samchain/econo-pairs-v1 huggingface dataset:
In the local financial market, the exchange rate, interest rates, and the risk premium have shown greater volatility than is observed in other economies. Worth noting is the peso/dollar parity, which by mid-July experienced unusually high swings, with a marked divergence from its external determinants, causing distortions in the functioning of the markets and leading the Central Bank to announce an intervention program (box I.2). Upon said announcement tensions in the price formation process in the foreign exchange market eased, with a decrease in volatility and in the exchange rate. Compared to the statistical close of the June Report, the peso depreciated in both nominal and real terms (figure 10). Projections The central scenario does not consider a specific effect of the plebiscite outcome on the economy. It does assume that uncertainty will gradually subside in the coming quarters, in the midst of a process where institutional changes continue, allowing institutions and the economy to function properly. 4  In the central scenario, headline inflation is estimated to be near its peak for this cycle, which it is still expected to occur in the third quarter of this year. In the coming months, prices will begin to slow down the pace of increases compared to previous months, so that annual inflation will begin to gradually decline. Inflation projection for the end of 2022 and all throughout 2023 is revised upwards with respect to our last Report, due to the additional depreciation of the peso and more persistent inflation.

While these developments are likely to further reinforce the strong intra-regional trade and investment linkages that are already in place, a key aspect of the increased financial integration in Asia is the need for more efficient intermediation of funds within the region. This includes the mobilizing and channeling of some part of the sizeable savings in Asia to productive investments. The average savings rate in Asia is 35% of GDP and Asia as a group has a total of about USD5 trillion in foreign reserves. Even if we invest 1% of this amount, the impact would be significant. With further liberalisation of the financial sector and the capital account, and the increased linkages of the national payment systems in Asia, financial flows within the region is envisaged to increase. This trend is reinforced by the increased presence of regional institutions in the individual countries’ domestic financial systems and Asia’ s favourable economic prospects and the increasingly more developed and sophisticated financial markets. This region has already experienced an increase in intra-Asian financial flows. One should expect that given the uneven growth paths across economies in the next few years, issuances out of the emerging economies, in particular Asia, will also likely assume greater importance as an asset class. The greater variety of asset classes would contribute to the stability of the international financial system. It will also provide a wider range of options for investors and borrowers and thus, contribute to a more efficient allocation of financial resources across borders.
In fact for the past seven years - starting well before the MPC came into existence - the UK economy as a whole has enjoyed the longest period of sustained low inflation that we’ve known in over a generation. Retail price inflation on the Government’s target measure has averaged 2.7% over that time (or only 2.1% on Europe’s HICP measure). Alongside low inflation we’ve also had the lowest nominal interest rates that most of us can remember. Short-term rates have averaged some 6¼% (fluctuating between 5 and 7½% over the period), compared with some 11¼% (fluctuating between 7 and 15%) over the previous decade. And ten-year government bond yields have fallen from nearly 9% on average in 1992 to around 5½% at the present time. But more than all that, we have also over the past seven years or so enjoyed the longest period of uninterrupted, quarter-by-quarter, economic growth in the UK as a whole since quarterly records began in 1955. Annual growth since 1992 has in fact averaged 2.8%, which is between ¼ and ½% above most estimates of our long-term underlying trend rate. Equally important, we have also enjoyed an almost continuous month-by-month fall in the rate of unemployment, on a claimant count basis, from a peak of some 10½% at the end of 1992 to the present rate of just over 4%. That is the lowest rate of unemployment on this measure since early 1980.

