samchain/econo-pairs-v1 huggingface dataset:
Figure 1: Annual CPI Inflation and Target Path 12 11 10 9 8 7 6 5 4 3 2 1 0  12/08  09/08  06/08  03/08  12/07  09/07  06/07  03/07  12/06  09/06  06/06  03/06  12/05  Annual CPI Inflation Target Path Uncertainty Band  Source: TURKSTAT, CBT. Prolonged increases in food, energy and commodity prices have recently led to upward pressure on headline inflation and in turn to upward revisions in inflation forecasts in many countries across the world. Turkey is not an exception in this regard, as the deviations of inflation from our forecasts can be mostly attributed to these factors. For instance, our  BIS Review 62/2008  1  forecasts in the October 2006 Inflation Report suggested that inflation would converge to the 4 percent target at the end of the first quarter of 2008. The forecast was based on a scenario in which food inflation moderated to levels comparable with medium term targets and oil prices remained stable at 60 USD per barrel. However, oil prices continued to rise and averaged around 100 USD per barrel in the first quarter of 2008. Moreover, annual food price inflation has continued to remain at elevated levels, reaching 13.4 percent in March. As a consequence, 6.13 percentage points of the 9.15 percent annual CPI inflation in March came from food and energy items (Figure 2).

I understand that some of your work depends on responses by us – I can assure you that we will be making our best endeavours to react quickly and make any remaining decisions or give necessary guidance as soon as we are able. As Governor Mark Carney noted in his speech in September, the PRA will not hesitate to withhold approval for inadequate or opaque models. The responsibility to meet the Solvency II Tests and Standards rests solely with firms and their senior management. Although the Bank will continue to work with firms as they finalise their models, be under no illusion that each model will be assessed comprehensively and objectively against the full Tests and Standards, and that those failing to meet the requirements will not be approved. We have to get this right and can’t allow weak models to go into live. 2  BIS central bankers’ speeches  IMAP firms must ensure that they have contingency plans in place so that they are still able to meet the 1/1/16 implementation date in the event that their model fails to be approved. For all firms, there are important deadlines to be aware of in relation to reporting and nonIMAP approval permissions, which will be discussed in the sessions later today. We are implementing new IT and data collection systems and will be ready to accept the submission data required under the directive from June 2015.
Commodity price changes with relatively more of a permanent nature may distort the general pricing behavior and initiate a wage-price cycle. This may entail prolonged upward movement in inflation in general and, accordingly, the high costs associated with this. Therefore, to be able to contain the potential second-round effects due rises in commodity prices, it is important for central bankers to pay close attention to core inflation indicators and inflation expectations, and shape their communication policy in this direction. BIS central bankers’ speeches  1  We, as the Central Bank of the Republic of Turkey (CBRT), are also in the position to carry out the abovementioned analyses. As a matter of fact, in our Inflation reports as well as the Summary of the Monetary Policy Committee (MPC) meetings, we share with the public, our assessment of the nature of commodity price changes. In the Inflation Report published in January 2012, we made the following assessment on oil prices: “Another risk factor in the forthcoming period is the uncertainty regarding oil prices. Although the weak course of the global economy dampens commodity prices, recent manifesting problems regarding oil supply pose upside risk to energy prices.

