samchain/econo-pairs-v1 huggingface dataset:
Similar weakening has taken place in the euro area, the United States and the United Kingdom. 14 There are several explanations for this  13  See, for instance, Faust and Leeper (2015) and Hansson et al. (2018). 14 See, for instance, Cunliffe (2017). 9 [24]  development, even if there is no consensus in the literature regarding the underlying causes. Here I shall take up a possible reason that does not seem to have been given much attention in the general debate and may therefore be of interest. The first thing to note is that it is not surprising that the covariation, or, as we economists say, the correlation between economic variables varies over time. If we were to study two random economic variables over a longer period of time, it is probable that the covariation between them would vary between different points in time because the economy is constantly changing. For a central bank, however, it may nevertheless seem slightly worrying that it is the slope of the Phillips curve that has changed, as it has such a prominent role in monetary policy analysis. A common reasoning by a central bank might be: “We have seen an increase in unemployment recently. This has led to the labour market becoming less tight and to companies now being able to find new staff more easily – the competition for jobs has thus become greater. This dampens wage increases, which in turn pushes down prices.

Percentage of those born in Sweden and those born abroad in the labour force, aged 15-74 years. Sources: Eurostat and Statistics Sweden (AKU)  Increased migration in Sweden and abroad During the latter part of the 19th century there was widespread emigration from Sweden to the United States in particular. Around 1.2 million Swedes emigrated to the United States between 1851 and 1930, which at that time was around one fifth of the population. The reasons were in many cases financial, but religious freedom and increased equality were also attractive. There were several factors that enabled emigration. The emergence of the steam ship was one factor. Liberal ideas on economics, politics and freedom – which made a breakthrough around Europe in the 19th century – were other factors. At the beginning of the 20th century, Sweden was an established “emigration country” with more emigrants than immigrants, see Figure 9. This was primarily due to the large-scale emigration, but we also had very few immigrants. In the year 1900 the percentage of people born abroad in relation to the population as a whole was just 0.7 per cent, with most of them coming from other Nordic countries. An interesting fact here is that the immigrants from outside of Europe comprised 90 people from South America, 79 from Africa (56 of whom were from  13 [24]  South Africa) and 87 from Asia.
BIS Review 43/2006  5  The importance of monetary policy Monetary policy cannot affect long-term developments in the potential to produce and compete in the Swedish economy. Technological developments, investment levels, entrepreneurship and the ability of the labour market to adapt all determine the long-term growth rate and employment. The Riksbank can only affect the short-term cyclical variations around the trends in real economic developments (see Figure 11). How do these cyclical variations actually look? Diagram 11 – which should be regarded as an arithmetic example – provides a calculation of the trend unemployment. The difference between actual and trend unemployment is cyclical unemployment – which is higher in a recession and lower in a boom. The trend is determined by factors such as those I just mentioned – i.e. demography, technological developments, labour market policy, wage formation – while cyclical unemployment is determined by transient shocks and can be affected by monetary policy. 5 The diagram shows that – if we disregard the 1990s crisis – cyclical unemployment was 1 percentage point at most (corresponding to 45 000 persons). According to this example, cyclical unemployment varies by an average of 0.6 per cent. This is the margin that monetary policy can affect. However, it is not realistic to believe that this can become zero. We will always have to live with cyclical fluctuations. This is the whole point of stabilisation policy, as Keynes pointed out back in the 1930s; to even out fluctuations between booms and recessions.

