samchain/econo-pairs-v1 huggingface dataset:
Food price inflation edged higher to 14.1 per cent, as the past surge in the cost of energy and of other inputs for food production is still feeding through to consumer prices. Price pressures remain strong, partly because high energy costs are spreading throughout the economy. Inflation excluding energy and food remained at 5.2 per cent in January, with inflation for non-energy industrial goods rising to 6.9 per cent and  2/4  BIS - Central bankers' speeches  services inflation declining to 4.2 per cent. Other indicators of underlying inflation are also still high. Government measures to compensate households for high energy prices will dampen inflation in 2023 but are expected to raise inflation once they expire. At the same time, the scale of some of these measures depends on the evolution of energy prices and their expected contribution to inflation is particularly uncertain. Although supply bottlenecks are gradually easing, their delayed effects are still pushing up goods price inflation. The same holds true for the lifting of pandemic-related restrictions: while weakening, the effect of pent-up demand is still driving up prices, especially in the services sector. Wages are growing faster, supported by robust labour markets, with some catch-up to high inflation becoming the main theme in wage negotiations. At the same time, recent data on wage dynamics have been in line with the December Eurosystem staff projections. Most measures of longer-term inflation expectations currently stand at around two per cent, but these warrant continued monitoring.

Christine Lagarde: ECB press conference - introductory statement Introductory statement by Ms Christine Lagarde, President of the European Central Bank, and Mr Luis de Guindos, Vice-President of the European Central Bank, Frankfurt am Main, 2 February 2023. *** Good afternoon, the Vice-President and I welcome you to our press conference. We would like to begin by congratulating Croatia on joining the euro area on 1 January 2023. We also warmly welcome Boris Vuji, the Governor of Hrvatska narodna banka, to the Governing Council. We will now report on the outcome of today's meeting. The Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to our two per cent medium-term target. Accordingly, the Governing Council today decided to raise the three key ECB interest rates by 50 basis points and we expect to raise them further. In view of the underlying inflation pressures, we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March and we will then evaluate the subsequent path of our monetary policy. Keeping interest rates at restrictive levels will over time reduce inflation by dampening demand and will also guard against the risk of a persistent upward shift in inflation expectations. In any event, our future policy rate decisions will continue to be datadependent and follow a meeting-by-meeting approach.
This brief review shows, I believe, that in periods with a heavily regulated financial system, the world economy has been somewhat less prone to generate pronounced financial cycles. It should be born in mind, however, that the regulations also created other problems which impeded long-term growth. Innovations and new enterprises are hardly stimulated when banks and markets are closely regulated. So it is symptomatic that the high growth in the 1950s and ‘60s came mainly from the rationalisation of existing firms rather than from new enterprises. When the deregulation of trade and of markets for goods and services got under way again in the decades after World War Two, attention was naturally drawn to the financial barriers that the tight regulations had set up against future growth. An awareness of the need for new, expanding companies and the emergence of new markets made it natural to promote this with a freer financial system. While this financial deregulation was probably both natural and necessary, it also meant that the world economy again became vulnerable to the kind of exaggerated optimism, with the attendant risk of pronounced financial cycles, that had characterised the late 19th and early 20th centuries. Meanwhile, the institutions connected with the financial system had lagged behind. By “institutions” I mean everything in and around the financial system that affects its development. Examples are sets of rules, the banking system as such, the general public, the political system, the authorities and the media. The shortcomings took various forms. Important rules were wrongly formulated or non-existent.

Perhaps a society has to undergo a learning process on a broad front so that earlier mistakes yield new insights. Economic policy decision-makers like myself are, of course, no exception here. But as financial turbulence does not inevitably lead to a serious crisis in the real economy, we need to ask why it is that in certain cases output and employment do suffer severe setbacks and the attendant deflation. Much will have been gained if we can learn to tell whether or not an extensive share price fall, for example, besides being troublesome enough for many people, is likely to result in a situation with general deflation, rapidly falling output and rising unemployment. An answer to that question was suggested in the summer of 1999 by the Federal Reserve chairman, Alan Greenspan: While bubbles that burst are scarcely benign, the consequences need not be catastrophic for the economy. The bursting of the Japanese bubble a decade ago did not lead immediately to sharp contractions in output or a significant rise in unemployment. Arguably, it was the subsequent failure to address the damage to the financial system in a timely manner that caused Japan’s current economic problems. Likewise, while the stock market crash of 1929 was destabilising, most analysts attribute the Great Depression to the ensuing failures of Policy. Most things indicate that when banks run into trouble on account of financial turbulence, the supply of credit may dry up and the payment system cease to function.
We are appreciative of the confidence placed in us by the Federal Council and by parliament. In guaranteeing our independence, the Federal Constitution gives us the means to act entirely in the interests of monetary stability. The political authorities can count on us using our freedom of action solely in the interests of fulfilling the mandates with which we are entrusted by the legislator. We are also aware that, despite our efforts to communicate our decisions, the general public often finds them difficult to understand. That is why we truly value the confidence that the public places in us. It helps to sustain us when carrying out the mandate with which we are entrusted under art. 99 of the Federal Constitution, that of conducting a monetary policy that serves the interests of the country as a whole. Finally, I would also like to thank you, the shareholders of the Swiss National Bank. As representatives of cantons, cantonal banks, collective bodies or Swiss public law institutions, or as individual shareholders, you have faithfully supported the Swiss National Bank since its foundation in 1907. You have remained at its side throughout all the ups and downs of its history and we are grateful for your support. Your presence is the guarantee of our independence, an essential factor in the success of our efforts to preserve the monetary stability of our country. 4  BIS Review 40/2007

