samchain/econo-pairs-v1 huggingface dataset:
Another example of such an ‘easy’ decision is the proposals to forcedly reduce the exchange rate. I should note that the implications of ‘easy’ decisions will run counter to the promises made. Russia had such an experience in the 1990s suffering a deep economic recession accompanied by high inflation. That is why we should treat such recipes very cautiously. And what is more important – they do not allow to respond adequately to internal and external challenges facing the Russian economy. As far as global challenges affecting Russia are concerned, we should first of all highlight a long-term reduction in hydrocarbon prices and the slowing economic growth in China. These challenges nourish each other with regard to having an adverse impact on commodity prices. As a result of the ‘shale revolution’ OPEC has lost its opportunity to influence oil prices. The latter started to be determined by the profitability threshold of the majority of shale projects. Moreover, energy-saving technologies and an active use of alternative energy sources will also affect oil prices in the long run. One cannot brush aside this prospect the way it was with the ‘shale revolution’. A quick return to high oil prices is not expected, so the Russian economy must learn to live amid low prices for oil and gas. Overall, we should abandon the habit of connecting optimistic target forecasts with growing oil prices, rather than own efforts to restructure the economy.

History has shown that countries that suddenly gain access to an abundance of resources have a tendency to deplete the values rapidly and then fall into decline. 9 Since the introduction of the fiscal rule in 2001, oil revenue spending in Norway has been increased by close to NOK 110 billion. Oil revenues now fund about 1/6 of government expenditure. Without a fiscal rule, spending  9  The Paradox of Plenty. Oil Booms and Petro-States by Terry Lynn Karl (1997) provides a good description of the problems facing oil-exporting countries. 6  BIS Review 109/2010  would probably have been higher. In the 1950s, 60s and 70s, the tax burden was steadily increased to finance higher government expenditure. The return on our oil wealth has now taken over as the source of funding for increased public consumption. Chart 2 Oil revenue spending1 In billions of NOK, 2002–2010  1  Structural non-oil deficit. Source: Ministry of Finance. But looking ahead, funding Norway’s welfare system will be demanding. Increases in oil revenue spending cannot be sustained for much longer. Oil production will decline. At the same time, we have been through a period in which the need for welfare services has been fairly stable. The age-dependency ratio has shown little change. The demographic landscape will not be as auspicious in the decades to come. Even though sound institutions have been built for the management of Norway’s oil wealth, it is too early to assess the effectiveness of our management.
Like other central banks, we are constantly refining our forecasting tools to enable us to become better at predicting the future. Hopefully we will gradually increase the precision of our forecasts. However, at  2  BIS Review 101/2006  the end of the day it is not realistic to believe that we should be able to predict this type of event in its entirety. With regard to developments in recent years, it is also an important insight that inflation has been held down by forces that are essentially favourable for the economy. To put it another way, developments have been dominated by positive changes in what is known as the supply side of the economy. The fact that prices are pressed down by increased competition and increased foreign trade is something we all can benefit from – as consumers. And the fact that productivity growth in the economy is high should benefit everyone in the long term, in the form of increased welfare. Our monetary policy strategy Before we look ahead, it may be useful if I explain how we reason in general when making our interest rate decisions. The objective of monetary policy is price stability – in other words, low inflation. We have specified this as consumer prices, measured according to the consumer price index, increasing by two per cent a year. As it takes time before interest rate changes have an effect, monetary policy must be based on forecasts of the inflation rate a couple of years ahead.

