samchain/econo-pairs-v1 huggingface dataset:
Working towards a mutually-beneficial future together is the best way to prevent history from repeating itself. 36. Japan's relations with India are less problematic. Prime Minister Koizumi's visit to India in April 2005 signalled a desire to establish a new basis for relations. But there is an undercurrent of cultural unease that needs to be transcended so as to realise the full potential of Japan-India cooperation. 37. ASEAN, as a group and individually, has much to offer Japan. ASEAN can be a strategic partner for Japan to tap into the growing economies of China and India. ASEAN can also offer Japan a competitive production base, supplies of natural resources including oil and gas, and additional markets for Japanese products. 38. Japan is already the top investor in Indonesia. Under President Susilo Bambang Yudhoyono's leadership, Indonesia has begun to develop its economy, attract investments and play an active regional role. President Yudhoyono is also pressing ahead with difficult reforms to get the country moving on the fast track. 39. Vietnam is a relatively new partner for Japan. So it should not surprise you to learn that Japan is the third largest foreign investor there, while Singapore is second. Vietnam's bid to join the WTO has catalysed FDI flows totalling $ billion in the first nine months of 2005, about double the amount in the same period in 2004. Not surprisingly, Japanese companies are increasing their presence there. Remaking Singapore 40. Singapore has been remaking itself to enhance our competitiveness and seize the opportunities in the region. 41.

How do we adjust to the new realities and seize the opportunities therein? These are the key questions before us. 5. This fourth Nomura Singapore Seminar is therefore timely. This morning, I hope to contribute to a deeper understanding of the geopolitical forces at work and highlight some of the economic opportunities available as the global landscape is being reshaped. An ascendant dragon 6. First, China. 7. I first went to China in 1971, when I was working for Neptune Orient Lines. We were exploring the possibility of chartering ships to China. China then was in the grip of the Cultural Revolution. Everybody wore drab blue or grey Mao jackets and cloth shoes. Men and women looked alike but for the length of their hair. Chairman Mao's portraits were everywhere. The air was filled with revolutionary songs praising him and the glory of communism - from morning till night, at the airport, on trains, in the hotel lobby and even in the toilets! There was no escape! There was no private enterprise either. 8. My next visit was in 1975. Deng Xiaoping and the Gang of Four were locked in a fierce ideological struggle. Deng was branded a 'capitalist roader'. While on a field trip, I asked a worker where he had learned his technical skills. He pointed to the pocket of his Mao jacket and said, "The Little Red Book". Admission to university depended not on academic performance but how 'red' a person's political thinking was. So too the job a person was assigned. 9.
This is partly because Swedish banks have not to any great extent been exposed to the US subprime market, and we have not seen any distrust of Swedish banks. Ultimately, it is a question of a broad view that Swedish banks do not have problems. Further, there is no incentive for Swedish banks to invest in the Riksbank’s standing facilities instead of on the overnight market. One reason is that our monetary policy steering system is constructed so that it would immediately be more costly for the banks, unlike systems with average minimum reserve requirements. Let me here point out that my intention is not to say whether one system is better than another; I merely wish to illustrate that the differences in monetary policy steering systems may be one reason why central banks have acted differently. Nor has there been reason to take measures, given the background of financial stability. Swedish banks are profitable and financially strong, and therefore have good opportunities to manage unexpected negative events. However, as usual we are following developments closely. If there was a risk of problems arising that would make it difficult for the banks to conduct their operations and thereby endanger the system, the situation would be different. However, this is not the case today; we are continuing to observe the financial crisis largely from the outside. 8  BIS Review 51/2008