There are certain preconditions to be met for a successful implementation of inflation targeting regime. First central bank must have strong team of economists, well functioning transmission channels and the instrument to guide the policies. In this respect the Central Bank of Turkey reorganized its Research and Monetary Policy Department and increased the number of economists with PhD’s. We have strengthened the research capacity and the analytical power of the Department. At the start of the program, high debt to GDP ratio was a problem for debt sustainability and there were high uncertainties about the transmission mechanism. And also due to the high and chronic 30 years of inflation there was not a solid track record of credibility. Between 2002 and 2005, the period of implicit inflation-targeting  1  Trichet, J.C. (2007). “Hearing Before the Economic and Monetary Affairs Committee of the European Parliament”. Brussels, March 21, 2007. BIS Review 57/2007  3  regime, the Central Bank tried to build up its credibility by setting inflation targets together with the Government and achieving them. During the last 5 years’ period debt to GDP ratio fell to sustainable levels, with significant developments in credit markets and a downfall in dollarization levels, which strengthened the transmission mechanism to a large extent. Also the MPC assumed the role of a decision making body, from an advisory one. The currency reform was also a necessary condition for successful IT implementation as the currency with many zeros kept the inflation memories in the public mind alive.
The system-wide dependence on term Libor fixings is an unnecessary vulnerability. A situation in which robust transactions-based benchmarks were more widely used would improve the resilience of the financial system. This is why the FSB recommended the development and implementation of RFRs. And that is why the Bank – given its interest in effective markets and responsibility for financial stability – is committed to supporting the adoption of near risk-free rates as alternatives to Libor. Put simply, we want to see a transition to a less Libor-centric world. What is the Bank doing? We have taken two important steps to support the implementation of a sterling risk free rate. We have taken on the administration of SONIA, the sterling unsecured overnight interest benchmark, and instituted a reform process to strengthen it. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  And we have set up the Sterling Risk Free Rate Working Group to forge a market consensus on the appropriate near risk-free rate and to coordinate wider adoption. SONIA reform The Bank’s aim in reforming SONIA has been to strengthen a benchmark which is already critical for sterling financial markets, but which is currently based on a market for brokered deposits which has limited transaction volumes. A key change is to broaden the input data to include all overnight unsecured deposits, not just brokered deposits. The Bank was uniquely placed to undertake this reform because we have the necessary data, collected under statutory powers.

Over this period, unemployment fell by 1.358 million in the euro area (1.682 million in the EU). In addition, the job vacancy rate was 3.2% in the euro area in the second quarter of 2022, up from 2.3% in the same quarter of 2021. All these figures show that the labour market in Europe remains strong despite all of the difficulties I referred to earlier. Despite this dynamic labour market, wage growth has remained slow over recent months and is still moderate when compared with current inflation rates. In particular, negotiated wage growth increased to 3.1% in July 2022, up from 2.4% in the previous quarter. It is crucial that, going forward, both wage demands and business margins remain moderate to avoid the emergence of significant second round effects, which would only make inflationary pressures more persistent. Whether or not the labour market will remain strong in the future will depend on a host of unpredictable factors. In this context of rising inflation, the ECB Governing Council embarked on a process of progressive monetary policy normalisation at the end of 2021, with the withdrawal of the extraordinary monetary stimulus set in place at the onset of the pandemic. In particular, it was announced that the net asset purchases under the Pandemic Emergency Purchase Program (PEPP) would be discontinued in March 2022. In March, the ECB Governing Council agreed on a gradual reduction to the net purchases under the “regular” asset purchase program (APP).
Early third-quarter partial indicators show a still weak economy, but we must not overreact to monthly data, which tends to be very volatile (figure 7). Thus, we must not be surprised if our growth figures remain low because, as I said, we are experiencing a process of sharper, more persistent economic slowdown. In this sense, our growth forecast revision for this year takes this into account and assumes that, towards the end of this year, we will see some recovery, though small and gradual. Turning to the labor market, the unemployment rate is slightly higher than early in the year, but still low by historic standards. Total employment continues to rise in annual terms, but at a slower pace, and the salaried component has been stagnant for some months. Other indicators, such as available job vacancies, have dropped and unemployment insurance claims have increased (figure 8). Thus, it is natural to expect a rise in the unemployment rate in the coming months. Still, nominal wages continue to grow, which could delay the  4  BIS central bankers’ speeches  convergence of inflation and hinder the adjustment of the labor market to the current cyclical conditions of our economy. As I mentioned, the worsening of our domestic economy has occurred within a context where the monetary impulse has increased substantially. We have cut 150 basis points off the MPR in the past year and the market interest rate structure has diminished accordingly.

