samchain/econo-pairs-v1 huggingface dataset:
Consequently, banks which sold euros for less than CHF 1.20 did not receive the best market price and had – relatively speaking – to accept losses. Since there is no compulsion to make business transactions at the best prices, such anomalies cannot always be excluded. However, they can only be maintained for a very short period. How is the SNB organised in operational terms for implementing the minimum exchange rate? Since the introduction of the minimum exchange rate, the SNB has monitored the foreign exchange market from market opening in Asia on Sunday evening to market closing in New York on Friday evening without any interruption. The same applies to holidays. The interbank market, which is the market of relevance for the SNB, includes its counterparties. The SNB accepts well over 100 banks with more than 700 trading desks as counterparties. Thanks to this network of contacts, the global foreign exchange market is almost completely covered. On the part of the SNB, the trading limits amount to some hundreds of billions of  BIS central bankers’ speeches  1  euros a day. These limits can be flexibly adjusted by the SNB, should this be necessary. Via electronic trading systems, the banks have access at all times to the offers. The SNB’s strategy for implementing the minimum exchange rate has proved effective – including in the last few days. On the relevant interbank market, CHF 1.20 per euro qualifies as the lowest exchange rate. Consequently, the minimum exchange rate applied at all times.

Does the minimum exchange rate continue to apply? Yes. Without any qualification. The SNB has successfully enforced the minimum exchange rate and will continue to do so, without any restrictions. The Swiss franc is still overvalued and represents a substantial challenge for the Swiss economy. The SNB continues to expect that the Swiss franc will weaken. Should the economic outlook and the risk of deflation so require, the SNB stands ready to take further measures at any time. 2  BIS central bankers’ speeches
Firstly, in order to unlock the long-run potential growth, well-established infrastructure will be one of the crucial pillars that will sow a seed of a healthy investment climate conducive for growth. Such that, infrastructure upgrade requires time, yet necessary. Investment in logistic areas including increasing road density, better railway system, modernized airports and seaports will all lead to the enhancement of both production and distribution processes whereby strengthening connectivity among members. Preeminently, concrete long-term plans on infrastructure projects are vital in order to attract large pool of regional savings to meet investment needs. A set-up of Asian Infrastructure Investment Bank or AIIB comes at a right juncture to raise potential for infrastructure financing for the whole region. Also, governments’ clear focus on infrastructure upgrading will facilitate the growing cross-border trading activities. I am glad to see the continued cooperation between Thailand and other GMS members in linking our rail networks and roads in order to foster trade and investment interconnectedness among us. 12. Secondly, despite physical infrastructures in place, lack of innovative ideas to leverage on existing knowledge and technology could undermine the potential of the region. With this bottleneck, the economies may face limitation in sustaining their competitive advantage, which currently rely heavily on the exploitation of natural  2  BIS central bankers’ speeches  endowments and support from the government.

And on the prospect of the GMS going forward, I would like to leave you with the vision of Mr. Lee Kuan Yew who viewed Singapore as computer hard drive, and the foreign talents being the megabytes of storage capacity added to the computer. The computer will thus never hang given its enormous storage capacity. Likewise, the increasing interconnection among the GMS countries can help expand production potential and economic opportunities by utilizing each other’s spare capacity. I am therefore convinced that the conference today will also help generate more megabytes to our storage, which would help smooth our journey of transformation towards the sustainable growth of the region. Thank you. BIS central bankers’ speeches  3
8  BIS Review 130/2010  Figure 1 GDP gaps in September 2010 and in real time Per cent  Source: The Riksbank. Figure 2 Historical GDP trends Index 2000 = 100  Source: Statistics Sweden and the Riksbank. BIS Review 130/2010  9  Figure 3 GDP, hours worked and productivity Index 2007 Q4 = 100  Note: Broken lines denote the Riksbank’s forecasts in MPU September 2008. Sources: Statistics Sweden and the Riksbank. Figure 4 The GDP gap according to the Riksbank, the National Institute of Economic Research and the Ministry of Finance Per cent  10  BIS Review 130/2010  Figure 5 The GDP gap according to the Riksbank, the OECD, the IMF and the European Commission Per cent  Figure 6 Labour market gaps Percentage deviation from the HP-trend and from the average 2000–2007, seasonally-adjusted data  Note. Broken lines denote the Riksbank’s forecast in MPU September 2010. Sources: Statistics Sweden and the Riksbank. BIS Review 130/2010  11  Figure 7 Indicators for the business sector Deviation from the average, percentage points  Note. Companies’ inflation expectations 12 months ahead are denoted in tenths of a percentage point. Source: National Institute of Economic Research. Figure 8 Shortage of labour in the business sector and capacity utilisation in the manufacturing industry Deviation from average 1996–2007  Source: National Institute of Economic Research.

