samchain/econo-pairs-v1 huggingface dataset:
To be sure, these efforts are not necessarily being undertaken with equal commitment and intensity in every country. Nor should they be. No country is like any other. We all recognize that countries differ in their histories, traditions and ways of doing business. This is not a question of thinking that there is only one correct model and that each country must adapt to that model. What is at issue, however, and what is desirable is that all countries grow. What the US experience has shown is that productivity gains driven by new technological advances, coupled with the flexibility to shift resources quickly into high-growth areas and the ability to apply the technology in productive ways, can help contribute significantly to this goal. The United States has no wish to be an island of growth in a sluggish global economy. The costs to the US of being strong when others are weak are very real. One has only to look at the weakness of the US current account deficit in recent years to understand why it is in the interest of the United States for the rest of the world’s economies to be strong and competitive with us. The United States cannot indefinitely be the engine of growth for the world economy - the importer of first and last resort - and sustain ever-mounting current account deficits without running the very real risk of economic and financial difficulties that could well weigh on many of the world’s economies. No one wants that.

We have also made extensive purchases of Swedish government bonds. Although it is difficult to distinguish the effects of different measures on the economy, our assessment is that the impact of monetary policy is essentially functioning as expected. The interest rates charged to households and companies on loans with short maturities have fallen more or less in line with the repo rate. Data from the financial markets also imply that the asset purchases have had the intended effect. Our intention with this expansionary monetary policy has been to increase the rate of inflation so it approaches the target of 2 per cent. As I mentioned earlier, underlying inflation has also shown an upward trend for some time now, at the same time as economic activity has strengthened and the situation on the labour market has gradually improved. But although developments are mainly heading in the right direction, there is still considerable uncertainty. Economic activity became stronger in the euro area, but several countries were still being held back by high indebtedness and as yet unresolved structural problems. The course of events in Greece also entails a tangible risk. If the situation deteriorates, unease may spread to other countries in the monetary union. Uncertainty over how the krona will develop is another risk. The relatively strong fluctuations on the foreign exchange market are making it difficult to assess how the exchange rate will continue to develop. A too strong exchange rate would risk halting the upturn in inflation that has begun.
In turn, higher real interest rates tend to depress economic activity and bring even lower inflation. This is the kind of spiral, possibly leading to deflation that monetary policy must seek to control and avoid. The process may become even more self-sustaining if it negatively affects inflation expectations. Over the last months, inflation expectations in the euro area have dropped to 1.2% at a one-year horizon and 1.5% at a two-year horizon. More worrisome, long-term expectations – up to now extremely well-anchored around 2% – have been drifting downward. Markets currently expect an inflation rate of 1.8% on average between 2019 and 2024 in the Eurozone. Monetary policy therefore must aim at influencing both nominal interest rates and inflation expectations. This is exactly what we are currently doing in the Eurosystem. Let me explain how. First, on nominal interest rates: Policy rates are now close to zero (%). Negative interest rates have been imposed on the deposit facility. Forward guidance has been used to signal that rates will stay at those levels for a very lengthy period of time. A new liquidity facility, the “targeted very long term refinancing operation (TLTRO)” has been created, with a four-year maturity and, for the first time, a guaranteed fixed rate. Basically, banks are able to get a four-year funding for a 0.15% fixed interest rate. Most recently, the ECB Governing Council has decided a program of private asset purchases, for both covered bonds and ABS.