It is in this context where the topic of this year’s conference falls right into the core business of central banks: understanding inflation dynamics, and how they influence monetary policymaking. 1  Central Bank of Chile October 2018  Indeed, throughout the post crisis period we have observed a puzzling behavior of inflation in many developed countries, as standard Phillips curve approaches have done a rather poor job predicting price pressures. During this period, the unemployment rate has reached historically low levels, but inflation has remained low. Economists have referred to a “twin puzzle” in inflation dynamics and several explanations with different policy implications have been put forward. Some have pointed to the existence of “hysteresis” as causing a drop in potential output and, consequently, smaller gaps in the economy after the crisis. Others argue that the weakening of the relationship between activity and inflation responds to structural changes, like globalization forces pulling wages down, or technological innovation prompting changes in industrial organization. Another alternative, a sort of “catch 22” for central bankers, is that the flattening of the Phillips curve may be the consequence of the success of central banks in targeting inflation. Measurement issues should not be ruled out either. Measuring a common movement of prices throughout the economy has never been a straightforward task, but this may be getting harder as standardized goods take a smaller and smaller share of household consumption compared to services and to goods that are subject to fast change.
We at the ECB stress this new principle of “optionality”: it means in a risk-management approach that we must broaden our policy space, to be able to respond to a broader spectrum of possible inflation scenarios as Philip Lane explained in a recent interview. The trick is obviously to articulate this increased optionality whilst at the same time giving sufficient predictability to economic agents to reduce the adverse effects of uncertainty. This brings me to my second 2/5  BIS central bankers' speeches  point, sharing some thoughts about the ECB guidance. II. How to provide predictability and optionality for the ECB Predictability – one course and two compasses Let me start with the predictability elements: one course – the inflation target of 2% as set out in our strategy review –; and two compasses – our sequencing and our forward guidance. About the course, our commitment is crystal clear: we will do what is necessary to bring inflation back firmly and durably to around 2% within our projection horizon. This reassurance is key to keeping inflation expectations close to 2% whatever the short-term uncertainties are. We have a duty to do it, we have the capacity to do it, and have no doubt we shall do it. To keep this course, the first compass is our sequencing: we will end net asset purchases first, then raise the key interest rates, before eventually starting to reduce the balance sheet. Uncertainty and speculation about the order in which things will happen is unnecessary and easily avoidable.

First, we could just be too optimistic about our growth and inflation forecasts. Second, we could be right about our forecasts, but the rise in short-term rates could provoke an outsized tightening of financial conditions that might cause the economy’s forward momentum to slow more than we anticipate. In either case, the economy would not be growing fast enough to put increased pressure on resources. In such circumstances, underlying inflation might not rise and inflation expectations could become unanchored to the downside. Consequently, not only might the FOMC be forced to reverse course and ease monetary policy, but the efficacy of additional stimulus measures could be attenuated by the fall in inflation expectations. Avoiding a Japan-like experience in which inflation expectations have become unanchored to the downside should be an important consideration in the conduct of monetary policy. On the other side, there are several risks of delaying the start of lift-off and normalizing more slowly. The first one is that the unemployment rate could fall to an unsustainably low level that is not consistent with our long-run price stability objectives. Monetary policy works with long and variable lags, so overheating is a risk. If overheating did occur, the FOMC might need to tighten monetary policy more aggressively in order to keep inflation from significantly overshooting its 2 percent objective. In such circumstances, the risk of a recession would probably climb significantly.
I also pay tribute to my predecessors in office in the independent Macedonia, governors Borko Stanoevski, Ljube Trpeski and Petar Goshev and to all management structures of the Bank, both current and former, largely present here tonight. I extend special thanks and recognition to all generations of employees of the National Bank, that dedicated their work life to the institution, and have contributed with maximum commitment and professionalism to the continuous growth and development of the National Bank. This order is your merit, but also a responsibility to continue delivering great results. To continue investing in constant upgrade and to protect the reputation of the institution, thus helping it to come closer to the family of the central banks of the Member States of the European Union. I am convinced that in the next period the National Bank will continue to build and develop itself, and will successfully accomplish its mandate! May we celebrate this great event for many years! 2/2  BIS central bankers' speeches

Tharman Shanmugaratnam: The Gallery – promoting Singapore’s central bank role and mission Remarks by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at the Opening of the MAS Gallery, Singapore, 16 February 2016. *  *  *  ESM Goh Chok Tong Family members of Former Chairmen, Mr Hon Sui Sen and Dr Goh Keng Swee, and of former Managing Director Mr Lim Kim San Former Managing Directors, Mr Michael Wong Pak-Shong, Mr JY Pillay and Mr Lee Ek Tieng Current Board members Members of the MAS management and staff, and especially, MAS Pioneers Thank you to everyone for coming to the opening of our MAS Gallery. The Gallery is aimed at helping the public understand the mission of the MAS, and its role in promoting both growth and stability of the Singapore economy and financial system. The Gallery aims to help the public understand •  how we keep inflation low over the long term through MAS’ policies in managing the exchange rate of the Singapore dollar,  •  how we supervise the financial sector – the banking, insurance and securities industries - to ensure confidence in our financial system,  •  how we promote the development of a vibrant financial centre that serves a good part of Asia and in some respects the rest of the world,  •  how we also seek to ensure that the financial system serves the interests of consumers, and how we try to help Singaporeans manage their finances well.
An ethical approach is needed if we are to respect the spirit of the rules – and not just the letter of the law – and if we are to make informed decisions when clear rules are not available. In addition to financial institutions' in-house ethical practices, the financial sector must now also consider how society – NGOs, the media, fellow citizens included – perceive its activities from an ethical standpoint. Clearly, the 2007–09 crisis was partly created by an imbalance : too much trust had been placed in ethics, while the rules were insufficient. The weaknesses in the corporate culture of financial institutions were thrust into the spotlight; incentives to take risks were too powerful and governance was inappropriate. 1/3  BIS central bankers' speeches  Certain Anglo-Saxon expressions perfectly illustrate the period: "too big to fail" created a widespread moral hazard, "tick the box" encouraged overly lax self-regulation through a purely formal compliance with the rules... and in so doing, the "light touch" of the British FSA at the time clearly showed its limitations. Since then, I am happy to say that we have significantly tightened up the rules. With the CRD IV Capital Requirements Directive and Basel III for banks and, at least in Europe, Solvency II for insurers, quantitative requirements have been reinforced to ensure greater resilience, governance of financial institutions has been improved and compensation policies for bankers have been reined in a little. International regulation is our common good. It strengthens a sound financial system.