There are, of course, areas where developments have not been so positive. This applies in particular to employment. However, the insight that employment in the long term depends on how well the labour market functions is beginning to gain ground. This is where efforts should be made to obtain a longterm solution to the employment problem. The decisive factor is not how the Riksbank sets the interest rate or how expansive fiscal policy is conducted. The idea that there is no conflict in the long term between objectives for good employment and low inflation is otherwise one of the reasons why Edmund Phelps is this year being awarded the Riksbank’s prize in economic sciences in memory of Alfred Nobel. Now, I do not wish to claim that everything positive that has happened is due to better thought out economic policy. There have also been significant changes in other areas that have contributed to the favourable developments. However, it can be observed that the changeover of monetary policy has given a steadiness and stability to economic policy that was previously lacking. This should be a fairly important factor. BIS Review 101/2006  1  …and a little closer Let me now say something in more detail regarding the developments over the past 3-4 years, as these have been rather special in some ways. At least at first glance, growth, inflation and employment have developed in a slightly contradictory manner in relation to one another during this period.
This has also served to reinforce the Government's objective to enhance the efficiency of the public delivery system. This collaboration has resulted in the acceptance of the use of cards including the ATM card, which also functions as a debit card, for over the counter services and the offering of payment services via Internet banking and the Internet-based Financial Process Exchange (FPX) payment system. Another initiative undertaken has been the review of the remittance and e-money regulatory framework to encourage the introduction of payment products that would cater for the unbanked and underserved communities such as migrant workers and consumers with low  2  BIS Review 69/2008  income and low financial literacy and who may have no alternative but to rely on informal payment service providers. There are now more than 20 new remittance and mobile payment products that have been launched. The Bank has already engaged the relevant stakeholders on the priority areas identified and welcomes any further industry efforts to address these issues. Given the significant pay-offs from the low cost technologies in accelerating the adoption of electronic payment, the mobile phone is identified as one of the delivery channels that should be leveraged on. Potential of mobile phones to make the transformation Bank Negara Malaysia sees tremendous promise in mobile telecommunication networks as an electronic payment channel since mobile phones are already in the hands of most Malaysians, with 88% of the Malaysian population subscribing to mobile phone services.

This would not only promote the opening of banking accounts amongst this target group but would also enable them to enjoy lower cost of financial services and better means of savings, thus benefiting the economy as a whole. As the electronic payment channels become more easily accessible, user-friendly and offered at a low cost, it would thus provide the opportunity to shift the remittance flows from the informal to formal channels. Indeed, electronic payments can be one of the strategic tools to meet these objectives and achieve higher economic growth. Electronic payment increases operational efficiency and improves productivity levels through expedient payments and receipts of funds. Electronic payments would also provide the speed and convenience of making payments from any place or time. It also reduces costs through the reduction of redeployment of resources used for handling cash and cheques. Accelerating the country's migration to electronic payments has therefore become a part of Malaysia's larger national agenda to increase the efficiency of  BIS Review 69/2008  1  the nation's payment systems which would ultimately improve the competitiveness of our economy. Cash payments in Malaysia still account for a large portion of the number of transactions in the economy. Going forward it is expected that its use will level off and stabilise with the increased use of electronic means of payments. Credit cards, ATM cards, debit cards including the e-purse application embedded in the MyKad are among the card payments possibilities in Malaysia.
By level of educational attainment, the fall in employment for workers with lower studies (-13.8%) was far higher than that observed among those with intermediate studies (-4.6%), while there was a year-on-year increase of 1.5% among employees with higher studies. 3 For further details, see the Banco de España Annual Report 2019, Box 4.2, “The employment income and financial situation of the workers most affected by COVID-19”. 6  sectors, these new restrictions could also bear down directly (and not only through knockon effects) on the degree of robustness of the other productive sectors. In these extraordinarily uncertain circumstances, a very significant deterioration is in any event expected in the Spanish economy’s levels of activity and employment, and in its public finances for 2020 as a whole. And this negative impact will, moreover, be relatively persistent. In particular, taking the above-mentioned Banco de España scenario 1, GDP would contract by 10.5% in 2020 (12.6% under scenario 2), and pre-crisis levels of activity would not be regained until late 2022, when the level of GDP would still be some 2 pp below that recorded at end-2019 (more than 6 pp below in scenario 2). And this despite the fact that output would grow with some momentum in 2021 and 2022, at rates of 7.3% and 1.9% under scenario 1, and of 4.1% and 3.3% under scenario 2. This adverse impact of the pandemic on Spanish GDP would generally be more marked than that which most developed countries would undergo.