Above data suggests that in the long run low ability to generate innovation combined with low value added FDI may harm the CEE ability to improve productivity. Summing up, with the inflation headwind expected in the coming few years CEE central banks will face a possibly steep sacrifice ratio when controlling inflation. Keeping inflation at the target consistent with EMU accession may require sizeable reduction of the output gap, which in turn may make fiscal targets difficult to achieve. Tail wind of globalization appears to be fading in the coming few years and if agflation or surge in other commodity prices materializes, joining EMU may become “mission impossible” for many CEE countries in the next few years. The window of opportunity created by global inflation “tail wind” might have closed in 2007. References Freeman R. (2005) “The Great Doubling: America in the New Global Economy”, Usery Lecture, April 8, 2005. Georgia State University; What Really Ails Europe (and America): The Doubling of the Global Workforce, The Globalist, June 3, 2005 IMF (2000) “Globalization: Threat or Opportunity?” IMF Staff, April 12, 2000 (Corrected January 2002) McKinsey Global Institute (2005) “The Emerging Global Labour Market”, June 2005. Rogoff K.S. (2006) “Impact of Globalization on Monetary Policy”, Federal Reserve Bank of Kansas City Rybinski K. (2007) “Three faces of globalisation. Offshoring – global imbalances – monetary policy”, Difin, Warsaw 2007 (in Polish) Spiegel online (2007), “Rethinking Renewables: Biofuels Emit More Greenhouse Gases than Fossil Fuels”, http://www.spiegel.de/international/europe/0,1518,508089,00.html  4  BIS Review 137/2007
John Palmer: Basel II and beyond Opening address by Mr John Palmer, Deputy Managing Director of the Monetary Authority of Singapore, at the MAS Risk Conference, Singapore, 12 July 2004. *  *  *  Introduction Good morning. Welcome to the MAS Risk Conference, and for visitors to these shores - welcome to Singapore. The Conference is held at an opportune time. It was only two weeks ago that the Basel Committee on Banking Supervision released the Basel II capital framework. This is enough time for all of you to have read the full text, and recent enough for you to remember most of what you have read. Not surprisingly, my remarks this morning will be focused on Basel II. They are drawn from my perspectives as a policy maker who actively supported the development of the Basel II framework, and as a prudential supervisor now faced with the challenge of implementing this new framework. I intend to offer a perspective on Basel II, some of the challenges that remain to be addressed and offer some thoughts on the future evolution of capital adequacy rules for banks. Later in the conference, my colleague, Low Kwok Mun, will discuss MAS’ approach to Basel II implementation, including requirements for local banks and some important home/host supervisory issues. Why Basel II? What is good about it? And what are the implementation challenges? Developing Basel II turned out to be an immense challenge. Implementing it will be no less challenging.

But with more autonomous units, an internationally-active and  BIS Review 42/2004  1  complex bank has to expend more effort to identify, measure, and control the risks arising from its diverse and far-flung activities. Traditional rules of thumb used by management and supervisors to assess risks and to ensure the adequacy of capital to buffer risks are no longer adequate. And continuing financial success depends critically on how a bank responds to the risk management challenges. In response to these challenges, the successful banks have developed enhanced tools for measuring risks. These can be grouped into two broad categories. The first category of tools are those that give a bank the ability to discriminate among risks by differentiating the riskiness of customers, and of various banking facilities and products. The second category of tools includes those that give a bank an enhanced capability to quantify risks. The end of the road for Basel I In and of itself, the enhanced capability of institutions to differentiate and measure risks has been a welcome development. But, the increasing sophistication of institutions in risk management meant that the crude system of risk weights under Basel I became less meaningful in ensuring the adequate capitalisation of large, complex banking institutions. By the mid-1990s, less than five years from the official implementation of Basel I,1 it was apparent that Basel I was becoming less relevant for some banking institutions.
