samchain/econo-pairs-v1 huggingface dataset:
In view of what has already been said, it is clear that industry and business in Iceland has to prepare itself for a higher exchange rate than would have been the case without this major development. It naturally demands careful management and cost-cutting in operations where required. As mentioned previously, the Central Bank of Iceland now practices inflation targeting intended to keep inflation as close as possible to 2½% per year. The Bank’s latest forecast predicts that inflation will be slightly below this mark during the next two years, or just over 2%. Following this forecast, the Bank cut its policy rate by 0.5 percentage points.. All other things being equal, this will mean that inflation will be slightly higher than that assumed in the forecast. Were interest rates to be lowered significantly from the current level, it would very likely set off a new wave of inflation and instability, which would be to the advantage of neither wage earners nor industry. As mentioned, there seems to be some overestimation of the possibility of the Central Bank to control the market rate of exchange. But, as was also pointed out, the Bank’s intervention on the foreign exchange market, expending large sums in 2000 and 2001, had only a short-lived effect. In this connection, it should also be noted that since last autumn the Central Bank has regularly purchased foreign currency in the domestic interbank market.

It is for this reason, for example, that the Bank of Zambia has supported the work of journalists in understanding economic issues and supported their associations in improving the standard of journalism in Zambia. Further, the Bank of Zambia publishes its own inhouse magazine “THE ZAMBANKER” as well as more technical economic articles mainly written by staff on topical issues in the Zambian economy in “THE BoZ READER”. Although most of the articles have been written by staff in the Bank, we have always encouraged the public to contribute articles on issues relating to the Zambian economy. In this regard, I wish to once more extend an invitation to you all to contribute articles for publication in the ZAMBANKER or indeed the BoZ READER. BIS Review 74/2008  1  Distinguished Guests, In order to effectively address the issue of how to secure a sustainable economic future, the first point of call must surely be to address the issue of illiteracy in Zambia. A good number of our citizens especially those living in the rural areas are not able to read both in English or local languages. This is a major hindrance to sustainable economic development, as it makes it very difficult to transfer new technologies and skills to the rural populace – skills that are critical in improving health and education outcomes and harnessing the tremendous potential that this country possesses. The scenario in the urban areas, though slightly better than the rural areas, still leaves much to be desired.
It is against this background that the MPC in August decided to provide some explicit guidance about the considerations that will inform our policy decisions over the coming months. In particular, we wanted to signal that we would not immediately begin to withdraw the considerable monetary stimulus injected after the financial crisis simply because growth had picked up. Rather we wanted to make clear our intention to maintain the stance of policy until it was clear that the recovery was well entrenched and the margin of economic slack had been substantially reduced, provided doing so did not entail material risks to price stability or financial stability. As you will all know, we implemented that by committing not to raise Bank Rate until after the unemployment rate has fallen to 7%. This is a little higher than our current estimate of around 6.5% for the medium-run equilibrium rate of unemployment – that is, the sustainable unemployment rate once nominal rigidities and other transient factors have worked their way  2  BIS central bankers’ speeches  through. In the long run, one would expect the sustainable rate to be even lower, as workers who have become disconnected from the labour force are encouraged back into it. Specifying our guidance in terms of the unemployment rate, rather than, say, some estimate of the output gap, makes particular sense because of the uncertainty surrounding the achievable level of productivity in the economy.

