samchain/econo-pairs-v1 huggingface dataset:
That reform created an expectation that it would be in the interests of all political parties not to repeal the legislation. For the first time since the Second World War, there was a broad-based and credible commitment in the UK to stable and low inflation. The need for any monetary regime to command sufficient support in order to acquire a reasonable lifeexpectancy was given insufficient weight in the discussions that took place at the IMF and elsewhere on Brazil and other financial crises of the 1990s. The point is made by Guillermo Calvo and Frederic Mishkin (2003) when they write, “the key to macroeconomic success in emerging market countries is not primarily their choice of exchange rate regime, but rather the health of the countries’ fundamental macroeconomic institutions, ... less attention should be focused on the general question whether a floating or a fixed exchange rate is preferable, and more on these deeper institutional arrangements” (p5).12  IV. Case Study 2: Currency reform in Iraq  The importance of expectations about the future of monetary institutions is illustrated by the recent monetary history of Iraq. This second case study demonstrates that expectations of future collective decisions can have a major impact on the value of a currency quite independently of the policies pursued by the current government. Expectations of monetary decisions within a given policy regime may be less significant than expectations of changes in the regime itself. In Iraq, regime change took on a new meaning.

For ten years, therefore, Iraq had two currencies: one issued by the official government and the other backed by no government at all. The Swiss dinar continued to circulate in the North, even though backed by no formal government, central bank, nor any law of legal tender. For a fiat currency this was an unusual situation. Whatever gave the Swiss dinar its value was not the promise of the official Iraqi government, or indeed any other government.13 Although there was little or no trade between North and South Iraq, both the Swiss and Saddam dinars were traded against the dollar. The implied Swiss to Saddam dinar cross-exchange rate from 1997 onwards is shown in Chart 3.14  Chart 3: Saddam/Swiss Dinar exchange rate, Jul 1997-Oct 2003 Saddam/Swiss Dinars (log scale) 400  200  100  50 Jul-97  Jul-98  Jul-99  Jul-00  Jul-01  Jul-02  Jul-03  Source: United Nations, Central Bank of Iraq  After 1993 the Swiss dinar deviated from parity and rose to around 300 Saddam dinars to the Swiss dinar by the time Saddam’s regime was deposed in 2003. The appreciation of the Swiss dinar is  13  At no stage did the Kurdish groups lay claim to the Swiss dinar as their currency - they had no control over it - as shown by the interview given to Gulf News on 30 January 2003 by the Kurdistan Regional Government Prime Minister Barzani who said, “We don’t have our own currency”.
This applies, I can say now, to most of their suggestions. I will then also take up a couple of points on which I do not entirely agree with the conclusions drawn by the authors. One of the recommendations given is that the Riksbank should make it clear in its Inflation Report that the flexibility of our inflation-targeting policy means that we attempt to subdue fluctuations in both inflation and the real economy. This is a point I agree with, but in my opinion we have actually already done so. With effect from the second Inflation Report this year, we have a special box explaining how the Riksbank has scope when setting interest rates to give consideration to developments in both inflation and the real economy. The box is an extract from a document entitled “Monetary policy in Sweden”, which we published in May this year. The fact that inflation targeting gives consideration to the stability of both inflation and the real economy is moreover something we have long emphasised in speeches and other forms of communication. However, it is probably fair to say that we have gradually become clearer on this point, as we have learnt more about how inflation-targeting policy should be conducted. BIS Review 117/2006  1  Another recommendation in the evaluation is that the Riksbank should base its forecasts on its own assessment of which repo rate path is appropriate; that is, that we should take a step further compared to our current method.

