samchain/econo-pairs-v1 huggingface dataset:
In view of the large and persistent shortage in rupee liquidity, the Monetary Board decided to reduce SRR applicable on all rupee deposit liabilities of commercial banks to 6.00 per cent from 7.50 per cent in November 2018. The reduction in SRR released a substantial amount of rupee liquidity to the banking system, which could have led to a reduction in interest rates and excess aggregate demand. Therefore, in order to neutralise the impact of the SRR reduction and maintain its neutral monetary policy stance, the Central Bank raised policy interest rates simultaneously. Since the announcement of the transition towards FIT, we have broadly maintained low levels of inflation in spite of some occasional upticks and downturns due to various demand and supply shocks stemming from the external and domestic fronts. Benefiting from prudent and proactive monetary policy measures that were also supported by several macroprudential measures, monetary expansion was contained at desired levels, thereby supporting the maintenance of low levels of inflation during 2018. As you all know, the Central Bank has an unblemished track record of maintaining single digit inflation continuously for a decade. This also shows the Central Bank’s strong commitment to price stability, which it considers to be of utmost importance to create an enabling environment for the economy to 13  achieve an accelerated trajectory of economic growth, to uplift the standards of living of the people.

As we have highlighted on many occasions, strong commitment and the support from the government is essential towards adopting FIT as the framework for monetary policy. It is heartening to note that the government has recognised FIT as the prospective monetary policy framework for Sri Lanka and it has been adopting policies aimed at fiscal consolidation in the medium to long run. We welcome government’s efforts related to revenue based fiscal consolidation, which is aimed at raising revenues, while rationalising expenditure of the government. We expect that implementing the new Inland Revenue Act, improving tax administration supported by the full roll-out of the RAMIS system and improving tax compliance will be instrumental in raising revenues. In addition, introducing measures to rationalise expenditure, strengthen public debt management through the enactment of the Active Liability Management Act, No. 8 of 2018 (ALMA) and introduce required 16  reforms to State Owned Enterprises (SOBEs) as well as reinforce the MediumTerm Debt Management Strategy (MTDS) aiming to contain the exposure of foreign currency liabilities were all encouraging moves by the government. Similar to other country experiences, the inflation target in the FIT framework is expected to be decided jointly by the government and the Central Bank. Hence, the FIT framework requires these two institutions to work together, as there should be no misalignment between fiscal and monetary policy.
18  Productivity measured in heads (i.e. output per worker) is relevant in computing unit cost growth using wage or labour compensation measures also expressed in per head terms. 19  The Minutes of the MPC meeting held on 13th January 2016 noted that “In the year to 2015 Q3, a measure of total unit labour costs based on the MPC’s backcast estimate of GDP had grown by 1.6%. Growth of unit wage costs had been somewhat stronger over the same period, at 2.3%, though both rates were likely to have eased back slightly in the fourth quarter of last year.”  20  Analysis by Bank staff suggests that a simple principal component (PC) measure of core inflation – which summarises the broad trends contained in a large set of measures – is a better predictor of subsequent headline inflation than is current headline inflation. In other words, gaps between core inflation and headline inflation tend, on average, to be resolved by total inflation moving back towards core inflation (rather than vice versa). However, although smaller, the root mean square error from core inflation-based forecasts for future inflation does not seem statistically significantly smaller than forecasts using current headline inflation. Additionally, the summary PC measure of core inflation forecasts headline inflation 1-year ahead more accurately than a simple assumption of 2%, such that core inflation provides useful information for near-term inflation trends.