Currently, the portfolio of euro area households at the age of retirement is tilted towards real estate rather than financial assets, especially in the Mediterranean countries. There are, however, various financial products that can be used to extract liquidity from real estate assets. 13  For example, reverse mortgages are loans, guaranteed by the borrower's property, in the form of either a lump sum or a regular income stream until the accumulated debt reaches the loan limit, which is a fraction of the property value. Other forms of reverse mortgages include the possibility for borrowers to borrow funds as they need them up to a pre-agreed limit. Another option is the so-called sale and leaseback contract. In this case the ownership of the dwelling passes to the cash provider who in turn leases the property back to the seller. Some of these products could be combined with annuities, which are insurance products that guarantee an income stream for life. However, in the era of low interest rates the income stream per unit of asset is comparatively low, and tends to decrease even further with the increase in life expectancy. These changes in the demand for financial products could have implications for the structure of the financial system. The traditional role of banks in their intermediation of funds from short-term deposits to loans may diminish.
You have to know that when the parts come together and act upon each other, the system as a whole is resilient. One part of the system may well think it has a good plan for offloading some of its risk in a period of stress. But the impact of that on other parts of the system may turn a stress into a crisis. And, given the cost when things go badly wrong, it is not only important to ensure the financial system can manage the known, likely risks it faces – the ones you can see and the ones that you think may well materialize. The system needs to be resilient to the risks of events that are improbable but possible. And, life being what it is, it must also have resilience to risks that simply cannot be foreseen – the “unknown unknowns”. To use a familiar but imperfect metaphor, the Monetary Policy Committee is like a driver steering a car down a winding road. It can dimly see the road behind but can only forecast what the road ahead looks like. The instruments usually give unclear or contradictory readings. For all that, the MPC tries to keep the car at the highest speed that can be achieved without risking having to jam on the brakes at the next bend or having to floor the accelerator to prevent stopping.

In short, the risk that more people take on higher debt relative to their income as they have to stretch further to buy homes. In the UK, household debt as a whole is already equal to 135% of household earnings. It was around 110% in 2000 and was driven up to 165% in the years leading up the crisis. It fell back sharply after the crisis. Not surprisingly, the crisis and recession made households realize that their housing assets were worth less and that their debt made them more vulnerable than they previously expected. So they increased their savings and paid down their debt. And the more indebted they were, the more they were likely to cut back sharply on their consumption. There is good reason to believe that this cut-back in consumption in the face of high debt is one of the main reasons why recessions are more painful when they follow a period in which household debt goes up quickly. At around 135% UK household indebtedness is high. It is at 2004 levels. It is markedly higher than many European countries. It is on par with the US. True, there are a few countries with even higher levels.
It is also possible to use other methods, e.g. foreign exchange interventions, as we did in the summer, as a means of achieving our objective. However, the repo rate is the monetary policy instrument normally used. Our monetary policy strategy can be described, somewhat simplified, with the rule of thumb that when inflation one to two years ahead is estimated, taking into account the risk scenario, to deviate from the inflation target, the steering interest rate is adjusted. The Riksbank’s assessment of the future inflation rate is communicated, for instance, in the Inflation Reports presented four times a year. The Riksbank has chosen to set its inflation target in a medium-term perspective. This is because monetary policy influences inflation with some time lag. An ambition to try to ensure that inflation also developed in line with the target in the short term would probably require significant changes in the steering interest rates and thereby contribute to unnecessarily large fluctuations in demand. The fact that the inflation target is expressed in terms of a medium-term perspective also plays down the importance of temporary price changes. Consumer prices are sometimes affected by various disturbances that have temporary effects on inflation. Political decisions, for instance, on tariffs and indirect taxes, can also have a temporary effect on the rate of price increase. It may also be useful here to describe briefly how monetary policy affects inflation. A change in the interest rate has effects on the rate of price increase via a number of different channels.