The cuts we have already made to the MPR have helped to smooth the business cycle, and, as we have mentioned before and now again in the Report I am presenting, a still stronger monetary impulse will likely be necessary in order to ensure compliance with the inflation target. In particular, given the present conditions, and barring a big change in the economic scenario, we believe that the monetary policy adjustments the market expects, which are implicit in the various expectations indicators at the closing of this Report – end of August – , will suffice to achieve the inflation target and help revive our economy. Monetary policy is an important and significant tool to tone down the cyclical fluctuations of the economy. Its countercyclical use is a privilege that we have earned after years of policy conduct that has strengthened the credibility of the Central Bank. But it is also important to note that powerful does not mean almighty. It allows to mitigate, but not fully offset, the natural fluctuations of a small, open economy like Chile. More importantly, if we wish the Chilean economy to attain higher growth rates in the medium term, it will be necessary to implement measures to encourage investment in both physical and human capital and promote productivity growth, all elements which, incidentally, are beyond the scope of monetary policy. This Monetary Policy Report contains a revision by the Board to its medium-term growth assumption for Chile over the coming years.
If a prospectus is found to be misleading or deficient after it has been registered, MAS can serve a stop order on the prospectus to prevent further issuance or sale of securities to the public. Following a public consultation in August, MAS will issue comprehensive retail hedge fund guidelines by year-end that will include, among other things, a requirement for some specific information to be disclosed in both prospectuses as well as marketing materials. In particular, the material differences between the hedge fund offered and traditional funds. Also the fees and charges. For funds of hedge funds, the method of achieving diversification must be disclosed. Turning to the second pillar – enabling and flexible regulation, the new guidelines aim to align our hedge fund regulations with international best practice, so that well-managed hedge funds from established markets can be offered in Singapore. A key development is to distinguish between single hedge funds, funds of hedge funds and capital protected hedge funds. Recognising that features such as diversification and capital protection would reduce the risk of investing in a hedge fund, MAS will introduce a lower minimum initial subscription of $ for funds of hedge funds. No minimum subscription will be required for capital protected and capital guaranteed hedge funds. Single hedge funds may continue to be offered to retail investors with a minimum initial subscription of $ To maintain professional standards, retail hedge funds must have at least two executives who each have a minimum of five years’ experience in managing hedge funds.

In addition, managers should have at least three of those five years of experience managing funds of hedge funds if they offer this product. Redemptions of retail hedge funds need only be made once every quarter. This is an accepted international practice. Managers who want to provide for more frequent redemptions are free to do so. Redemption procedures should be prominently disclosed. To facilitate the entry of foreign funds of hedge funds, there will be a flexible diversification rule. The rule will require any fund of hedge funds to be diversified either across 15 hedge fund managers or by having not more than 8% of its assets allocated to a single hedge fund manager. This would enable foreign funds of hedge funds to benefit from an earlier liberalisation introduced by the SFA in July this year, which allowed all recognised foreign funds (including hedge funds) to be offered directly to Singapore investors instead of only through feeder funds previously. For a foreign fund to be recognised by MAS, the foreign offeror needs only to register a foreign company in Singapore and appoint a representative to act as a liaison for investors. The fund and its manager should be from a jurisdiction with acceptable regulatory standards. While providing for direct offers of foreign funds into Singapore, the alternative feeder fund structure is still available. A Singapore fund of hedge funds can therefore feed into a foreign fund of hedge funds.
John Gieve: Uncertainty, policy and financial markets Speech by Sir John Gieve, Deputy Governor of the Bank of England, at the Barbican Centre, London, 24 July 2007. *  *  *  Introduction When I took on this job last year, interest rates had moved only twice in 24 months – once up by 25bp and once back down again. Elsewhere we had seen, both in the US and the EU, two years in which rates had been on a well signalled upwards path, while interest rates in Japan remained anchored to zero. The “Great Stability” seemed to have reached its zenith of total predictability. However, one of the things that struck me from the outset in the MPC was that the predictability outside was not matched by any complacency or self certainty inside. There was a vigorous debate underway about the state of the economy and the policy response. At that stage, some members of the committee doubted that the economy and employment would recover from the slowdown in 2005 without a further reduction in rates, while others, notably David Walton, saw emerging dangers on the other side. The economy has strengthened since then and we have had to raise interest rates 5 times in the last year. One thing that has not changed is the vigour of the internal debate. This is not (only) because economists are famously argumentative. As someone once noted, economics is the only field in which two people can get a Nobel prize for saying opposing things!