The banking system expanded very rapidly in just five years, from a combined balance sheet of less than 2 times GDP (at the end of 2003) to almost 10 times GDP (in mid-2008). Most of this expansion was cross-border, and a lot of it had very little to do with Iceland, as both financing and investment took place abroad. A number of domestic mistakes were made throughout the process, and I do not have time to go into them here, but the expansion of the banks was greatly facilitated by Iceland’s membership in the European Economic Area (EEA), as the EEA Agreement provides a legal and regulatory framework based on European Union Directives, including free movement of capital and provision of financial services. The underlying principles are those of home licencing for operations anywhere in the EEA and of a level playing field for competition, where size and location supposedly do not matter. This European “Passport” enabled the Icelandic banks to operate throughout the EEA, including through branches in other EEA countries. We now know that there are deep flaws in this framework and that these flaws are important elements in the current euro area crisis. A key issue here is the contradiction between, the European passport rights on the one hand and, on the other hand, national supervision, national deposit insurance and national crisis management and resolution regimes. This is what recent proposals of a banking union are supposed to deal with.
Drawing on available estimates, the median of this indicator for the corporate sector as a whole is expected to fall from 3% pre-COVID-19 to virtually zero in 2020, in any of the macroeconomic scenarios considered by the Banco de España. Large firms are generally expected to suffer less pronounced falls in profitability. In any event, the operating deficit generated by many firms would lead to a deterioration of their financial position, resulting in lower own funds and higher debt to finance their liquidity needs. Thus, in the aforementioned early recovery scenario, the financial position of 55% of firms (with a weight of 51% in employment terms) would worsen in 2020, while in the more adverse scenario, this proportion would rise to 58%. However, despite this strong negative impact, around 40% of firms would continue to generate an operating surplus and to make new investments without a worsening of their financial position. In short, a significant number of firms are very likely to emerge from this crisis with higher debt levels and a diminished demand outlook, at least for some time. In this respect, it is also necessary to review the debt relief, restructuring and insolvency processes for firms, 5  with the aim of establishing pre-emptive, swift and simplified administrative procedures enabling them to pursue their business activity while they are still viable.

In the meantime, I am pleased to note that the first RMB equity securities have been listed on the Hong Kong Stock Exchange. •  Third, there will also be a need to enhance the price discovery process and related market infrastructure for RMB transactions. This will mean introducing the necessary benchmarks for RMB transactions in the offshore market, including an exchange rate fixing, interest rate fixing and various kinds of benchmarks for RMB investments. The Treasury Markets Association introduced spot USD/CNH fixing in June 2011, and they recently announced the June 2013 launch of CNH HIBOR fixing. This welcome development will provide a reliable benchmark to price loan facilities and facilitate the development of the offshore RMB interest rate swap market. Global hubs and linkages The fourth and final characteristic – the presence of a network of global hubs and linkages – is especially apt for all of us in this room today as we consider Hong Kong’s role in the nascent offshore RMB market. The Eurodollar market, which originated in London, is made up of different hubs connected by extensive links. London remains a major centre, while other hubs serve other time zones and networks, and together they form an integrated whole through the free flow of funds. In 2004, Hong Kong was the first offshore market to launch RMB business, and since then it has provided an efficient and reliable settlement platform from which trade settlement is conducted, RMB liquidity built up, financing activities arranged and a wide range of RMB products developed.
Even if the Guidelines themselves remain as they are, and there is some merit in the flexibility which their current brevity provides, it may be appropriate to re-launch the Guidelines as part of an initiative to improve the familiarity of banks with the Hong Kong approach to workouts. This would stress among other things the need for a spirit of give and take, and a recognition on the part of the banks that “united we stand, divided we fall”. One way of doing this would be for HKAB and the HKMA to host a joint seminar on the Guidelines to which the chief executives of all banks in Hong Kong would be invited. However, it is clear from what I have said earlier that the head offices of foreign banks may also have to be brought more into the picture, in particular to try to ensure that decisions on workouts can be made in a more timely manner. One possibility would be for the HKMA to write to the head offices of all the foreign banks in Hong Kong to describe the thinking behind the HKAB Guidelines and to explain that we expect banks in Hong Kong to comply with them to the fullest extent possible. I intend to write to HKAB to seek its views on these initiatives. The preparation of this speech has helped to concentrate my thoughts on the issues involved, and I would like to thank Amcham once again for giving me the opportunity to speak to you today.