Traditional banks are taking the new technologies on board, occasionally through strategic alliances with new technology firms. New companies are also being incorporated into the sector, ranging from small start-ups to large firms. The new firms must, however, win the confidence of consumers and investors,  6/7  something that traditional financial institutions have secured over a long period of time, anchored by strong regulation and financial supervision. From the standpoint of the regulators, the fintech challenge affects both prudential and consumer protection policies. From the prudential perspective, regulators must strike a balance between catalysing innovation and the efficiency that new technologies can provide, and maintaining a sound regulatory framework. The guiding principle should be to apply the same regulation for the same type of financial services. In this respect, as the presence of fintech increases, it might be useful to put greater emphasis on the regulation of services, instead of placing it on the institutions that provide these services. Turning to consumer protection policies, it is vital that investors and consumers should understand how the new services function and the attendant risks, including, for example, credit, cyber-security and privacy-protection risks. Here we should strengthen our information and financial education policies. We are mindful at the Banco de España of the need to step up our efforts in this area.
In line with this development, oil prices hovered above the previous assumption of oil prices at USD 55 per barrel in the Inflation Report of April. Our assumption for oil prices have been revised in line with the average of futures prices registered in the first half of July. Within this framework, oil prices were assumed to be USD 60 on average in 2009 and around USD 70 in 2010 and thereafter. On the other hand, projections for food inflation of 7.5 percent for end-2009 and 6 percent for the following years have been maintained. The impact of exchange rate movements on input costs since the last quarter of 2008 was offset by declining import prices. Therefore, import prices denominated in domestic currency did not display significant changes. While generating medium-term forecasts, it was assumed that imported input costs would increase gradually, in line with the anticipated slow recovery in global economic activity. 16  BIS Review 103/2009  Furthermore, revised forecasts envisage that world interest rates will remain low for an extended period of time. Regarding fiscal policy, it is assumed that fiscal discipline will be established within a medium-term program. Moreover, it is assumed that adjustments in taxes/administered prices in the second half of 2009 will add around 1.5 percentage points to 2009 inflation.

14  BIS Review 103/2009  Figure 25: Aggregate Index of Consumer Sentiment* and Private Consumption Expenditures (Annual Percentage Change) 10 5 0 -5 Private Consumption -10  Aggregate Index  -15 1  2  3  4  1  2006  2  3  4  2007  1  2  3  2008  4  1  2**  2009  *The index is compiled by the CBRT by using production and imports of consumer goods. ** Comprises data pertaining to April-May period. Source: TURKSTAT, CBRT. Distinguished Members of the Press, The nature of the period we are going through increases the importance of monitoring data pertaining to the speed and timing of global recovery, with respect to the foreign demand outlook. Since the last Report period, growth forecasts for 2009 for the US economy have been quite stable while those for the Eurozone have been revised downwards. Meanwhile, global growth forecasts for 2010 were revised upwards by a small margin in the last quarter. An analysis of regional growth forecasts reveals that the upward revision in the Eurozone for end-2010 has been more limited compared to the revision in the US economy. To sum up, while forecasts for global economic activity have become relatively more stable in the last quarter, the outlook for the “recovery process in the Eurozone – our main trade partner – to be anemic and protracted” has strengthened (Table 2). BIS Review 103/2009  15  Table 2.
Developing those raw ingredients, and mixing them appropriately, has been crucial for social and economic progress over the course of history. And what has been true of the past is likely to become even more important for driving economic and societal improvement in future. Like the GSA, the Bank of England is a public institution whose role is to serve the public good. We have been doing so for 325 years. The issues I will discuss today – stability in our economies and societies, economic and social progress, the impact of innovation and ideas, the role of education and insurance – have remained central to public policy throughout that time. They will remain so in the period ahead. To summarise up front my line of argument:   Imagination and creativity are what set humans apart from other animals. They explain why human evolution has been jet-propelled, while other animals have proceeded on foot. Through their creativity, humans have followed a completely different evolutionary arc – so-called Life Version 2.0.   Innovation and creativity are the wellspring of improvements in economies and societies. They explain the secular, spectacular rises in global living standards and well-being now seen for several centuries. Human imagination and intelligence has been the engine of progress and growth.   Creativity and innovation can come at a cost. The US economist Joseph Schumpeter spoke of “creative destruction”. He was right. With innovation can come a loss of livelihood and a straining of the social fabric.