These very solid foundations will help Hong Kong cope with the challenge of a possible rise in non-performing financial assets and losses in the financial markets. They also supply the conditions for moving beyond crisis towards opportunity, and for exploring what seems set to become one of the strongest and more interesting of growth engines in markets in this region and beyond: Islamic finance. Like most other asset classes, the growth of Islamic finance decelerated last year as a result of the global credit crunch and unfavourable economic conditions. New sukuk issuance retreated to $ billion last year, down from a high of $ billion in 2007. 1 And without a doubt, there will continue to be great challenges in the coming year. Market participants are reportedly expecting a slowdown in annual growth in global Islamic banking assets to 10-15% in 2009, compared with a growth of 20-30% last year. 2 Even so, a growth rate of 10-15% is robust by any standard, and especially so when set against the strong shrinkage in other areas of finance. There remains a healthy stock of sukuk issuance in the pipeline for this year, thus providing a good market to tap: one report conservatively estimates planned or announced sukuk for 2009 as being in excess of $ billion. 3 As a new asset class, Islamic finance practices banking and investments in compliance with the principles of Islamic Shariah law, which prohibits excessive leverage, risk-taking and uncertainty, and promotes ethical practices.
One of the main motivations for this rapid research effort is the swiftly decreasing use of cash. Just some two per cent of the money supply is now created directly by the central bank in Sweden, for instance. But even the avant-garde Swedes consider the e-krona a complement of cash, not a fully-fledged substitute. The potential advantages of distributed ledger technology and central bank digital currency are the following: more efficient payment systems, direct and more efficient conduct of monetary policy (perhaps even practically enabling helicopter drop of money) and, if implemented on a sufficiently large scale, an end to the need to run costly deposit insurance schemes. But will central bank digital currency become a complete alternative to cash one day? I’m not sure. Many questions remain: anonymity, susceptibility to cybercrime and IT issues. But above all those, a key issue arises: the problem of competition. Will the central bank change into a direct competitor to commercial banks? Will it serve as a “bank of last resort” for all deposits in bad times? Should it also provide credit to the real economy? Might it become a real monobank, like the ones we saw a few decades ago in former socialist countries? What would the entire money-creation process look like? These questions are too important to rush around. So far it seems to me like social engineering to talk about abolishing cash fully and issuing digital currency instead.

Our fault as central bankers is that we have been unable to explain, at least in many developed countries, that one of the key reasons for the actions we took during and after the Great Recession was simply to keep the price stability, i.e. to keep the purchasing power of money relatively constant and predictable. Yes, sometimes it required unorthodox policies. In conservative societies, people tend to fret about too much money being “created”, but they typically have no idea whatsoever about how much money there actually is in circulation, how large the effective money supply is. When I ask about the size of the money supply even in front of well-educated audiences, I often get estimates that are wildly off the mark. In contrast, I obtain very precise answers on the rate of inflation. Price stability, not money supply, matters. Bitcoin nicely illustrates the very essence of the current monetary policy, which relies on elastic money. It is a policy of nominal stabilisation of prices, of the purchasing power of money. In consequence, the impact of shocks does not require tough adjustments through wages and employment. So, as long as central bankers abide by the principle of purchasing power stabilisation, I’m not afraid that any newly invented fixed money system will spontaneously prevail and become dominant. The fact that current money is fiat, not really in line with my libertarian friends’ dreams, is less important than price stability, I would say.
Under the second phase of the FSDP, access to finance by the various strata of society, including access based on gender is identified as a key weakness to be addressed. The development of the FSDP and its implementation, therefore, reflects the priority attached by the government to this subject. The Bank of Zambia as the lead coordinator for the Financial Sector Development Plan (FSDP) has also incorporated Financial Inclusion as one of the key objectives under its Strategic Plan for the period 2012 – 2015, namely; to increase financial inclusion to 50 per cent of the population by 2015. The strategies under this objective include the following: 1. Develop an index to measure the depth and breadth of financial services in Zambia. 2  Promote agency banking and mobile banking. 3  Develop guidelines for branchless banking framework. 4  Establish a unified collateral registry framework. 5  Establish Financial Education Coordinating Unit (FECU). 6  Undertake financial education interventions specific to BoZ mandate. 7  Revise legal and regulatory framework to promote financial inclusion. 8  Develop incentive mechanisms to encourage outreach of financial services to rural areas and other financially excluded citizens. In order to ensure that persons who are excluded, both in urban and rural areas do not encounter difficulties in opening bank accounts, the know your customer (KYC) procedures for opening and operating accounts has been simplified.

The simplified procedure or relaxed „KYC‟ note allows banks to use various forms of reference documentation such as community leaders other than the traditional approach used in the past. In addition, over the years, there have been a number of positive developments in the economy. Some of these include easier access to banking services through lower bank account opening balances; relaxed KYC procedures for opening and operating accounts; improved payments systems through mobile banking, e-money, increased numbers of ATMs and point of sale terminals, and improved access to foreign exchange through various bureau de change across the country. We have also seen a broader range of financial services, including products tailored for women. Under the second phase of the FSDP, Government is implementing a number of programmes, and building capacity for key stakeholders. Specific milestones include:  BIS central bankers’ speeches  3  (i)  Development of a rural finance policy – a draft report has been developed and among others, focuses on proposals for developing warehouse certificate systems, supporting financial services providers towards rural banking as well as agency banking and initiatives for rural branch expansions (e.g. Natsave). (ii)  Establishment of development fund – DBZ is now the appointed apex body for wholesale funds and is also expected to launch an enterprise development fund co-financed with the Zambia Development Agency (ZDA).