In any case, as a breach of the threshold becomes imminent, it seems likely that the Committee will wish to provide further guidance on the future determinants of policy in order to reduce any uncertainty surrounding our reaction function. Can we say anything yet about the effectiveness of the introduction of forward guidance? As already noted, the primary objective is to give confidence to business and households that policy will not be tightened until there is a material reduction in economic slack (assuming that neither price nor financial stability are threatened) and to prevent an excessive snapback in market interest rates taking place simply because a recovery is under way. As far as the broad message to businesses and households goes, contacts of the Bank’s Agents suggest that businesses have got the message that the MPC will only begin to tighten policy once the recovery is entrenched and slack has been materially reduced. And in the period after the MPC’s announcement, the Markit Household Finance Index suggested that households expected Bank Rate to rise later than before, although the date has since come back in again, perhaps reflecting the continued flow of positive data. At first sight, the evidence from market interest rates is more equivocal. Chart 5 shows the instantaneous forward yield curve in May, August and today. Yields have risen substantially since May. On the face of it, that appears to suggest that the guidance has not been very effective at influencing the expectations of market participants.
As documented recently by my MPC colleague Steve Nickell,9 retailers’ margins were compressed in the years around the turn of the century. Since then, they seem to have crushed their costs through measures delivering rapid productivity growth. In part, that appears to have been achieved by disintermediating wholesale distributors, whose margins have continued to fall (Chart 15). At a macro level, the effect was, for a period, to open up a gap between producer output price inflation and retail goods price inflation (Chart 16). In other words, for a while some structural changes in the distribution sector reduced the feed through of demand pressures into retail price inflation. Looking ahead, one downside risk to the MPC’s central projection is that we cannot rule out that this process has further to go. The current conjuncture and policy Monetary regime change, labour market reform, financial innovation, the technological revolution, globalisation – it is a heady combination, which unavoidably adds to the challenge of discriminating between cyclical and structural influences when forming a view on the macroeconomic outlook. But it is equally unavoidable that policymakers must try to do just that. That brings me to the current conjuncture and so to policy. My own take at present is as follows. In my judgment, there is, on balance, most likely a degree of excess demand in the economy. Surveys suggest above-average capacity utilisation.

The transformation of Institut Bank-Bank Malaysia (IBBM) – the industry’s former training outfit, into AICB – the new professional body for the banking sector, in 2013 was an important step in this direction. The AICB champions the vision of professionalising bankers and advocates for high standards of professionalism via the introduction of its new membership framework, subjecting its members to a strict code of conduct, professionalism and ethics. Every effort now needs to be made to build on, and elevate further, the quality and value of AICB’s award of the Chartered Banker qualification so that it can be truly regarded as a gold standard for the banking professionals. In this regard, the banking industry ought to give appropriate recognition to individuals and staff who attain this prestigious qualification. Of equal importance is the demand for higher and specialist skills for high value added jobs, there are also merits in introducing more specialised qualification and certification according to functional areas or business lines, beyond the current certification offerings for treasury traders and credit officers. The suite of qualifications and certifications would then allow the banking profession to raise the bar of competence higher across sector. In taking on its mandate as the training and educational institution for the industry, we envisage the ABS to play a central role in supporting AICB as its premium learning partner in the move toward professionalising the banking sector.
But it is the further decline in interest rates since the crisis 7 that I am focussed on today, and it suggests a further shift towards a desire to save rather than invest over that period, driven by forces other than those long-running trends. There are (at least) three interpretations of this further shift: •  The first is that market participants (ultimately representing the interest of savers and investors) believe that the cyclical forces which currently warrant very low levels of Bank Rate will persist for decades to come. Put another way, that we are entering a period of secular stagnation or chronic demand deficiency. 8  •  The second is that what we are witnessing is typical of a “balance sheet recession”. 9 As we know, recessions that are preceded by a large build-up of credit tend to be followed by more severe and prolonged downturns. 10 One reason is that economic actors tend to focus on reducing debt levels to the detriment of projects that would otherwise be expected to have a positive net present value. In such a situation the interest rate required to clear the market for savings and investment can be very low indeed. •  The third interpretation is that financial market participants do not have a particularly gloomy central expectation for the path of the economy over the coming decades,  4  Rey (2013). 5  Source: United Nations http://esa.un.org/wpp/excel-data/population.htm.