The way money fits into this framework was well illustrated by Nicolas Oresme, who was bishop of Lisieux and adviser to Charles V, the king of France. In 1360 Oresme initiated a sweeping monetary reform after a period in which the currency was debased many times. A comment that is attributed to him at this time is that “Money must be as solid as a law, as stable as a law of nature”.1 In essence, what Oresme was saying was that solid law and stable money are two sides of the same coin (if you will forgive the expression). They both support the ends of the individual. The law exists to create an environment in which individuals can make free and safe decisions. Money is the same. And both are pre-conditions for a market economy to function. Even one of our most famous Luxembourgeois, John the Blind, implicitly appreciated these interactions. By experimenting with various currency reforms he sought to ensure that each coin in his realm would have the same value in trade and commerce, regardless of its geographic origin or disparities in physical appearance. At the time of course the debate was about the law of God taking precedence over the law of kings. But fittingly, his motto was “Ich dien” – German for “I serve”. And indeed, this notion of money as “public service” was exported and lived on: the same phrase appeared on British two pence coins until 2008.
Switzerland: 2012 Article IV Consultation – Staff Report; Public Information Notice on the Executive Board Discussion. Statement by the Executive Director for Switzerland. IMF Country Report No. 12/106. May 2012. Jordan, Thomas. 2011. “Does the Swiss National Bank need equity?” SNB. Speech to the Statistisch-Volkswirtschaftliche Gesellschaft. Basel. 28 September 2011. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7

2  BIS central bankers’ speeches
The third pillar is the revival of public investment: the use of public resources to push forward investment in infrastructure and human capital, research and innovation at national and European levels. (The proposed strengthening of the EIB and the reprogramming of Union structural funds in favour of less-developed areas go in this direction). Thus, a growth compact complements the fiscal compact, because there can be no sustainable growth without orderly public finances. In this regard I have noted on other occasions the extraordinary progress made by all governments of the euro area in terms of fiscal consolidation, but, once the emergency is overcome, they need to make improvements by cutting current spending and taxation. Let me now consider some issues more directly related to the ECB’s monetary policy and action. Objectives and instruments The first issue involves the relationship between objectives and instruments of economic policy in a macroeconomic reference model that changes over time. For Caffè, one of the first scholars of Frisch and Tinbergen, the optimal allocation of tools and objectives occurred in the reference model prevalent in the 1970s, in which the goal of economic policy was to make best use of the available resources, in particular full employment. In pursuit of this goal, monetary policy was subordinated to fiscal policy, with an ancillary role for the central bank vis-à-vis the Treasury. The reference macro-model was based on a static mechanism of elaborating expectations, which were formed by extrapolating from past observations to the future.

4  BIS central bankers’ speeches  non-constant parameters allow the identification of a range of values that quantify the cost in terms of growth failure for every two percentage point increase in steady-state inflation. This cost implies lower growth of between 3 and 5 percentage points over a period of ten years. Finally, monetary policy is a powerful tool. When used improperly, it may cause permanent damage. But it can become an effective, stabilising factor and contribute to collective prosperity in an independent and active way. The sine qua non for this is to build monetary policy decisions into a systematic and predictable strategy, based on price stability, which drives expectations and guides the economy but doesn’t shock it. This is perhaps the most important practical difference to what was studied in the early 1970s. The ECB’s monetary policy strategy  The ECB’s monetary policy strategy is based on the new theory of the instruments I have tried to outline, and takes into account the enrichment of the theory of objectives, which emphasises the contributions of price stability to the “general prosperity”. It also provides continuity for a monetary tradition in continental Europe that has ensured inflation-free growth for more than 60 years. The strategy is based on the objective of “maintaining price stability” that the Treaty has entrusted to the central bank and the quantitative definition that the Governing Council subsequently gave the objective.
A krone that is too strong can over time result in inflation that is too low and growth that is too weak. In that case, monetary policy measures will be taken. In Norway, the key policy rate is the relevant instrument. The Norwegian krone market is small by international standards. This means that the krone exchange rate can fluctuate considerably in times of international turbulence. This will also be the case the day foreign exchange market participants decide to shift out of their krone positions. The exit may prove narrow if too many investors decide to withdraw at the same time. I began my lecture with Schweigaard’s childhood experience of his family having to surrender gold and silver for the establishment of Norges Bank. This experience cannot have given him much confidence in public institutions. As an adult, both as a professor of economics and a national politician, Schweigaard became a trendsetter in the area of monetary policy conduct. Schweigaard’s fundamental view was based on “empirical methods” rather than the “empty speculation” of idealism.12 This still applies to monetary policy. Theoretically anchored models and improved methods for quantifying them empirically provide a better basis for conducting an effective economic policy, which we take on board when we apply and further develop models and the analytical apparatus in Norges Bank. Knowledge about relationships in the Norwegian economy, in conjunction with professional judgement, provides a good platform. Thank you for your attention and good luck with your studies!