Mr George takes a look at recent developments in the UK economy against the background of global influences in the international financial environment  Speech given by The Rt Hon Eddie George, Governor of the Bank of England, at the City Council Dinner hosted by the Glasgow Chamber of Commerce on 18 January 2000. *  *  *  Mr Chairman, my Lord Provost, Ladies and Gentlemen, I always enjoy my visits to Scotland. And I’ve been particularly looking forward to this visit since I read a Business Comment headline, in one of your newspapers on Friday, referring to the warm welcome I could expect on this occasion - following last week’s decision by the Monetary Policy Committee to put up interest rates! It has to be said that some of the rest of the article, and some other press comment on Friday was less welcoming! We - the MPC - were variously accused of “ignoring the pain suffered by firms north of the Border”, of “being willing to sacrifice Scotland’s economy just to cool the overheated London property market”; and of causing the Scottish economy once again to suffer because South-East England is overheating. Well I’m a great believer in free speech, but let me give you some relevant facts. The MPC sets interest rates to achieve the Government’s target for retail price inflation in the UK economy as a whole consistently over time. Those are our marching orders.
Panayotou further notes the failure to provide evidence that the occurrence of lax environmental standards in emerging economies leads to FDI, on account of the fact that investment decisions by manufacturing plants and other multinationals to invest in countries is based on factors such as political stability, favourable economic policy, labour quality, and infrastructural developments. It is therefore clear that economic development is not without costs. In fact, the much desired economic growth if not carefully balanced with the need to protect the environment may result in permanent adverse effects on the environment for a country and the world. Specific to Africa, the application of these models and research findings lends itself to further caution. With the continental economy still facing numerous problems to the extent that most national economies are yet to provide sufficiently for their nationals, it is unlikely that a point would soon be reached in Africa’s economic growth, at which adequate resources become available for commitment to environmental concerns. In other words, thought needs to be given to the social background against which utilisation of resources from economic growth will depend. The various human and social challenges such as poverty and epidemics confronting the continent may well explain the relatively low emphasis by policy makers on environmental concerns when compared to their western counterparts. That said, however, it must be recognised that in respect to the ecosystem, the globe is one and benefits that accrue to one corner due to environmental preservation, accrue to the entire globe.

And our White Paper MAP breaks down this process into five key areas — Under “M”, the white paper lays out new developments in Regtech, and explores their importance to Hong Kong’s banking industry Under “A”, the white paper assesses prevailing practice, and attempts to define and evaluate existing barriers to Regtech adoption As for “P”, there are three elements involved. The first element is about laying out a common practice framework for implementing Regtech in Hong Kong; the second element involves making practical recommendations for initiatives that can contribute towards the wider adoption of Regtech; and the third element is about delivering a practical roadmap of the HKMA’s plans for promoting Regtech adoption. 20. The White Paper is actually based on findings from a survey of banks and Regtech providers, interviews with industry stakeholders, benchmarking against other jurisdictions, and an analysis of Hong Kong’s Regtech progress so far. Some of you may have offered your valuable contributions to it. So, taking this opportunity, I thank those of you who have done so for your generous help and support. 21. The White Paper will be available for public download through our official website later today. Here, let me give you a quick snapshot of some of its key contents. 2/6  BIS central bankers' speeches  Regtech adoption barriers 22. First and foremost, about Regtech adoption barriers. 23. We note that Regtech adoption in Hong Kong has made significant progress in recent years.
Muhammad bin Ibrahim: Malaysia’s “My Ringgit” mobile app and the use of ink staining technology for ATMs Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launching of “My Ringgit” Mobile Application and Ink-Stain Technology, Kuala Lumpur, 11 May 2015. *  *  *  I wish to welcome you to this event, first to launch a mobile app My Ringgit which aims to provide members of public with a tool to obtain information on the security features of our currency; and second to launch an ink staining technology as an innovative solution or approach against any attacks on our ATMs. Malaysia has one the lowest counterfeit rates in the world. Indeed, if compared to developed economies. Malaysia’s counterfeit rate is 2 per million pieces compared to development economies which range between 48 to 100 pieces to a million. Our counterfeit rate is only a fraction of the rate experienced by these countries. Most counterfeits found in circulation in Malaysia were of low quality produced using colour printers without any security features. Empirically no counterfeit notes have ever passed through the sophisticated cash processing machines used by Bank Negara or financial institutions. This is because there is a spectrum of advanced security features embedded in our currency. Nevertheless, from time to time we keep hearing cases that the general public inadvertently receive counterfeit notes in the course of doing business.

In the second half of my speech, I will address two ideas, which are the subject of current public debate and which would have a direct impact on the SNB were they to become reality: namely the creation of a sovereign wealth fund using the SNB’s foreign exchange reserves, and the sovereign money initiative. Economic developments Discontinuation of minimum exchange rate Let’s start then by casting our minds back to last year. On 15 January 2015, the SNB discontinued the minimum exchange rate of CHF 1.20 per euro. This had been introduced as a temporary measure in September 2011 in exceptional circumstances. The Swiss franc’s safe-haven status had caused it to appreciate rapidly and sharply against virtually all currencies. The consequent massive overvaluation of the Swiss franc had posed a threat to the Swiss economy and carried the risk of deflation. The minimum exchange rate put a stop to these developments. In the subsequent almost three and a half years until January 2015, the situation changed fundamentally. Global uncertainty eased and the Swiss economy gained ground once again. By contrast, recovery in the euro area continued to be sluggish. The euro had already steadily weakened against major currencies in the second half of 2014. Furthermore, at the start of 2015, there were signs of further easing of monetary policy in the euro area. Against this backdrop, the euro was expected to weaken further.
In this critical period, we were convinced of the need to build a solid, robust and clearly defined foundation for our actions. In particular: •  We have always acted and will continue to act within the framework of the mandate assigned to us by the Treaty: our priority objective is to maintain price stability, defined as an inflation rate below, but close to 2% over the medium term. Fears concerning the possible inflationary effects of our policies are therefore completely unfounded. •  Moreover, we have always acted, and will continue to act, totally independently from the political authorities. It has always been perfectly clear that the responses to the real roots of the crisis can only be provided by the governments themselves and that monetary policy can never durably mitigate political shortcomings. Thus fears regarding the financing of euro area States are also groundless. Focus on OMTs I would like to conclude by presenting in greater detail the most recent ECB measure, known as Outright Monetary Transactions (OMTs). To understand the logic and power of this instrument, we need to make a brief excursion into monetary policy theory (before lunch… sorry! But it’s not that complicated). As you know, central bank monetary policy impulses are transmitted to the real economy via several different channels. In the euro area, with bank loans accounting for three quarters of the economy’s total financing, the “credit channel” is by far the most significant vector.