Reputation costs in the sense that it is more damaging to good will to be among the first to raise prices, than to be one of many during a wave of price increases. This means that once some companies have started raising prices, many others soon follow. For this reason, if the central bank misunderstands the situation and allows a positive inflationary pressure to prevail as long as the  2  BIS Review 13/2002  inflation rate remains low, the general public’s image of the central bank’s behaviour will change. This in turn will affect pricing behaviour and once the increases have started, more will follow in the shadow of the first. This is why inflation often comes at a late stage during an economic upturn and it can mean that inflation remains too high during a period when economic activity is declining, despite falling demand and production. It is something of a paradox that a credible central bank can have greater difficulty seeing the signs of price pressure in time. In my opinion, there is a risk that Swedish inflation has been held down through deregulation and increased competition in such a way that we have been lulled into thinking that the inflationary tendencies in the economy are lower than they actually are.
Pulling this together, the recovery has slowed and the economy has been buffeted by additional shocks. The switch of demand from goods to services, as Covid has faded in terms of its economic impact, has not taken place to date on the scale expected. Meanwhile, supply bottlenecks and labour shortages have weighed on output, and are continuing. Indeed the number of high profile supply bottlenecks appears to be increasing. I must say that when I heard that we were suffering a shortage of wind to generate power, I was tempted to ask, “and when are the locusts due to arrive”. The hard yards ‐ speech by Andrew Bailey | Bank of England  Page 2  A number of these supply bottlenecks are not obviously a product of Covid, though others are. It is also possible that the economic fragility created by Covid has amplified the impact of other shocks – either that or the gods really are against us. I think it is more likely Covid amplifying at work. I want now to turn to the labour market, because here we appear to have a big puzzle. Let’s start with the very good news. So far we have not seen a major upturn in unemployment or substantial corporate distress, despite one of the largest economic downturns in history. That is a notable success for economic policy all round. Put simply, if the authorities have the tools and the credibility, they can do a lot to help.

Government securities are used by central banks as collateral in managing market liquidity and implementing monetary policy through money market operations. Furthermore, given their low risks, they are used by banks and pension funds as investment instruments. These aspects need to be borne in mind when designing prudential treatment of banks’ sovereign exposures. This is particularly true of emerging and developing countries, as their financial markets are shallow and low-risk equivalents to government securities and central bank papers are hard to find. As I have already mentioned at the beginning of my speech, the CNB hosted the BCG workshop on the impacts of Basel III implementation on emerging markets and smaller economies three years ago. The workshop was efficient and successful, resulting in a memo highlighting the effects of the reforms on these economies for the BCBS and supervisors. I am happy that we are meeting here again to discuss regulation of sovereign exposures and other topical issues related to Basel III regulatory reform. I hope that this workshop will reach similar success. Ladies and gentlemen, thank you and I wish you success in your work. 2/2  BIS central bankers' speeches
The Consumer Education Programme seeks to provide relevant information to consumers about insurance products, their costs and benefits, processes and documentation involved in the insurance cycle, and more importantly, the rights and responsibilities of the various parties to an insurance contract. It is also to promote greater awareness among consumers about the means and avenues for redress in the event of dispute or dissatisfaction with any insurance product or service. This Consumer Education Programme for the insurance sector will extend over a 10-year horizon and will be undertaken on several levels under a step-by-step approach to reach out to the various target groups. Similar to the Consumer Education Programme for banking, the insurance education programme has been given the acronym: “InsuranceInfo” (or “InfoInsurans” in Bahasa Malaysia). Over time, it is envisaged that the acronym and the programme will become readily recognizable in the public domain. In its first year, the Consumer Education Programme will focus on the wide dissemination of information in 12 priority areas that have been identified. These include issues on the fundamentals of insurance and takaful products and services, highlighting the important terms and conditions, rights and obligations under a policy contract as well as the redress avenues available, and the common insurance and takaful products. With participation from the insurance associations, Bank Negara Malaysia has produced 12 booklets that set out the important information for consumers in these areas.

Sunil Mendis: Risk management in Sri Lankan banks in the changing environment Inaugural address by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the CRISILSLBA seminar on risk management in Sri Lankan banks in the changing environment, Colombo, 15-16 November 2004. *  *  *  Good morning ladies and gentlemen, Let me first thank the SLBA (Sri Lanka Banks Association) and the representatives from CRISIL India (Credit Rating Information Services of India Ltd) for the initiative taken to organize this Seminar on a very important aspect of banking business - risk management. As we all know, risk management in banking is a continuous process of planning, organizing and controlling a bank’s assets and liabilities, their volumes, maturities, rates and yields. This is the most simple definition that I can think of. However, its implications on banking business are what we concern ourselves with, especially from the regulatory point of view. In the context of Sri Lankan banks at least, of the major risks confronting financial institutions, credit risk remains the predominant or core risk. Risktaking is part and parcel of banking. The highly leveraged nature of banking business itself illustrates the risk exposure level of banks. Therefore, what is important is how we manage these risks, how we measure and price risk and above all what measures we take to mitigate these risks.