Prasarn Trairatvorakul: Recent challenges and the way forward Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Japanese Chamber of Commerce Dinner Talk, Bangkok, 22 March 2012. *  *  *  Good evening, Distinguished guests, Ladies and Gentlemen, I would like to thank the Japanese Chamber of Commerce for inviting me to speak again at this special annual event. Each of these years has brought us yet more economic surprises and challenges. In 2010, the world economy grew surprisingly fast and the Thai economy promptly rode on the wave of global recovery. Then last year, the European sovereign debt problem erupted and depressed the global economic environment, while at home both of our economies were badly hit by devastating natural disasters that took a heavy human and economic toll. In Thailand, the damage from the floods was indeed severe. Output loss was estimated to be around 3.2 percent of GDP and economic activity contracted sharply by 9 percent year-on-year in the last quarter of 2011. Manufacturing and agricultural outputs as well as exports were severely dented. The automobile industry, which was just recovering from the supply chain disruptions following the earthquake and tsunami in Japan, was hit especially hard. But as you are well aware, shocks from natural disasters are temporary in nature. They tend to be followed by rapid resumption of economic activity as things get back on track, as was the case with Japan in the aftermath of the earthquake.
A second option to improve the Fed’s control over short-term rates is to drain reserves by offering banks term deposit accounts in which to invest funds for longer terms than overnight. There are two issues that might make this option somewhat less attractive. First, to strengthen monetary policy control significantly through this course, it might be necessary to drain most of the $ trillion of reserves. This could be done of course with effort, but is the effort worth it? Second, the Fed would undoubtedly have to “pay up” to induce banks to hold term deposit accounts relative to keeping their monies in reserves at the excess reserves interest rate. This would likely result in higher Fed interest expenses relative to relying on an overnight RRP facility to set a floor on money market rates. The choices here are important and I expect that considerable testing, analysis and discussion will be necessary to reach firm conclusions about the appropriate course. My goal would be to clarify our intentions later this year, long before we begin to contemplate raising short-term rates. I also think that the choices are about how to conduct monetary policy during the transitional phase, not about the long-term monetary policy framework. Longer term, the issue will be whether to return to the type of corridor system that was in place prior to the crisis or to instead to stay with the type of floor system that will likely be the type of regime that is in place as the balance sheet gradually normalizes.

As advanced economies drive global demand going forward, these sectors stand to benefit, as seen in the recent pickup in exports of automotive parts and printers to the U.S. There is much potential for movement to competitive sectors, as Thai labor is recognized for quality in complex manufacturing as well as delicateness in services. Leading global auto manufacturers for instance are committed to long-term investment in Thailand. At this stage, government can play an essential role in development of skills in the labor force. The alignment of hiring needs, education in relevant skills, and the right incentive structure is the most important requirement to unlock Thailand’s productivity limit. BIS central bankers’ speeches  3  Furthermore, policy consistency and transparency are necessary for businesses to be certain about their long-term investments. Misalignment of policies, both between agencies and across regimes, must be reduced while concrete long-term plans should be communicated to businesses on the regular basis. The current government is aware of the need for supply-side development policies, and is implementing policies to improve infrastructure, support SMEs, and increase research and development, and will recommend continuation of these policies to the next government for consistency. Ladies and Gentlemen, I mention these structural challenges as I have in my previous talks, as complex issues benefit from the sharing of ideas. However, let me now move to issues within the direct mandate of the Bank of Thailand. Although less often mentioned, the Bank of Thailand’s roles in lifting growth potential still exist. Two roles are worth mentioning.
I have seen several examples where the old policy rule is used in discussions concerning the new interest rate path. This is fatal, as it can lead to entirely wrong expectations of monetary policy. The old policy rule is dead and the market now needs to bury it. Even with the new outlook we care about developments in the real economy when making monetary policy decision. If, for instance, the forecast inflation rate were to be close to target two years ahead, but showed a rapid acceleration at the same time as growth in the real economy was high, it is possible that the implied forward rate path could not be expected to reflect a desirable development in the repo rate. In this type of situation it is possible that the repo rate would need to be raised more quickly at the beginning of the forecast period. When we make our decisions regarding the repo rate, we thus do not merely look to see whether inflation is close to target two years ahead, we take into account the entire development paths for inflation and the real economy. A desirable monetary policy is characterised by inflation under normal circumstances being close to the inflation target in a twoyear time perspective while at the same time the paths for inflation and the real economy do not exhibit excessively large fluctuations.