It would do so by imposing a moratorium on legal proceedings against the company which could be extended for up to 6 months or even beyond with the consent of the creditors. During this time a provisional supervisor would take control of the company and formulate a restructuring proposal to be put to creditors which are bound by the moratorium. A statutory framework of this kind has its own drawbacks, but the general view seems to  BIS Review 45/1999  4  be that it would be particularly useful in giving a breathing space to smaller companies and freeing the lead banks from the effort of having to keep creditor banks in line in such cases. The non-statutory form of workout will however still be required even if the proposed legislation on provisional supervision goes ahead. To make this work more effectively, it would appear to be timely to review the operation of the HKAB Guidelines a year after they were launched. It may be desirable to issue additional guidelines on various aspects of the workout process, for example on the role of the steering committee, the operation of a standstill or the provision of new money. There may also be scope for clarification of the role of the investigating accountants, in particular whether they should be appointed by the borrower, as at present, or by the banks.
In the chart, we compare the second-highest decile of wage earners with the lowest decile. Wage differentials are smaller in Norway than in any other OECD country. In the US, the group of  4  From Jon E. Dølvik, T. Fløtten, G. Hernes and J.M. Hippe (2007): “Hamskifte – Den norske modellen i endring (Fundamental shift – the Norwegian model in flux”, p.15, Gyldendal Norsk Forlag A/S. Norwegian only. 5  Richard B. Freeman: “Labor Market Imbalances: Shortages, or Surpluses, or Fish Stories?”, at the Boston Federal Reserve Economic Conference, June 14-16, 2006. 6  BIS Review 18/2008  wage earners in the second highest decile earn almost five times as much as the lowest decile while in Norway that group only earns twice as much. Thus, the fundamental shift in economic policy and sharp income growth in Norway have not resulted in substantial wage disparities. When the EU assesses income distribution, low income is defined as less than 60 per cent of median income. 6 Compared with other European countries, the low-income group is small in Norway and the other Nordic countries. In Norway, 11 per cent of the population is defined as low-income earners, while the average for the EU is a good 15 per cent. In addition, the Nordic countries provide a high level of government-financed welfare services. Analyses of low income do not take into account that income levels in Norway are very high. The threshold for low income in Norway is shown by the line in the chart.

There were reports of defaults on mortgage loans, but it was generally believed that the loans at risk were confined to a small segment of the market. The first warning of more severe problems came in winter last year. In the course of summer, it became clear that the losses had spread, and in the first instance to state-owned German banks. Other banks, funds and financial establishments in Europe, Asia and the US also felt the turbulence and gradually losses emerged where we perhaps least expected them. A European colleague compared the financial turbulence to a film production: It was shot in the US, premiered in Germany and is now playing all over the world. As you know, it also came to small-town cinemas in Norway last autumn. In addition to German banks, a small Danish bank and a fairly large British mortgage bank were faced with serious problems. At St James’ Park in Newcastle, advertisements for the crisis-hit British bank Northern Rock shine towards us. We are indeed witnessing crises at banks in neighbouring countries. 1  Yngvar Ustvedt (1994) “Henrik Wergeland – En Biografi”, Gyldendal Norsk Forlag A/S. 2  Source: www.dokpro.uio.no. Text from “Henrik Wergeland – Samlede skrifter”, ed. Herman Jæger, Didrik Arup Seip, Halvdan Koht and Einar Høigård, published by Steenske Publishers, 1918-1940. Poem translated by Anne Born, published in "The Army of Truth", The University of Wisconsin Press. BIS Review 18/2008  1  The turmoil spread to money and credit markets in August.
Any agreements concerning wage increases should take their lead from the underlying inflation. These recommendations apply to both wage increases and, where applicable, to potential wage guarantee clauses. Arrangements such as these have already been used by the social partners in the past and have proven a useful tool for protecting jobs, making firms more competitive and spurring economic growth.10 Fifth, these guidelines on wage developments should be accompanied by explicit commitments to moderate profit margins. Only then will such wage restraint actually make firms more competitive, while, in turn, limiting the extent to which rising energy input costs are passed through to other goods and services in the economy. And some sort of mechanism would have to be set in place to ensure this restraint in profit margins can be verified. The simulations performed using the Quarterly Macroeconometric Model of the Banco de España (MTBE) underscore the benefits of a successful incomes policy. The MTBE  8  The weight of energy inputs in production and exposure to international competition vary considerably across sectors and firms. 9  To varying degrees, these types of clauses mean that, regardless of the type of underlying shock, any potential future price rises automatically pass through to wage increases, thereby triggering the second-round effects we hope to avoid.