Vehicular finance This uncertainty stems from changes not just in instruments and markets, but also in institutions – ie in the nature and structure of financial intermediaries. This is the age of what I call Vehicular Finance. The key intermediaries are no longer just banks, securities dealers, insurance companies, mutual funds and pension funds. They include hedge funds of course, but also Collateralised Debt Obligations, specialist Monoline Financial Guarantors, Credit Derivative Product Companies, Structured Investment Vehicles, Commercial Paper conduits, Leverage Buyout Funds – and on and on. 5 These vehicles can fit together like Russian dolls. By way of illustration – and, I fear, slipping for a moment into alphabet soup – SIVs may hold monoline-wrapped AAA-tranches of CDOs, which may  2  See chapter on “Risks in the international financial system”, in Bank of England Financial Stability Review, December 2004, p. 50. 3  See chapter on “Shocks to the UK financial system”, in Bank of England Financial Stability Report, April 2007, p. 16. 4  For example, hedging of Power Reverse Dual Currency Notes might in certain circumstances amplify movements in the yen; and hedging of Range Accrual Notes, for which the gamma exposure can flip sign, might amplify yield curve movements. The general question of the potential for dynamic hedging of short option positions to amplify market movements was discussed in Tucker P M W (2005), “Where are the risks?”, Speech at The Euromoney Global Borrowers and Investors Forum, London, June 2005, Bank of England Financial Stability Review, December 2005, pp 73-77.

12  The Global Documentation Steering Group (GDSC) is an industry group formed in 1999 to implement the documentation-related recommendations of the report of Counterparty Risk Management Policy Group (CRMPG). The primary objective of the Committee is to encourage the harmonisation of documentation in standard over-the-counter contracts in order to minimise disparities that can exacerbate market, credit and legal risk. It took the lead in updating the recommendations on documentation issues for the second CRMPG report released in 2005. GDSC is sponsored by, but independent of, the Federal Reserve Bank of New York. The hedge fund community is represented on the GDSG. The Stock Lending and Repo Committee, facilitated and chaired by the Bank of England, provides a forum for practitioners and the authorities to discuss structural (including legal) developments in London-based securities lending and repo markets. 6  BIS Review 44/2007  At the macro end of the spectrum, that above all means credible monetary regimes. The MPC is now ten years old. During that period, inflation expectations have been well anchored to our target. And no one should be in any doubt that the Committee is determined to keep it that way. But a credible monetary regime does not insulate the economy, or financial markets, against all shocks. Over the coming decade, some currently observable imbalances will plausibly work their way through the system, as the pattern of global saving shifts, asset prices adjust, and we encounter, eventually, a period of corporate defaults.
BIS central bankers’ speeches  9  Table 1  International baseline scenario assumptions 2009  2010 (e) 2011 (f) 2012 (f) 2013 (f) Sep. Dec. Sep. Dec. Sep. Dec. 2011 2011 2011 2011 2011 2011 Report Report Report Report Report Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates External prices (in $  4.6 -0.4 -0.7 -2.3 -6.2  23.8 6.1 5.0 3.9 5.8  LME copper price $ WTI oil price $ Gasoline parity price $ Libor $ (nominal, 90 days, %)  234 62 471 0.7  342 79 598 0.3  (annual change, percent) -1.8 -2.9 -5.3 -6.7 4.2 4.2 4.3 3.8 3.9 3.8 4.0 3.5 3.0 2.8 3.3 2.7 9.8 9.8 2.9 1.3 (levels) 415 401 370 350 93 95 89 100 816 804 797 784 0.3 0.3 0.3 0.3  -2.6 4.6 4.5 3.7 2.1  -3.5 4.2 4.1 3.2 2.1  350 91 774 0.3  340 96 748 0.3  (e) Estimate. (f) Forecast. Sources: Central Bank of Chile based on sample of investment banks, Consensus Forecasts, IMF, and statistics bureaus of respective countries.

As you know, OMTs, while ex-ante unlimited in time and amount, are strictly conditional upon the country implementing a programme making it eligible to financing from the European Stability Mechanism. 2  BIS central bankers’ speeches  3. By definition, “non-conventional” policies are highly innovative and central banks have made great efforts and devoted large resources to explaining their rationale and modalities. Nevertheless, there remain some misperceptions and concerns which I will briefly try to dispel and address. First, there are fears that the whole process of balance sheet expansion is inflationary. Indeed, one important effect of non-conventional policies is to significantly increase the quantity of central bank money in the economy. Since, ultimately, inflation is always and everywhere a monetary phenomenon, it may seem natural to anticipate further inflationary pressures down the road. While I understand these preoccupations, I do not see, in the current situation, any reason for concern. True, there has been a strong increase in central bank money and the situation should be monitored accordingly. What matters, however, for inflation, is the changes in broad monetary aggregates, which determine private agents’ ability to purchase goods, hence the price level. These broad aggregates have either remained unchanged or grown very slowly. What has happened, in fact, is that broad money has been substituted by central bank money as economic agents have felt the need to hold more liquid and safer assets. This expansion in central bank money has not affected inflation expectations, which have remained well-anchored.