Two questions in particular tend to arise: Do we only take into account inflation, or do we also care about the real economy, for instance, the employment situation? And what do we think of the rapid increase in household indebtedness and in property prices? The aims of monetary policy To understand the monetary policy decisions, it is of course essential that there is no uncertainty regarding the objective of monetary policy. There is only one statutory objective for monetary policy and that is to maintain price stability. We at the Riksbank have then chosen to specify this objective in terms of an explicit inflation target. This entails an annual change in the consumer price index (CPI) of 2 per cent with a tolerance interval of ± 1 percentage point. One might ask why we allow a certain measure of inflation when Parliament has given us the task of maintaining price stability. One reason why we have chosen not to set the inflation target at zero is that an inflation target that is too low can under certain circumstances create adverse conditions for employment. There is an inbuilt resistance within the economy to nominal reductions in prices and  1  See “Monetary policy in Sweden", Sveriges Riksbank (this document can be downloaded from the Riksbank’s website, www.riksbank.com, or ordered as a booklet). BIS Review 84/2006  1  wages and a certain measure of inflation can therefore make it easier to implement necessary changes in relative prices and wages.
But neither is it merely a single one: I would characterise it as a two-tiered mandate that includes at least two other objectives without prejudice to price stability: on the one hand “to support the general economic policies in the Union” contributing among other aims to a “social market economy, aiming at full employment and social progress”1; and on the other hand “to safeguard the stability of the financial system”2 Furthermore, I would argue that there is still less of a difference between a dual mandate and flexible inflation targeting in the present economic context : notably, the measures we have taken to offset the effects on inflation of negative shocks such as the global financial crisis or the health crisis have a direct effect on growth and employment. 2/ Average inflation targeting is a flexible tactic, possibly temporary, within a wider strategy of keeping inflation sustainably where expected. But still more importantly, our inflation objective has to be symmetric and medium-term. As regards symmetry, I cannot do better than quoting Christine Lagarde in her impressive speech of September 30th: “In the current environment of lower inflation [compared to 2003 and our previous strategic review] (…) to underpin inflation expectations, we need to ensure that our aim is perceived to be symmetric by the public”3. I personally add that we might therefore be willing to accept inflation higher than 2% for some time, without mechanically triggering a tightening of our monetary stance. Medium-term means that we should judge our inflation performance over a long enough period.

Nor is the softer version of this idea – converting this debt into perpetual bonds. Let us be clear on this: the public debt pile – which has risen sharply – will need to be paid back eventually… To do so, three combined levers will have to support the necessary debt reduction strategy: 2/5  BIS central bankers' speeches  1 / We will first need time in order not to phase out fiscal accommodation too early, and create cliff effects like in 2011–12. We should resume the debt-ratio reduction after growth returns to its pre-crisis level probably around 2022. But fiscal policy cannot simply be countercyclical in bad times; the same thinking needs to be applied in better times as well. 2/ Growth is indeed a key determinant in financing the debt inherited from the crisis. This leads me to the debate initiated early last year by O. Blanchard. First, the best way to ensure that the differential between the interest rate and the growth rate (r-g) remains negative – which is not granted forever, nor everywhere – is to increase g. And hence, let us listen to the balanced message of Blanchard: “public debt is bad, but not catastrophic. It can be used, but it should be used right.” Unfortunately, the quality and the content of public spending is too often the “blind spot” in the fiscal debate. In August, M. Draghi quietly coined the telling expression of “good debt”.