Lastly, the institutions that underpin the euro area are in the process of being strengthened extremely rapidly as a result of the crisis. •  I just mentioned the substantially reinforced fiscal and macroeconomic discipline framework: it needs to be recognised that this is a very important step given the transfers of sovereignty that it represents. We are moving towards a stronger economic union;  •  The European Stability Mechanism has a firepower of EUR 700 billion to directly buy government bonds, provide collateral or lend funds. It will also be able to directly lend money to banks in difficulty without increasing the debt of their home countries. It is a powerful crisis resolution tool that Europe has equipped itself with;  •  The work on the establishment of the banking union is moving forward rapidly too. The Commission’s report that was submitted a few weeks ago sets out a clear framework: all banks in the euro area will quickly become subject to a single supervisory mechanism under the authority of the ECB. Day-to-day supervision will be performed by the national supervisors, in accordance with the principle of decentralisation that has already proved its effectiveness in the implementation of the single monetary policy within the Eurosystem. The principle underlying this single supervisory mechanism is that the severity of the crisis in the euro area has largely been due to the vicious circle that developed between banking and sovereign risk.
After implementation of a monetary union The main challenges after forming a monetary union are how to preserve stability and promote efficiency. With regard to efficiency, the message under this heading is very much in line with the previous one; since presumably no market functions perfectly there will always be room for improvement concerning flexibility and integration. However, given that certain markets can be more politically sensitive than others, we must recognize that such changes can take considerable time to implement. The view on stabilisation policy as such does not change because of the creation of a monetary union. In general, normal swings in the business cycle are counteracted by automatic stabilisers in the public budgets that dampen oscillations. As the experiences from active fine-tuning are discouraging, the primary aim of active stabilisation policy should be to counter the occurrence of unduly large asymmetric cyclical fluctuations. Overall, the trend in monetary policy towards price stability targeting has brought down inflation virtually around the globe and thus one necessary condition for macroeconomic stability has been fulfilled. When discussing the role of fiscal policy, the analysis is facilitated through addressing the roles of the monetary union and the individual country separately. Stabilisation policy from a union point of view Viewing the monetary union as a whole, the euro area can serve as an illustrative example on a couple of aspects. Firstly, the common fiscal budget is very small in comparison with national fiscal budgets.

Obviously, the optimal features of such a system are difficult to pin down but the practice of name-and-shame has in itself raised the underlying issue and  4  BIS Review 73/2006  thus increased awareness of the importance of fiscal discipline. After decades of more or less lax fiscal policies in several countries, this basic achievement should not be forgotten. Contributing to the problems of ensuring fiscal austerity is that the bigger the union, the smaller the relative size of individual countries. This means that free-riding very well might become a problem as it is rational to run deficits, even if your instinct is not to free-ride. Why? Because even though you belong to the small minority that does not worsen the fiscal position, all countries still have a tighter monetary policy that has come about as a result of the majority running lax fiscal policies. The result could be a bad macroeconomic policy mix: larger deficits and a higher interest rate than would otherwise be the case. In my view, this is a greater problem than the often discussed worst-case scenario of one or more countries experiencing a full-blown debt crisis as a result of a sustained lax fiscal policy. Acknowledging these practical difficulties, the recent re-haul of the SGP can serve as a starting point when deciding upon an appropriate framework that can hopefully minimise the problems touched upon here. Developing a fiscal framework The SGP could be characterized as consisting of three parts: governance, a preventive arm and a corrective arm.
Consumer inflation was in line with the forecasts of the July Inflation Report in the third quarter of 2016, with core goods and unprocessed food pulling underlying inflation down. Domestic demand was subdued in the third quarter but leading indicators signal that economic activity will pick up by the fourth quarter of the year. Moreover, despite downside risks to external demand due to geopolitical tensions, the external trade balance continues to improve amid increasing EU demand. On the other hand, developments regarding tourism revenues cause a slight widening in the current account deficit. 1. Monetary policy and monetary conditions Esteemed Guests, We continued with monetary policy simplification in the third quarter on the back of improved core inflation indicators, the favorable course of the global risk appetite and the effective use of monetary policy tools. Accordingly, we lowered the marginal funding rate to 8.25 percent by three consecutive 25 basis point reductions in July, August and September. On the other hand, in October, we left the policy rates unchanged in view of less tight financial conditions and spillovers of other cost factors to the inflation outlook. Hence, we kept the marginal funding rate, one-week repo auction rate and the overnight borrowing rate constant at 8.25, 7.5 and 7.25 percent, respectively (Chart 3). As you all know, with simplification, we aim to provide funding via a single rate, which will bring short-term market rates closer to the funding rate.