We collaborated successfully in several areas over the years, particularly in promoting the greater use of RMB in the region. PBoC’s decision in 2013, under Dr Zhou’s leadership, to appoint the Industrial and Commercial Bank of China as Singapore’s RMB clearing bank was a significant milestone and spurred the growth of Singapore as a key RMB offshore centre. In 2016, MAS announced that RMB assets would be included as part of our Official Foreign Reserves, three years ahead of the inclusion of Chinese bonds in key global bond indices. At the personal level, I have had the pleasure and privilege to interact with Xiaochuan at many international and bilateral meetings. I have always found his views insightful. At our bi-monthly meetings of central bank governors in Basel at the Bank for International Settlements, I would sometimes ask Xiaochuan some rather inconvenient questions – about risks related to shadow banking or industrial overcapacity in China. Xiaochuan would always answer these questions, as well as those from other governors, with a disarming candour and clarity, never avoiding the hard issues. This not only helped to build trust among his counterparts in the international community but also endeared Xiaochuan to many of us as someone we could count on for insights into the complexities of the Chinese economy and financial system. Today, Dr Zhou will speak on “The Rise of Technology in Finance – Opportunities and Challenges for Central Banking”. Many of us are familiar with Dr Zhou’s views on financial and economic reforms.

As a contributor, we will share with others the climate solutions that we have developed and may be of relevance to them. Let me highlight three key themes at the Singapore Pavilion: decarbonisation technologies transition finance carbon markets  First, innovating decarbonisation technologies. The transition to net-zero will require us to transform how we live and work. It will transform how we power our homes and offices, travel, grow our food, and construct our cities. As a densely populated metropolis in the tropics, Singapore is a living lab to develop, testbed, and commercialise green solutions for urban living. Let me highlight two areas. One, decarbonising land transport. 1/3  BIS - Central bankers' speeches  In many cities, land transport accounts for a substantial portion of carbon emissions; in Singapore, it is about 15%. The solution lies in electrifying transportation. This is why, from 2030, Singapore will allow only registrations of cleaner-energy cars – namely, electric, hybrid or hydrogen fuel cell cars. Infrastructure solutions for charging electric vehicles on a massive scale will need to be developed and Singapore can be a good test bed for such solutions. Two, decarbonising power generation. Globally, while the growth in renewable energy has been spectacular, fossil fuels continue to account for more than 80% of global primary energy consumption. This is why the production, deployment and research into low-carbon hydrogen, as well as carbon capture, utilisation and storage solutions are so critical and why Singapore has focused heavily in these areas.
Governor’s Speech – Thailand Focus “Normalizing Policy to Ensure a Smooth Take-off” [clip] Dr. Sethaput Suthiwartnarueput, Governor of the Bank of Thailand Grand Hyatt Erawan Bangkok, 24 August 2022  Focus on 3 questions: (1) What do we need for a smooth take-off? (2) How do we get there? (3) What is our rationale for monetary policy normalization? What should we really be worried about? Part 1: What do we need for a smooth take-off? Our policy objective has been and continues to be trying to ensure a smooth take-off. For Thailand, this objective is different from that in industrial economies because the stages of recovery are different. Therefore, the policy response is also different. What is needed to achieve a smooth take-off? We need to keep inflation under control and ensure that the financial system continues to function well. 1. Need to keep inflation under control. a. Inflation harms purchasing power of households and hurts businesses, which in turn can put a drag on consumption and overall economic activities. b. High and persistent inflation may become entrenched if households and businesses expect inflation to remain high for long periods. A shift towards a higher and less well-anchored inflation regime must be prevented because in such a regime, high inflation expectations generate broader cost passthrough that act to keep inflation persistently high in a self-fulfilling manner. In such situations, inflation can also become more sensitive to relative price shocks including large depreciation in exchange rate and wage adjustment. 2.

