started to lift. And just as heightened uncertainty greatly amplified the downturn, this reduction in uncertainty can provide a powerful spur to the recovery. This leads to our second question for today: will the recovery last? Will it last? The reduction in uncertainty and the easing of credit conditions appear to have started to unlock pent-up demand and so fuel a recovery. That recovery to date has been largely driven on the household side: high-street sales have increased modestly as consumers have spent a greater share of their pay, and investment in residential housing has increased significantly.
This issue is of course further off in the future, and definitely not for this year. However, when the time comes, we will need to find the optimal balance between the level at which rates are stabilised, and for how long, as in a long distance race where you need to balance pace and distance. When we are sufficiently confident that we have reached the right rate level, it might be a good idea to give guidance on the criteria determining how long we stay there. The key criterion here seems to me to be a return to an inflation outlook that is compatible with our 2% target, firmly and durably. Firmly in the sense of being supported by actual data on headline inflation but also on underlying inflation. Durably in the sense of being well ahead of the end of our projection horizon, and including, in my view, a decline towards 2% of households’ and businesses’ inflation expectations. Before concluding, however, we need to shed more light on two key elements of this economic narrative: underlying inflation and economic agents’ expectations. The different measures of underlying inflation The aim of underlying inflation measures is to better estimate the change in the persistent component of inflation, which corresponds to “trend” inflation. 14  Page 15 of 19  The standard measure of this is “core” inflation” (in other words excluding energy and food which are the two most volatile components).

4 For an analysis of the dynamics of the money supply during the public health crisis, see Bê Duc, Bricongne, Bussière, Jude, Penalver, Sédillot, Vari and Wicky, “The increase in the money supply during the Covid crisis: analysis and implications”, Banque de France Bulletin No. 239, 2022. 2  3  Page 4 of 19  The expectations channel While the steering of monetary aggregates has become less important, the steering of inflation expectations has gained significant ground in modern monetary theory, especially since the work of Michael Woodford.5 These expectations play a key role – be they those of the financial markets in determining the level of interest rates, or those of economic agents (businesses and households) in guiding decisions on future prices and wages. I shall come back to the expectations of households and businesses later on, as they are more difficult to measure and influence. At this stage I would like to concentrate on market expectations, and the way in which the central bank should guide them. The essential variable here is the credibility of its communication and action. This credibility is underpinned first by a solid institutional foundation: I would just like to point out that this year marks the 30th anniversary of the law of August 1993 granting  5  Michael Woodford, Interest and Prices: Foundations of a Theory of Monetary Policy (2003), Princeton University Press. 4  Page 5 of 19  the Banque de France its independence.
Around 200 of our colleagues studied for degrees or professional qualifications in 2016 and 670 re-skilled through internal job moves across directorates. And since new skills can also be acquired outside the day job, we are increasing our support for community volunteering and engagement. We are encouraged that at the last count, over three quarters of our staff believe that the Bank offers good opportunities for learning and development. That’s a six percentage point improvement on the previous year and 20 percent higher than the UK average. xxii  We can’t take this progress for granted, however, and need to redouble our efforts to build a more inclusive culture at the Bank. Inclusive culture  Having attracted a diverse workforce, we must enable and encourage participation. We are striving to create a more inclusive environment where different working patterns are accommodated, people can debate, challenge and present ideas, and are supported when undertaking new and innovative work. Inclusion Fortnight, with 21 events over ten days across three sites, attended by almost 1700 people is the latest example of this commitment. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  An inclusive culture is essential to realise the benefits of our aim to be ‘One Bank’. We are working to create a more agile work environment, which encourages cross-disciplinary and cross-team working further supporting the development of new ideas and approaches.

But, there are also costs of being the dominant reserve currency. For example, this can lead to shifts in the valuation of the dollar that are due primarily to developments abroad that affect risk appetites and international capital flows. In such cases, the dollar’s valuation can be pushed to levels inconsistent with U.S. economic fundamentals. For the United States, I believe that the most important goal must be to keep our own house in order. If we do this, then I expect that the U.S. dollar will earn the right to remain the most important reserve currency in the world. The United States has a number of advantages in sustaining the dominant reserve currency status of the U.S. dollar. First, there is a first-mover advantage. As the leading reserve currency in the world, there is no strong incentive for countries to move to other currencies as long as the dollar continues to have the attributes I discussed earlier. The history of reserve currency usage is characterized by considerable inertia. The U.S. dollar emerged as the leading reserve currency quite a bit after it became the world’s largest economy. Typically, the loss of dominant reserve currency status requires either substantial economic decline or political instability that motivates foreign counterparties to shift to a new reserve currency. Second, the U.S. has the deepest and most liquid capital markets in the world. This is important in making U.S. Treasuries and agency mortgage-backed securities attractive holdings as part of countries’ foreign exchange reserve portfolios.
Firms’ compliance with PPP and supervisory review or firm-by-firm regulatory intervention under Pillar 2 of the Solvency II framework are all important to manage concentration risk. But we should not have to rely on the PPP to compensate for perverse incentives that the quantitative capital rules under Pillar 1 might create. A robust and coherent Pillar 1 needs to play the primary role in incentivising prudent risk management practices in the first instance and to work in concert with Pillar 2 measures. The ongoing work on Solvency II reform plays a part in this. In order to enhance our understanding of the risks and the most appropriate ways to address them, the PRA will engage with insurers and other stakeholders, including international regulatory colleagues. Our own work on concentration risk will examine the need to tighten controls on recognition of reinsurance structures and volumes to mitigate systemic risks to policyholders. Page 9  Undertaken within a robust framework for the management of counterparty concentration and recapture risk, reinsurance can continue to deliver the global diversification that is at the heart of insurance, and which allows the insurance industry to play its part in helping individuals and businesses to navigate a world of uncertainty. Thank you. I am grateful to Wendy Fu, Alwin Luchmaya, Dean Minot, Charles Adam, Hannah Rashid, Alan Sheppard and Miranda Hewkin Smith for their assistance in helping me prepare this speech. 1.

The Matching Adjustment allows insurance companies to recognise as capital up-front a part of the income they expect to earn on their assets in the future, as long as they can show that the cashflows they expect to receive from those assets closely match the payments they have undertaken to make to their policyholders. 10. This would be the case if insurers were to agree to reinsurance contracts with collaterals such as asset backed securities and collateralised loan obligations, non-GBP illiquid assets and FX exposure. 11. McKinsey’s Private Markets Annual Review | McKinsey  , Exhibit 4. 12. As a reminder, firms must comply with the PRA’s Restriction of Business rules and ensure that it does not carry on any commercial business other than insurance business and activities directly arising from that business. 13. SS3/17 'Solvency II: Illiquid unrated assets' 14. Four Rs: Creating the conditions for long-term sustainable growth in the life annuity sector – speech by Charlotte Gerken 15. Solvency II | Eiopa 16. SS1/20 Solvency II: Prudent Person Principle  Annex