Thus, inflation excluding unprocessed food and tobacco posted a smaller decline, according closely with the upper bound of the July Inflation Report forecast (Chart 9). The inflation outlook remained benign amid waning cumulative exchange rate effects, weakening demand conditions and modest import prices. Cost pressures driven by producer prices remained subdued in this period. On the other hand, rising tobacco prices and adjustments in fuel taxes hampered the improvement in inflation. Therefore, consumer inflation fluctuated while annual core inflation remained on a downward track through the third quarter. After a slight increase in the previous quarter, annual food inflation recorded a sharp drop in the third quarter, standing far below the path projected in the July Inflation Report. The slowing food inflation was mostly attributed to the waning tourism demand, the contraction in exports to Russia and the measures placed on red meat. Food inflation excluding fresh fruits and vegetables fell to a five-year low of 4.78 percent in September (Chart 10). Meanwhile, despite the sluggish economic activity and the slowing food inflation, services inflation remained high mostly due to rising real unit labor costs and rent. 5 / 10  BIS central bankers' speeches  The underlying core goods inflation slowed down in the third quarter as a result of moderate exchange rates and weakening domestic demand. On the other hand, the underlying services inflation increased. Accordingly, the underlying core inflation indicators remained largely flat compared to the previous quarter (Chart 11).
6  BIS Review 123/2010  The crisis set in motion a dangerous debt dynamic, which can be illustrated by the following simple formula 13 :  where changes in public debt (on the left) are determined by the variables on the right: the interest rate on the debt, nominal economic growth in the country and the budget surplus or deficit excluding interest expenses, referred to as the primary balance. If the changes in debt (left side) are set at zero, the right side of the formula yields various conditions that must be met to achieve stable sovereign debt. If the interest rate is equal to GDP growth, the debt will be stable when the government budget excluding interest expenses is in balance. If the interest rate is higher than the rate of growth, the debt burden will be heavier and the government budget will have to be settled in surplus before interest payments. If GDP growth is higher than the interest rate, the country’s economy can grow out of its problems and sovereign debt will remain stable even with some degree of fiscal deficit. The formula also provides an answer to the question of why sovereign debt rose so rapidly in many countries. The term indicated by the circle is known as the snowball effect and depends on the difference between the interest rate level and GDP growth. Low growth or a fall in GDP results in a rising debt burden.

The Paris Club primarily negotiates debt relief with countries – often poor countries – that do not have access to traditional international funding markets. There is no supranational body for debt negotiations for countries that have borrowed in international capital markets. Some years ago, the IMF attempted to draw up a regulatory framework for governments and creditors, but did not receive the necessary support from member countries. The IMF’s work has, however, led to more frequent inclusion of clauses in international loan agreements that facilitate constructive debt negotiations. 8 In our economic system, the bankruptcy system is a useful instrument. It enables businesses to put earlier mistakes behind them and reemploy real capital and labour. Debt arrangements for governments can play a similar role and counteract downward spirals. (See Chart: Inflation.) There are two forms of debt default. Breach of contract is one form where the borrower fails to honour the contractual obligations, as illustrated in the example here. For debt denominated in domestic currency, the state can also default by pursuing an inflationary economic policy, reducing the real value of the loan. Over the past 100 years inflation in Norway surged during the two world wars and during the Korean War. The last period of soaring inflation was in the 1970s and 1980s, which resulted in a sharp fall in the real value of the bonds issued in the 1950s and 1960s.