The recovery should also be resilient to potential slowdown in world economic growth given that the initial pick up this year is mostly driven by domestic demand while growth momentum next year mostly reflects the continued rebound in tourists from abroad, which tend not to be sensitive to global economic activity. Bilateral inbound tourist flows in the past are relatively resilient to home economic conditions. This reflected the fact that there is a lot of pent-up demand and Thailand is a cost-effective value for money destination. 2. Balance of risk has tilted towards inflation Headline inflation is expected to peak in Q3/22 and gradually return to target range next year, but what’s concerning is that core inflation is increasing. a. Headline inflation is uncomfortably high and above the target range. It has been around 7.6% in June and July, the highest in 14 years. The rise of headline inflation has been supply-side driven and largely concentrated in food and energy-related categories. There has not been any sign of demandside pressure unlike in the US and UK. However, the risks are titled to the upside given possibilities of broader and faster cost pass-through and rising demand pressures as the economy gains strength. b. Core inflation has continued increasing for 4 consecutive months mainly due to faster cost passthrough such as from raw foods to prepared food prices. This is a sign or an indication that inflation engine might get fully started.
This uncertainty can be seen, too, in how companies are reinvesting their earnings. The trend over the past 20 years has been for companies to invest more in passive assets such as cash, than active ones such as physical capital. But this trend has been accentuated since the crisis. Table 2 looks at the ratio of liquid assets to investment by the corporate sectors in the UK, US, France and Germany. These ratios have risen sharply since the crisis, on average by around 70 percentage points. Companies are not just saving more of their earnings. They are doing so in a more liquid form than previously. As among consumers, business confidence has risen in lockstep with profits. But this good news has been banked, not invested. Despite the sunshine, many companies are still engaged in roof-repair. Growth in the UK, the US and some other countries remains solid, if unspectacular. But caution increases the chances of world growth continuing systematically to underperform, as it has since the crisis. By generating an asymmetric response to good and bad news, it may also skew growth risks to the downside, again as we have seen. While emphasizing the downside, it is important not to forget the potential for upside risks. The upside risk that has generated most attention over recent weeks has been wage growth. At a headline level, this picked up to 2.7% for regular pay growth on an annual basis in April, from a low of 0.7% as recently as the summer of last year.

Moreover, even these estimates may overstate the future path of interest rates implied by financial markets. Market interest rates are probability-weighted averages of different possible interest rate paths – they are a mean. Model estimates of the modal – or most likely – path for interest rates are lower still (Chart 3). Estimates of the modal path of interest rates are drawn from estimated models, so are no more than illustrative. Nonetheless, the modal interest rate three years ahead in the US is  1  Expected lift-off here refers to a 25 basis point increase. 2  The path of forward interest rates will also be affected by term premia. See Shafik (2015). BIS central bankers’ speeches  1  only 1.1%. In the UK it is 0.8%, little changed from current levels. According to these estimates, the glue holding interest rates to the floor looks stronger still. There is an old English aphorism, due to Walter Bagehot in the 19th century: “John Bull can stand many things, but he cannot stand 2%”. Prior to 2009, the Bank of England had been careful to avoid the wrath of Mr Bull: Bank rate had never been below 2% in its then-315 year history. For the past six years the MPC has been testing the patience of Mr Bull, with the 2% threshold consistently breached. If financial markets are to be believed, Mr Bull, Mrs Bull, and their children are set to have their patience tested further: UK rates are not expected to reach 2% until 2019.