Beyond the theoretical considerations, it is important that financial regulation, in all its forms, should contribute to maintaining financial system diversity. Thus, attempting to measure all assets and liabilities at fair value has some drawbacks – and even entails risks – that need to be taken into account if lessons are to be drawn from the financial crisis for accounting rules. To conclude, I would like to stress an important point regarding the new financial regulatory framework. It would be unrealistic to believe that financial regulation is the answer, and, above all, that it is capable of protecting us from the risk of financial instability. Indeed, the crisis can largely be attributed to financial institutions’ inadequate risk management, which stems from an irrational trust in quantitative tools. Financial regulation should be an incentive for financial system participants to develop a sound and efficient management framework. It is no substitute. 2  BIS Review 161/2008
Key agencies such as MGTC and Sustainable Energy Development Authority (SEDA) have been established to provide the required support and incentives to promote the industry. On the financing side, Bank Negara Malaysia has worked closely with the Ministry of Finance and the Ministry of Energy, Green Technology and Water to establish the Green Technology Financing Scheme (GTFS). The scheme is expected to benefit over 140 companies. With an initial allocation of RM1.5 billion, it was recently increased with an additional RM2.0 billion. The scheme was structured to reduce the financial risk borne by financial institutions, as the government guarantees 60% of the financing amount via Credit Guarantee Corporation Malaysia Berhad (CGC) and bears 2% of the total interest or profit rate. This financing framework aims to improve the preconditions for financial institutions to finance viable and innovative green technology companies. It provides avenues that help bridge information gaps between financiers and businesses, and introduces credit enhancements and financial incentives to address any market short comings in meeting a legitimate economic need. Efforts are also being carried out to strengthen the capacity of financial institutions to provide advisory support to businesses. The certification process that verifies the businesses which qualify for the GTFS is central to these efforts, as it not only verifies the technical capabilities of the businesses, but also assists in assessing its commercial viability. Since the introduction of the GTFS in 2010, the growth of green technology financing in Malaysia is beginning to gain traction amongst financial institutions.

It has benefited from economic reforms that have provided development opportunities for our business sector, have opened markets, have increased competition, have stimulated flexible labor markets and have increased social revenues. Both fiscal and monetary policies have been cautious in providing the necessary stimulus to the economic growth, by being consistent and disciplined in the pursuit of their objectives to achieve fiscal consolidation and ensure a low-inflation environment. The size of the annual budget deficit in relation to GDP has been between 3 %, leaping to 5.7 % for 2008, while the public debt has been stable, reaching up to around 55.6 % for 2008. The annual inflation growth rate has been for a long time within the corridor defined by the Bank of Albania of 2 4 percent (and close to the Bank of Albania target of 3 percent), indicating success in anchoring market participants expectations for price developments in the economy. This steady good economic performance has been supported by a flexible exchange rate that has been instrumental in supporting and maintaining a balanced growth, by maintaining the right incentives for interaction between domestic and foreign counterparties. Fundamental changes have occurred in the financial sector too, thanks to consistent and successful reforms in the last decade. Nowadays the banking sector in Albania counts 16 banks, all in private hands, where the foreign capital dominates.
In my mind, the Federal Reserve Act is very clear in specifying that the Federal Reserve has a dual mandate: The FOMC should provide for monetary and financial conditions that support maximum employment and price stability.2 With regard to inflation, we should seek to keep inflation near 2 percent over the medium term. We should also remember that a 2 percent objective should represent an average level of inflation, not an impenetrable ceiling. With regard to our real economy mandate, we should minimize the deviations of the actual path of the real economy from its potential path (or more technically, its efficiently-achievable path). From my earlier discussion of the immensity of the current problem, we are far from minimizing these real deviations today. Second, the FOMC needs to closely look at the plethora of data that comes out every month in order to evaluate the outlook for the economy and inflation, keeping in mind a variety of potential risk scenarios and financial stability considerations. Four times each year, the FOMC formally publishes forecasts in its Summary of Economic Projections. Of course, it is crucial for each FOMC member to update his/her outlook for each meeting. Third, in evaluating the state of the economy and inflation pressures, the FOMC must periodically step back and ask itself whether something very different than normal is afoot. We all recognize that our views about how the economy works are imperfect.

Although we have little control over the strength of the economic winds buffeting our economy, our framework of inflation targeting does, as I said in my first speech as Governor almost five years ago, provide a seaworthy vessel. We cannot avoid some volatility in the short run and it is important that everyone understands the limits to the ability of central banks to smooth the economy. But, by keeping our eye firmly on the need to keep inflation close to target in the medium term, we can reach the calmer waters of low inflation, steady growth and a better balanced economy. And our policy framework will, I hope, allow you not to be overwhelmed by the headlines and to focus on what really matters for our future prosperity – the successful running of your own businesses. 4  BIS Review 8/2008
Chart 16  Employment growth in the service industries increased while declining in primary industries and manufacturing, with a redistribution of real resources between sectors. The transfer is the result of a steeper increase in demand for services than for goods when income rises. Taxes were increased to finance the expansion of the welfare state. Excluding the petroleum sector, the tax level has increased from 41% of mainland GDP in 1970 to around 48% today. Chart 17  The tax burden in mainland Norway is among the highest in the OECD countries. Only Sweden and Denmark have a higher tax burden. There are many reasons why further tax increases would put the 15  BIS Review 14/2000  Norwegian welfare state in jeopardy. Tax competition among countries is intensifying. Several countries have attracted new business by reducing taxes. Enterprises, capital and labour choose their location based on tax considerations. In principle, it is conceivable that higher taxes only affect the household sector, so that the business sector is not exposed to a heavy tax burden. However, it is difficult to find direct or indirect taxes that do not also affect the business sector. Higher direct and indirect taxes may lead to demands for higher income, which will be easier to achieve the tighter the labour market is. However, companies exposed to strong international competition have limited scope for passing on higher costs to households. A high tax level is particularly dependent on an efficient tax system.