Minouche Shafik: Interpreting the yield curve – warning or opportunity? Speech by Ms Minouche Shafik, Deputy Governor for Markets and Banking of the Bank of England, at the Association of Corporate Treasurers Annual Conference, Manchester,  22 May 2015. *  *  *  Accompanying charts can be found at the end of the speech. The views in this speech are my own, and not those of the Bank of England or the Monetary PoIicy Committee. I would like to thank Ben Broadbent, Ronnie Driver, Kristin Forbes, Grellan McGrath, Martin Weale and Chris Young for their comments. It is a pleasure to be here. I would like to talk today about long term borrowing rates – a topic that I am sure is often on the mind of a corporate treasurer. I have been thinking about this issue since I joined the Monetary Policy Committee (MPC), as not only are long yields an important input to current financial conditions, but – carefully interpreted – they can offer an insight on future developments too. I have been waiting to find a group who might be as intrigued by it as I am, so I jumped at the chance to speak to the Association of Corporate Treasurers. The yield on nominal 20-year UK government debt peaked at around 17% in 1974. After that long term yields began a period of decline which continued right up to the mid 2000s (Chart 1).
Wage moderation is a key factor in favouring the expansion of employment and in helping to create the conditions for a sustainable increase in the potential growth rate of the euro area economy. Current estimates for trend potential growth in the euro area are in the order of 2-2½%. There is much scope for raising potential growth in the euro area. The ECB will make its contribution by focusing on maintaining price stability in the medium term. But other policy actors also have to take up their responsibilities. The Broad Economic Policy Guidelines for 2002, which have just been approved in Seville, place the emphasis quite rightly on the need for further structural reforms in the euro area. I understand that this view is also shared in the draft resolution. The future welfare of euro area citizens will also depend to a large extent on the prudent conduct of fiscal policies. The solidarity pact of our monetary union requires all participants to maintain a mediumterm perspective in compliance with the framework of the Stability and Growth Pact. This implies that budgetary positions in all countries should be close to balance or in surplus over the business cycle as a whole in order to allow sufficient room for a smooth functioning of automatic stabilisers. We have seen some worrying developments in fiscal policy in some countries over the last few months.

I have already outlined the broad changes that are being considered. It is, however, important to emphasize that for the emerging and developing economies, particularly those in SSA, these measures to reform the international financial architecture need to be carefully considered to ensure that they build on the strong foundation for economic growth that has been laid over the past decade. I thank you for your attention. BIS Review 63/2010  5
The banking sector liberalization agenda includes discussion on harmonized standards of regulations, which is key criteria for licensing, as well as financial stability arrangement. This will be finalized this year, with timeline of liberalisation in 2014 to 2020, depending on country’s readiness. Capital market integration will also be important to ensure that regional market becomes deeper and wider, to serve growing needs of growing and large investment projects to link up the region’s production and infrastructure. Moreover, it will also help to intermediate capital inflows into the region in a more efficient and stable manner. Regional capital market will also be important for managing the growing pension funds of the region, where some countries are facing growing savings but aging population. It will offer a regional alternative to the currently fragile market in the west. How well prepared is Thailand for this? The banking system already has high degree of foreign participation. Market share of foreign banks and hybrid banks is 20 percent. The foreign banks also accounts for about 50 percent of transactions in OTC derivatives market here. These main players in foreign and hybrid banks include banks from the UK, EU, US, Japan, and China, as well as banks from Singapore and Malaysia. Thus, the banking system and Thai banks are familiar with international competition. Thai banks already have presence in all ASEAN countries, except Brunei. And for this, the AEC will help reduce barriers and enhance business operations of Thai banks abroad.

Production constraints continue to ease, while private sector demand is back on track. The growth momentum in the period ahead is likely to sustain, driven mainly by domestic demand. We expect that economy will grow at 5.7 percent this year and 5.0 percent next year. This episode of rapid growth recovery is that it also witnessed macroeconomic stability. Thailand has a long history of low and stable inflation, averaging around 3 percent over the decades. The unemployment rate in recent years has also been low at around 1 percent. Meanwhile, external position remains solid with moderate short-term external indebtedness. The banking sector has been safe and sound with sustained profitability amidst the ongoing global financial crisis. Despite capital inflows into Thailand, there appears to be no sign of asset price bubble while the degree of leverage in the corporate and household sector is still low. Such promising outlook is reflected in Thailand’s sovereign credit rating which has been stable at investment grade despite intermittent political tension. At this juncture, please allow me to highlight a number of Thailand’s fundamental strengths that underpin this positive outlook. First, our corporate sector remains competitive with accumulated robust savings and profitability. This fact is well evidenced by their healthy balance sheets and their ability to explore investment opportunities overseas. Net profit of most listed companies in the second quarter 2012 turned out be positive despite damages inflicted by the floods.
Private regular pay growth is currently running at 3.7% year on year. The reasons for this rise can also be found, to some extent, in job dynamics. There is only modest evidence that those moving position are climbing the ladder any faster. But it is notable that, as the labour market has tightened and skill shortages have emerged, we have seen pay growth among stickers beginning to rise after a long period of tranquillity. In other words, employers’ increased appetite to retain staff, and employees’ increased willingness to consider moving, appears now to be affecting pay. This might also help explain why, although pay has picked up (as stickers are rewarded not to move), there is little sign so far of productivity following suit (as job moves towards higher-productivity firms have not picked-up). With productivity subdued alongside higher pay, growth in annual unit wage costs is now running at elevated levels of over 2 ½% year on year.21 That is in excess of levels consistent with meeting the Bank’s inflation target and begs a question about the stance of monetary policy, to which I now turn. 21  Bank of England estimate using monthly AWE, employment and monthly GVA. 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  A Polarised Economy At present, we are being fed a rich daily diet of news about polarisation in our politics and societies, globally and nationally.