Just the reverse, I would say, in the light of quite a few years in the vicinity of decision-making in economic policy. Economic outlook in the coming years A suitable starting point for a discussion of the economic future is the October Inflation Report. Our assessment there assumed that international economic activity will tend to slacken but still remain relatively strong. We counted on GDP growth in the OECD area being 3.8% this year, followed in the next two years by 3.0 and 2.7%, respectively. Inflation would remain relatively low, partly in view of strong competition in the international markets. Growth in Sweden was judged to be 4% this year, 3.7% next year and 3.0% in 2002. Domestic demand growth would be relatively high for consumption as well as investment. A damper was expected, however, from an appreciation of the krona. A gradual increase in inflation was predicted, so that two years ahead the rate would be approximately in line with our target. As usual, we identified various risks in our forecast. One was the possibility of the oil price staying at a high level. We also considered that the exchange rate might be weaker than economic fundamentals in Sweden would warrant in the longer run. Another risk was that of higher wage increases. It was conceivable that the wage rise would be even higher than the annual rate of just over 4% we had assumed for the coming two years, due, for example, to far-reaching demands for compensation and parity.
In our experience, inflation targeting is capable of producing a sufficiently strong nominal anchor for the economy, and consequently also of stabilising the exchange rate, obviously in the absence of large external shocks. Hence, in favourable circumstances, inflation targeting will allow us to achieve price and exchange-rate stability simultaneously. Should circumstances become less favourable, the simultaneous achievement of both will be difficult no matter which monetary strategy is adopted. That is why we do not consider ERM2 to be a policy regime superior to the current regime. In line with this stance, we have agreed with the government to stay out of the ERM2 mechanism for the time being. We plan to introduce ERM2 after conditions for meeting all Maastricht criteria within a two-year timeframe have been established. There is still a number of issues to be discussed, let me address two of them. First, is inflation targeting compatible with ERM2? Second, what is the impact of policy debate about the modifications to the SGP on our forthcoming effort to meet the Maastricht criteria? As far as the compatibility of the two regimes is concerned, namely inflation targeting and ERM2, the specific arrangements have not yet emerged from our ongoing debate. We believe that relying on the economic analysis and intuition rather than on background legal documents as a guide, there is no need to modify the current strategy significantly. It will be able to deliver both price and exchange-rate stability. However, monetary policy alone cannot guarantee the smooth progress of adopting the euro.

Sri Lanka, India and Iran have completed their Stage I payment reforms. Pakistan is in the process of completing Stage I, while the other SAARC countries are now taking steps to modernize their payment systems. The maintenance of a safe, sound and efficient payment system is a responsibility of the central bank as many of our central banks have increased focus on wider financial system stability as one of their core objectives. In that context, central banks are called upon to coordinate payment initiatives at national, regional and global levels to ensure that there are appropriate mechanisms for smooth payment flows. 2. Why payment systems are critical to regional development? Payment services are highly integrated and interdependent systems comprising payers, payees, payment instruments, financial intermediaries, markets, service providers, technical infrastructure, legal and regulatory systems and organizational structures. The public policy objectives common to all stakeholders are to enhance public confidence, safety, integrity, access to finance and efficiency of payment systems. Therefore, we need to facilitate cross border trade and investment flows through appropriate payment instruments, clearing mechanisms and settlement systems. In a globalized and highly integrated world, financial sector development is closely associated with cross border flows, including foreign direct investment which is critical to developing economies. Most of us in the SAARC region are FDI recipients.
Conclusion In conclusion, let me simply say that the dawn of the twenty-first century is a time of unprecedented opportunities and unique challenges for financial institutions and supervisors alike. In meeting the challenges posed by technological advancements and the rapid innovations they enable, and in pursuing the objective of a modern, flexible yet stable financial system, we must acknowledge that both the public and private sectors have a critical role to play. While the perspectives of market participants and official supervisors may differ from time to time, our objective is the same – to maintain a strong and vibrant financial system. Indeed, it is evident to me, as a former commercial banker and now as a supervisor, that only if we work together, each meeting our responsibilities and reinforcing the other, will we be able to successfully manage a rapidly evolving, ever-more complex financial services industry. BIS Review 75/2000  10

Unlike earlier episodes of high oil prices, which were driven largely by temporary supply constraints, the recent increase in the demand for oil has been reflected in higher prices for future delivery as well as higher spot prices. Similar rises are apparent in the market for gas. The signpost marked higher energy prices points us towards ways of using less energy, to alternative energy sources and to new sources of oil production such as the Canadian tar sands. BIS Review 9/2006  1  The first two signposts point us in the right direction. But the path has not been easy to follow. We have seen movements - in both directions - in inflation, consumer spending and output growth. Interest rates too have moved both up and down in order to maintain overall stability of the economy by keeping consumer price inflation close to the 2% target. The reasons for those changes have been explained in the minutes of the Monetary Policy Committee meetings and in our Inflation Report. Tonight, I want to look a little further ahead, to the challenges for monetary policy posed by a third signpost - the recent fall in long-term interest rates. The development of an integrated world capital market means that these now depend on savings and investment decisions elsewhere in the world as well as here at home. Investors seem to be willing to lend to governments at much lower interest rates than for many a year.
This is hardly surprising given that housing loans constitute the larger part of credit extended to households. Now that the world economy is trying to shrug off the consequences of the liquidity crisis of late summer and falling house prices in America, the question as to how sound housing finance in converging CEE economies really is has become substantial. A reassuring answer to that question comes out of the analysis in a paper 7 presented in Session 4, which focuses on house prices in the CEE economies. The analysis has shown that the very rapid house price increases in our region have generally been based on fundamental factors: a boost in housing demand due to rising per capita GDP, falling real interest rates and demographic factors, coupled with the rapid development of housing markets and housing finance, virtually non-existent in the era of central planning. All in all, the house price inflation in the region seems to reflect a process of relatively fast convergence to a new equilibrium. Again, however, the question remains open whether that new equilibrium has already been reached or perhaps even overshot in some economies, and whether the rapid growth in mortgage loans that is a natural consequence of the housing boom can be safely described as sustainable. Experience has taught us that rapid credit growth cannot be ignored even if it reflects nothing more than a convergence process, as it usually means that loans have been extended to households with ever lower margins.