It was these two “i”s that were responsible for taking us from yesteryear’s hunter-gatherer clans to today’s super-cities.17 Let me start with the first “i” – ideas. These have their source in another, by now familiar, i – imagination. Great leaps forward societally have always had innovation, ideas and imagination at their hub. While fire provided the spark for early homo sapiens, this was only the first in a sequence of technological fireworks. In the mid-18th century, the Industrial Revolution was sparked by the firing of three ideas – James Watt’s steam engine, Richard Arkwright’s water frame and James Hargreaves’ spinning jenny. These inventions occurred at almost exactly the same time (within a handful of years) and in almost exactly the same place (within a few hundred miles of latitudes North of Stockport). This was remarkable, if not coincidental. The second Industrial Revolution of the mid-19th century was sparked by a different set of innovations. This time it was sanitation, electrification and internal combustion that lit the fuse on the mass-industrialisation of countries and continents. The third Industrial Revolution of the mid-20th century brought a further wave of innovation, with digitisation, computing and the internet generating a transformation of business and society. Each of these inventions involved a creative leap of imagination. As adoption spread, each became in time a GPT, applicable across sectors, industries and geographies. Like fire, these GPTs then transformed industries, jobs and lifestyles in ways inconceivable to their creators.
For example, some suggest a “green quantitative easing” by introducing a bias towards green assets in the purchase programme framework. Despite its apparent simplicity, this proposal is incomplete and has serious limitations: monetary policy targets a macroeconomic objective (inflation) and it does not single out specific social or sectoral objectives; and massive purchases on a relatively shallow pool of green bonds could seriously distort the market. I prefer a more “integrated” and holistic approach – and hence more ambitious, consistent with our financial stability and monetary policy mandates. This is what I pointed out in the latest issue of the Financial Stability Review of the Banque de France in June.4 Climate change is a source of financial risk, but it can also provoke both upward price pressures and a slowdown in activity – and can thus generate a long-term stagflationnary shock. In the light of this, central banks have two main tools at their disposal that should be activated. First, it is essential that they contribute to the collective research effort in order to better understand and anticipate the economic effects of climate change, and still more that they integrate these into their macroeconomic models. Second, in operational terms, this involves integrating the results of climate-related risks into the assessment of collateral. This requires the development of a robust methodology to accurately assess the impact of climate change on the credit risk of eligible assets. Let me conclude with a strong conviction: these shared challenges for tomorrow require immediate action from us today.

José De Gregorio: Workshop on financial markets and monetary policy Opening remarks by Mr José De Gregorio, Governor of the Central Bank of Chile, at the Workshop on Financial Markets and Monetary Policy, Santiago, 6 August 2010. *  *  *  On behalf of the Central Bank of Chile I would like to welcome you all to this workshop on the interactions between financial markets and monetary policy. We have put together a very interesting group of papers that are surely at the forefront of research in this area. The episodes that started to unfold during the second half of 2008 reminded us once more of the central importance of financial markets for the functioning of the economy. As the crisis progressed and policy makers tried to mount a response that could mitigate the effects on the real economy, understanding which actions would have the bigger impact at the smallest possible cost become a key priority. At the same time, gauging how the traditional policy actions would affect the economy in a scenario of deep disarray of financial markets also become an important priority in Central Banks and Treasury Departments around the world. The collection of papers that will be presented here today try to illuminate different features of the policy dilemmas I just mentioned. They are then a very welcome contribution. To some extent economists lacked a clear theoretical framework to understand the role of financial markets as both an originator and propagator of shocks when the crisis started.
Financial institutions with their extensive branch networks, qualified financial management officers and extensive experience in assessing the risks facing consumers are best positioned to increase the level of institutional capacity that can enhance financial literacy. We need to recognise our shared responsibility to equip the communities in our countries with the necessary skills and confidence in managing their personal financial matters. Collective efforts to develop institutional capacity to share information and knowledge about financial literacy across the region can also bring about mutually reinforcing results. Financial literacy needs to be elevated to a more important level on the national and international agenda for a greater shared economic prosperity. On that note, thank you for your attention. BIS Review 85/2005  3