12 The extraordinary interventions that were undertaken using our emergency powers under Section 13(3) of the Federal Reserve Act were warranted and within our authority. However, I suspect that the scale and scope of these interventions went considerably further than envisioned by the public and Congress prior to the crisis. In response, Congress narrowed the scope of Section 13(3) with the Dodd-Frank Act. In particular, Dodd-Frank limits the Federal Reserve’s authority to extend credit through facilities with broad-based eligibility, and constrains the Federal Reserve’s authority to extend credit to a single company. The Dodd-Frank Act also modified the governance that would apply to any future intervention in an effort to increase public accountability. In addition, the Dodd-Frank Act addressed the broader issue exposed by the crisis – that some large financial institutions had become “too-big-to-fail” (TBTF). To end TBTF, Title II of the Dodd-Frank Act established a process to ensure that any financial firm could be resolved without threatening the viability of the financial system and without putting taxpayer funds at risk. 13 In addition, financial intermediaries designated as systemically important by the Financial Stability Oversight Council are subject to tougher prudential standards and enhanced supervision by the Federal Reserve. The intent behind these measures is to reduce the likelihood of a failure of a large financial firm, and the consequence of such a failure for the financial system, should one occur.
result in the reform of the Monetary  We are also mindful that while the overall development thrust is on track, there exists disparity in the incidence of poverty across the provinces and districts, despite the progress that has so far been made in reducing overall poverty in the country. Recognising the urgent need to pay attention to this, the  Law and Banking Acts, particularly to give greater powers to the Central Bank to regulate the financial system. We are confident that such moves would be instrumental in enhancing the credibility of the Central Bank, while preserving the independence it needs to perform its roles effectively. government has declared 2017 as the  Before concluding, let me express my  “Year of Alleviating Poverty” to  sincere gratitude to a number of people  eradicate poverty in all its forms from Sri  who are instrumental in supporting our  Lanka in line with the Sustainable  efforts to achieve economic and price  Development Goals (SDGs). stability and financial system stability as well as to deliver our agency and ancillary functions. I am grateful, to His  Central Bank of Sri Lanka – ROAD MAP 2017  34  Excellency the President Maithripala  excellent and highly professional advice.

The relaxed monetary  and third quarters of the year and  policy stance pursued in the past and the  subdued demand conditions in the major  increase in wages in the economy also  export destinations affected this  exerted some demand pressures on  growth. Industry-related activities grew  prices. Accordingly, headline inflation, as  substantially in 2016 with considerable  measured by the year-on-year change in  contribution from the recovery of the  the Colombo Consumers’ Price Index  construction sector. Notable growth  (CCPI, 2006/07=100), was 4.1 per cent in  was also witnessed in manufacturing,  December 2016 compared to 2.8 per  and mining and quarrying activities. cent in December 2015. Headline  Meanwhile, the growth in Services  inflation, as measured by the year-on  activities also remained buoyant,  year change in the National Consumer  supported by improvements in financial  Price Index (NCPI, 2013=100), was 4.1 per  services, and wholesale and retail trade  cent in November 2016 compared to 4.2  activities. Based on these developments  per cent at end 2015. Accordingly, overall  so far, it is projected that the economy  inflation has been contained within our  would grow by around 4.5 – 5.0 per cent  mid-single figure target of 4 – 6 per cent. in 2016.