Unless the successful demonstrate compassion and help the less successful, it will be difficult to maintain social cohesion and harmony. 5. Philanthropy complements government measures to help the weak and the poor. As a voluntary act, it has the potential to be much more targeted, and if done correctly, creates meaning and social value for the giver and the recipient. Growth in philanthropy 6. Today, the world’s philanthropists are in a better position to help than ever before. The World Wealth Report by Capgemini and Merrill Lynch estimated that the world’s wealth grew 72% over the past decade to $ trillion; Forbes magazine now counts more than 1,200 billionaires on the planet. 7. I am glad to say that philanthropists worldwide have been stepping up and giving generously. Leading the way is the United States, where annual giving rose from a mere $ million to more than $ billion over the last 20 years. Rising wealth in Asia has also led to greater giving. The 2010 Hurun Philanthropy List in China found that its top 100 philanthropists gave an average of 6 percent of their wealth to charity, totalling $ billion over the previous five years. Similarly, in India, many of the ultra-rich are giving part of their wealth to charitable causes. Among them, Mr Azim Premji, the third richest man in India, pledged $ billion last year to fund rural education and development programmes. 8. Philanthropy in Singapore is also growing. Some recent foundations that have been set up in Singapore include the Wee Foundation.
In addition, we might choose to include effects on the payment system and on general economic performance if, for instance, we saw a significant risk of a future financial crisis. The clarification of our monetary policy that we published in 1999 states that we would explain clearly the reasoning behind our decision if this situation were to arise. Naturally, this question - of whether the risks are sufficiently large to require special consideration in the monetary policy decision - is not a simple one. It concerns weighing up difficult issues about which opinions may differ from time to time. So far, however, considerations with regard to the effects of house prices and household indebtedness on factors other than the inflation rate have only played a marginal role in interest rate policy. Inflation and monetary policy Let me conclude with a summary of my current views on inflation and monetary policy. Since the early summer, inflation in Sweden has developed roughly in line with the Riksbank’s assessment in May. Inflation is low both by Swedish and international standards, at around 1 per cent. At the same time, it is important to emphasise that the decisive factor for monetary policy is not the present inflation rate, but our views regarding future inflationary pressures. At our monetary policy meeting in May, the Riksbank judged that inflation would remain relatively stable over the coming year and then increase gradually as a result of rising international and domestic resource utilisation.