The maturing principal payments from securities purchased under the PEPP will be reinvested until at least the end of 2024, and in the event of renewed market fragmentation related to the pandemic, PEPP reinvestments can be adjusted flexibly. Further, at our meeting of 14 April, the Governing Council judged that the incoming data reinforced our expectation that net asset purchases under the asset purchase programme (APP) should be concluded in the third quarter of 2022. We also indicated that the raising of key ECB interest rates will take place some time after the end of the net purchases and will be gradual. Lastly, the ECB Governing Council stated that we stand ready to adjust all of our instruments within our mandate, incorporating flexibility if warranted, to ensure that inflation stabilises at its 2% target over the medium term. The pandemic has shown that, under stressed conditions, flexibility in the design and conduct of asset purchases has helped to counter the impaired transmission of monetary policy and made the Governing Council’s efforts to achieve its goal more effective. Within the Governing Council’s mandate, under stressed conditions, flexibility will remain an element of monetary policy whenever threats to monetary policy transmission jeopardise the attainment of price stability. In step with the communication of this process of monetary policy normalisation, market expectations of policy rate hikes have been brought forward since December. The prospect of the monetary policy stance returning to normal has likewise been reflected in an upturn in long-term interest rates in the euro area.
As in late 2011, the main effects of these tensions in emerging economies, aside from lower commodity prices, have been the depreciation of their currencies, fallen stock prices and increased risk premiums on their external bonds. Chile has not been spared, although as of the statistical closing of these Reports the effects have been limited. Compared with March, the peso/dollar parity has depreciated somewhat below 5 percent; the stock market, as measured by the selected price index IPSA in pesos, has lost over 7 percent, and the sovereign premiums of Chilean CDS have risen nearly 40 basis points. Money markets, meanwhile, have operated normally. In contrast with the developed world, in Chile domestic output and demand are still strong. In the first quarter, y-o-y GDP growth exceeded March’s forecasts. However, in quarter-to-quarter terms it lost strength with respect to late 2011 and grew according to trend. Inflation has been lower than expected, which, combined with the drop in international fuel prices, has reduced the risks for its short-term evolution. In general, medium-term inflationary risks are still latent because domestic markets remain tight. In this context, the Board has kept the monetary policy interest rate (MPR) at 5 percent since January, and has conditioned its future movements to the implications of domestic and external conditions on the inflation outlook. Chile is on a healthy position to confront further deterioration of the global scenario.

What is less represented, but in no way less relevant, is the potential for external players to suppress national autonomy. Let me elaborate. Despite great strides in global integration bringing the benefits of reduced inter-country disparities, differences still exist. As much as we can categorise economies based on common characteristics, be it by geography, or by level of development, no two countries are identical. Even if countries may seem similar, their reaction to a certain phenomenon, in all likelihood, will not be the same. This reminded me of the doctor-patient relationship, grounded by the classical “Principle of Biomedical Ethics” that emphasises respect for the patients’ autonomy. A doctor may well know all the treatment options available, and would prefer some over others, but it is ultimately the wishes of the patient that needs to be considered. The doctor, rather than vehemently working against the patient, should upon exploration of options and sharing of information, wholeheartedly respect and support the decision of the patient. Underlying this bilateral covenant is the crucial recognition of the shared humanity of doctors and patients. In a similar manner, we can all agree that as policymakers and regulators, macroeconomic and financial stability is a shared goal. We have been very grateful for the wealth of information and quality of debate that multilateral institutions bring to the table, which have immensely aided our decision-making process. However, individual countries should not be starved of policy autonomy to manage challenges.