Nominal interest rates were kept low although price inflation and the value of tax-deductible interest expenses rose. Frequent devaluations in the period from 1976 were ultimately ineffective with regard to preventing a relative decline in manufacturing industry. On the contrary, the devaluations proved to be self-reinforcing. Chart 7  Over a period of 15 years from 1973 to 1988 consumer prices in Norway rose twice as much as in Germany. In the same period, the value of the krone was virtually halved against the Mark. While we paid around 2 kroner for one Mark in 1973, 15 years later we had to pay close to 4 kroner. Since then the krone has remained relatively stable against the Deutsche Mark. Today the exchange rate is around 4 kroner and 10 øre. The last devaluation came in 1986 after the fall in oil prices. Thereafter, the krone exchange rate was fixed. The Norwegian economy had to go through a severe economic turnaround. Confidence in the krone had to be restored in order to avoid persistent inflation. This required very high interest rates. The Norwegian economy entered the worst recession experienced since the interwar period. Unemployment rose from about 2% in 1987 to almost 6% in the winter of 1992/1993. Many companies went broke and households were faced with debt problems. The financial sector was hit by crisis. The fixed exchange rate regime led to a gradual decline in price inflation, but not to deflation as was the case in the 1920s.
I refer here to the lag before the ‘peak effect’ as a shorthand for estimate of transmission lags. Transmission comes via distributed lags over a period of time. 6. A research programme is currently underway at the Bank to assess the length of transmission lags. Given that Bank Rate has been at or near its effective lower bound for most of the past 15 years (and has changed little through time as a result), a re-exploration of transmission from Bank Rate innovations to CPI inflation is both now possible and overdue. 7. For an analysis of this form on US inflation, see Cogley T. and T.J. Sargent (2001). ‘Evolving post-World War II US inflation dynamics,’ NBER Macroeconomics Annual 16, MIT Press. 8. For a deeper discussion of these definitional issues, see the analysis presented in Altissimo, F., M. Ehrmann and F. Smets (2006). ‘Inflation persistence and price-setting behaviour in the euro area,’ ECB occasional paper no. 46, which draws on the analytical framework underlying the substantial body of research undertaken as part of the ESCB’s Inflation Persistence Network in the early 2000s. 9. For example, see the discussion in chapter 3 of the MPC’s Monetary Policy Report - November 2022, entitled ‘The key factor’s affecting the MPC’s inflation projection.’ 10. The recent rise in food prices may also follow in part from the consequences of the Russian invasion of Ukraine and its implications for agricultural commodity markets in cereal and vegetable oils. 11.

By doing so, the MPC will not only deliver on its mandate, but will also create an environment of price stability in which households and firms can take the longer-term investment and spending decisions that drive the dynamism, innovation and productivity gains on which UK living standards depend. The MPC has tightened monetary policy over the past eighteen months to achieve the 2% inflation target. Bank Rate has been increased from its effective lower bound of 0.1% to today’s level of 4.25%. Quantitative easing (QE) has been halted and replaced with a programme of quantitative tightening (QT), involving the sale of gilts and corporate bonds held as a result of the Bank’s earlier asset purchase schemes. [1] And the MPC’s communication about the outlook for monetary policy has shifted significantly. Picking up on this lattermost point, in the monetary policy summary published following March’s MPC meeting, the Committee noted: “if there were to be evidence of more persistent [inflationary]  Page 3  pressures, then further tightening in monetary policy would be required”. [2] Even as the Committee’s communication has evolved, some variant of this line has been included in the MPC’s communication since the middle of last year. It illustrates the shift towards more data-dependent and conditional statements about the monetary policy outlook since I joined the MPC in the late summer of 2021. As is clear from the sentence I quoted, the concept of inflation persistence lies at the heart of the MPC’s assessment and communication of the policy outlook.
Supervisors should never act in a way which implies that they assume responsibility for the banks’ ongoing activities. Third, the supervisors must have a broad range of powers at their disposal to address different banking problems. This range should include limited measures such as requesting changes in the bank’s management or requesting improvements in risk management or control management. Also more far-reaching measures should be available such as stopping or restricting certain payments or activities, or the ultimate measures, to withdraw the banking license or to liquidate the bank. Preferably, some of these powers should be “pro-active” so the supervisor is allowed to act even before a problem becomes acute, for instance when the capital ratio is declining but has not yet reached the minimum level. Fourth, the supervisors must have a well defined and documented work process. This includes a set structure of approaches to collect and analyse information and to use this as a basis for taking action. The approaches are, for instance, offsite monitoring, onsite examinations and ongoing contacts with the bank. Offsite monitoring means analysing regulatory and financial reports from banks, from their internal and external auditors, and from external media. Onsite examination is a tool to ensure that the bank actually works as reported and to gain further insights into the bank’s operations. The modern approach in this field is not to look at all transactions and documents but rather at a sample of those, including the more important ones.