At a more structural level, the BOT can also act as a catalyst to help enhance competitiveness and augment economic adaptability. One key avenue is through fostering financial sector development. Here, the main thrust of our policy focus will be to enhance the effectiveness of the financial sector in serving as intermediaries of capital through further liberalization. The aim is to achieve improvements in four key dimensions. They are: (1) greater financial innovation and expansion of available financial instruments; (2) broader choice of services to suit households and firms’ needs; (3) lower costs of such services; and (4) improvement in financial access. Starting with the banking sector, which plays the most prominent role in our financial system, we will be taking steps to enhance competition. In the spirit of progressive liberalization under the ASEAN Economic Community (AEC), Thailand’s formula for the banking sector will be guided by the second Financial Sector Master Plan. This year, we enter the second phase of this plan, which would allow existing foreign bank branches and subsidiaries up to a maximum of 20 branches and 20 off-premise ATMs. New service providers may be allowed under a restricted license to close any remaining gaps in the system. In the final phase in 2014, additional new licenses may also be considered. Complementing this push will be efforts to boost financial market development through a more streamlined capital account and foreign exchange regulatory regime.
The economic convergence criteria ensure that the applicant countries have established economic conditions that are conducive to the maintenance of price stability and the  2  BIS Review 17/2008  coherence of the euro area. The framework of analysis comprises developments in prices, fiscal balances and debt ratios, exchange rates and long-term interest rates, together with other factors. A number of general rules are used in the application of these criteria. 1. The individual criteria are interpreted and applied in a strict manner. 2. The criteria constitute a coherent and integrated approach. They must all be satisfied. The Treaty lists the criteria on an equal footing and does not suggest a hierarchy. 3. The criteria must be met on the basis of actual data. 4. The application of the criteria should be consistent, transparent and simple. 5. Convergence must be achieved on a sustainable basis and not at a given point in time only. This approach is firmly based on economic arguments. It is generally recognised that a monetary union requires sustainable macro-economic convergence among the participating countries. Once a country joins a monetary union, it loses the possibility to use the nominal exchange rate as an instrument to correct a loss in competitiveness. As monetary policy decisions in the EMU are taken in the light of the economic conditions prevailing in the entire area, economic convergence is required to ensure that a country’s economy is sufficiently prepared for the monetary union.

In November 2000, the ECOFIN Council – bringing together the Economics and Finance ministers of the EU Member States – formally adopted the position that unilateral euroisation is not compatible with the Treaty and cannot be a way to bypass the convergence process foreseen by the Treaty for the adoption of the euro. The ECB fully subscribes to this position of the EU Council. Allowing a Member State or a future Member State to take a “short-cut” to the euro, rather than following the official roadmap, could be detrimental to that country and possibly the euro area. Because 1.  a sustainable convergence that is conducive to the maintenance of price stability and the coherence of the euro area may not have been achieved. 2. It would breach the principle of equal treatment. 3. It would not ensure that the country in question pursues the right policies to thrive under the euro. This raises the question of the approach to be taken towards countries, which would in principle qualify for EU membership (Art 49 TEU) but do not formally aspire to join the EU and are thus not candidate countries. This is the category of countries like Iceland. Here, both the rule of law and the principle of equal treatment provide answers. 1. The Treaty does not provide a framework for euro adoption by non-candidate countries.
BIS Review 64/2006  3  Table 1: Estimated relative size of economies in 2005 and 2050 (US = 100) Country  2005  2050  GDP according to estimates of the buying power parity 2005 2050  USA  100  100  100  100  Japan  39  23  32  23  Germany  23  15  20  15  China  18  94  76  143  UK  18  15  16  15  France  17  13  15  13  Italy  14  10  14  10  Spain  9  8  9  8  Canada  8  9  9  9  India  6  58  30  100  South Korea  6  8  9  8  Mexico  6  17  9  17  Australia  5  6  5  6  Brazil  5  20  13  25  Russia  5  13  12  14  Turkey  3  10  5  10  Indonesia  2  19  7  19  (index for the USA = 100)  GDP according to market US dollar FX rates  Source: Estimates of PricewaterhouseCoopers.

Also, the Bank of Albania reviewed its regulation on the required reserves of banks, raising their flexibility in the manner of holding it and creating more opportunities in increasing the banking sector’s exposure to the economy. *** Another important aspect of the central bank’s functions is the banking system supervision and regulation, which contributed significantly to strengthening of the financial stability. In the following, I will focus on performance of some key indicators and banking system risks, as well as on the most important developments in supervision, licensing, legal and regulatory framework. 2. Banking supervision and financial stability  Banking sector assets to GDP accounted for 87.9% at end-2012, up by 3.1% on a year earlier. Profit improved, leading to improved indicators of Return on Average Assets (RoAA) and Return on Average Equity (RoAE). At end-2012, the banking system capital adequacy ratio was 16.2%, increased on a year earlier. At system level and for each individual bank, this indicator remained above the 12% minimum requirement. Supervision has aimed at assessing and monitoring the risks posed to the banking system. Special attention has been paid to monitoring the loan portfolio quality and the systemic risks stemming from lending, as well as to their actual or potential effects on the degree of banking system capitalisation. The banking system exposure to credit risk increased in 2012. The ratio of non-performing loans to total loans was 22.5% at year-end, from 18.8% a year earlier.