Zeti Akhtar Aziz: Establishment of the Financial Services Professional Board in Malaysia Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Official Launch of Financial Services Professional Board, Kuala Lumpur, 24 September 2014. *  *  *  It is my great pleasure to welcome you to this occasion of the official launch of the Financial Services Professional Board. Among the key challenges emerging from the global financial crisis and the recent episodes of financial market manipulation is for the need to have a strong culture of professionalism, integrity and ethics permeating throughout the financial services industry to restore public trust in the financial system and to secure long-term sustainability of the industry. The 2008 financial crisis highlighted how business decisions that were predominantly driven by short-term incentives critically undermined the health of some of the largest global companies. This in turn had enormous consequences on entire economies. Not only has public confidence in the financial services industry been shaken, but the prevailing business models of financial institutions have been questioned with calls being made for changes that are more aligned with long-term sustainability. These changes relate to both the general structure and activities of financial institutions, and to the governance and culture within the institutions. While financial institutions have to create value for shareholders, of fundamental significance is also the need to serve the public interest given the importance of a well-functioning financial system in the economy.
The use of mobile applications has also made it much more convenient for individuals to monitor and control financial habits, in addition to helping consumers make financial choices. This has also enabled resources to go further by significantly expanding the reach of financial capability initiatives, and increased its potential to create a more lasting impact on financial behaviour. In Malaysia, initiatives to strengthen financial capability began almost 20 years ago and is an important component of the Bank’s business conduct and financial inclusion responsibilities. The Bank has in collaboration with the Ministry of Education and the financial industry, implemented financial education in schools to promote financial capability skills from an early age. This has now culminated in a process of formally integrating financial education elements into key subjects in the school curriculum. Financial capability programmes among adults are closely aligned to the nature of financial decisions and exposure that individuals are likely to be confronted with at the different stages of their lives. This has therefore shaped the content, approach and timing of our financial education programmes. Of significance, has been the involvement of the private sector, through initiatives such as financial education in the workplace which are organised by large corporates in collaboration with the Credit Counselling and Debt Management Agency in Malaysia. The enabling infrastructure is also being enhanced to provide financial consumers with an integrated platform for easy access to financial education contents that are relevant for financial decision making.

As from 2006, it is assumed that nominal growth in general government expenditure will be approximately the same as nominal growth in general government revenues and that the real tax level will remain unchanged. Growth in the euro area and Japan was weaker towards the end of 2004 than projected in the November Inflation Report. It appears that it will take time for structural changes that have been implemented, in Germany for example, to contribute to an increase in output. In the US, on the other hand, economic growth remains firm and capacity utilisation is rising. Even though developments in the US economy are favourable, higher interest rates, among other factors, will gradually result in an increase in household saving. At the same time, the plans call for a lower rise in government spending. Weaker growth in US demand may imply slower growth also in other countries. In addition to the euro area, economic growth is expected to slow in the UK and Sweden. On balance, we assume that growth among our trading partners will slacken this year and stabilise in the years ahead. Growth in Asia, except Japan, and in Central and Eastern Europe is expected to moderate but to remain strong. Robust expansion in China and India has in particular pushed up prices for oil and other important commodities. Growth impulses to the Norwegian economy may therefore be somewhat stronger than the overall outlook for our most important trading partners would indicate.
We will continue to pursue these goals, with no concessions to our primary mandate and our independence. 3. Beyond this action of the Eurosystem entrenched in the Treaty, the euro area needs a new and concrete leap towards stronger financial integration. It is true that we have made enormous progress for more regulation and created new tools, but the different episodes of the crisis have demonstrated that a monetary union can be stronger if it relies on a financial system whose health is not ultimately dependent on national mechanisms: –  the homogeneous health of the financial system is key for the proper transmission of a single euro area monetary policy;  –  as long as the euro area’s financial health is vulnerable to problems in one country, negative feedback loops between sovereign and banking risks can materialise – this is precisely what happened in the euro area;  –  in a monetary union, capital is free to move very quickly from one country to another, thereby augmenting the potential incidence of “bank runs” if no supranational deposit guarantee mechanism is in place. Therefore, we have to build a truly federal authority in the Euro zone, a structure combining the US FDIC’s functions with the ones of the US Federal Reserve System would be a major advantage for the future of the euro area.

And at the Bank of England, we had recently created a directorate dedicated to ensuring financial market infrastructure, including payment systems, meet the necessary standards of robustness and resilience. Overall the pace of technical, structural and regulatory change in payments was poised to pick up. And I have not been disappointed with the level of ambition and innovation we have seen in the past three years. Collectively, we have been on a journey; inching and in some cases taking great strides towards a payments landscape that is competitive, resilient and ready for the future. But, while considerable progress has been made, the journey to best in class payments is far from complete. Whilst important milestones have been reached, many more lie ahead. For example, one catalyst for change in UK retail payments was the creation of the Payments Strategy Forum (PSF) in March of 2015. And, with the formal consolidation of the Bacs and Faster Payments systems into the New Payment System Operator (NPSO) just last month, we can say that a key recommendation of the PSF has been delivered. But the NPSO now needs to turn its attention to developing and implementing the remaining critical recommendations which I will come on to discuss. We now need, collectively, to refocus our energies for the next leg of this journey towards best in class payments.