*** To conclude, I would like to come back to our work as a “catalyst” for innovation. As Aristotle said “what we need to learn before doing, we learn by doing”: internally, we encourage a culture that is geared towards innovation, with the  Page 5 of 5 launch of an intrapreneurship programme to foster innovative ideas. We also want to co-construct and test out with you innovative solutions to digital challenges, for example a collaborative method for preventing money laundering, or a security solution that can withstand the huge processing capabilities of future quantum computers. We shall continue on this path. Thank you for your attention. i  New Payment Stakeholders Overview (banque-france.fr) Digital players in the financial sector: a step towards profitability? | Banque de France (banque-france.fr) iii Digital transformation in the French banking sector | Banque de France (banque-france.fr) iv Charter for the appraisal of Fintech authorisation requests | Banque de France (banque-france.fr) ii
Chart Pack Chart 2:  Chart 1: (a)  Private sector output per head(a)  Private sector output per head  Change in productivity relative to level implied by trend(b)  Index:2008 Q1=100  Recession (from 2008Q1 to 2009Q3) Recovery (from 2009Q3 to 2011Q2)  110  Continuation of prerecession trend (b)  100  10 5 0 -5  90  -10  80  1995  1999  2003  2007  2011  Private sector  Other services  Finance  Consumer services  1991  Business services  50 1987  Construction  60  Manufacturing  70  -15 -20  Source: ONS (including the Labour Force Survey) and Bank calculations. Source: ONS (including the Labour Force Survey) and Bank calculations  (a) Private sector approximated by excluding employment and output data for public administration and defence, education and health sectors. Workforce Jobs sectoral employment splits scaled to match total LFS employment levels. (a) Calculated using Workforce Jobs sectoral employment splits scaled to match total LFS employment levels. (b) Trend calculated by projecting forward output per head from 2008 Q2 using the average quarterly growth rate between 1987 Q1 and 2008 Q1. 8  (b) Percentage deviation from trend. Trend calculated by projecting forward output per job from 2008 Q2 using the average quarterly growth rate between 1987 Q1 and 2008 Q1.

Interbank funds and securities transfer are performed via the Interbank Clearing – Real Time Gross Settlement System that is supervised and operated by the Central Bank. This system commenced operation in April 1992. In 2000, the second generation Electronic Fund Transfer System replaced its predecessor. Today, Electronic Fund Transfer System is a real-  BIS Review 21/2008  1  time gross settlement system in line with best international practice. Payments are settled individually on the accounts and transferred to receiver immediately. Thanks to the infrastructure provided by Electronic Fund Transfer System, institutions and individuals can make any kind of payments in real time through telephone banking or internet banking services free of charge or with minimum cost. A noteworthy feature of the payment system is that it was designed to process both large value and low value transactions. The Central Bank of Turkey also established Interbank Clearing – Electronic Security Transfer and Settlement System for real time electronic transfer and settlement of government bills and bonds. The system has been taken into operation in 2000 under the supervision of the Central Bank of Turkey. It is fully integrated with the Electronic Fund Transfer System and operates under delivery versus payment principal. The third pillar of the payment system in Turkish economy is the Interbank Cheque Clearing Houses Center. The Clearing House is a private legal entity that carries out the clearing and settlement of cheques under the supervision of the Central Bank.