  Bank research showed that highly indebted households in the UK cut consumption more sharply over 2007 to 2009 (Chart 1).11    And during the global financial crisis, countries with higher aggregate debt levels relative to incomes had deeper falls in aggregate consumption and hence deeper downturns (Chart 2). Chart 1. Change in consumption relative to income by LTI between 2007-09  (a)(b)(c)  Chart 2. Higher household indebtedness was associated with sharper falls in consumption during the crisis  Percentage point change in consumption to income ratio  Adjusted consumption growth 2007-12(a), per cent 0 -5 -10 -15 -20 United Kingdom -25  0 to 1  1 to 2  2 to 3  3 to 4  ≥4  Mortgage LTI ratio Sources: Living Costs and Food (LCF) Survey, ONS and Bank calculations. (a) Change in average non-housing consumption as a share of average posttax income (net of mortgage interest payments) among households in each mortgage LTI category between 2007 and 2009. (b) LCF survey data scaled to match National Accounts (excluding imputed rental income, income received by pension funds on behalf of households and FISIM). LTI ratio is calculated using secured debt only as a proportion of gross income. (c) Repeat cross-section methodology used, with no controls for other factors, or how households may have moved between LTI categories between 2007 and 2009.
This aimed explicitly to support lending and activity in the real economy, “the activist goal of liberalizing bank examinations to make them dynamically adjustable to current economic policies”.8 It worked. Lending and growth resumed. 8  6  Simonson and Hempel (1993). BIS central bankers’ speeches  In the period since, the first two arms of macro-economic policy – monetary and fiscal – have been used actively. The third – macro-prudential – has been tied behind policymakers’ back. The crisis of the past few years has highlighted the need to free the macro-prudential arm of policy. As in the 1930s, macro-prudential policy may have a role to play in shouldering the heavy burden of damaged balance sheets and diminished risk appetites. References Akerlof, G, and Shiller, R (2009), “Animal Spirits: How Human Psycology Drives the Economy, and Why It Matters for Global Capitalism”, Princeton University Press. Barro, R (2006), “Rare Disasters and Asset Markets in the Twentieth Century”, Quarterly Journal of Economics, 121 (2006), pp. 823–866. Cogley, T, and Sargent, T J (2008), “The Market Price of Risk and the Equity Premium: A Legacy of the Great Depression?, Journal of Monetary Economics, Volume 55, Issue 3, pp. 454–476. Graham, J R, and Narasimhan, K (2004), “Corporate Survival and Managerial Experiences During the Great Depression”, Working Paper. Haldane, A (2011), “Capital Discipline”, available at http://www.bankofengland.co.uk/publications/speeches/2011/speech484.pdf. HM Treasury (2010), “A new approach to financial regulation: judgement, focus and stability”, July, available at http://www.hm-treasury.gov.uk/d/consult_financial_regulation_condoc.pdf.

I noted particularly that the Association could play a role in three main areas: by acting as an industry representative and interlocutor with regulators; by establishing common standards and documentation; and by promoting market transparency and efficiency. I am glad to say that the Association has delivered on its promises in each of these areas. Its website is, for example, now up and running, and is an important source of information for both members and non-members. If I could put in a plea, however, it would be for more market statistics to be made available on the parts of the website that are open to non-members - or honorary members such as the HKMA. In its representational role, the Association offered very helpful comments last year on the draft guideline that the HKMA prepared on the management of the risks associated with syndicated lending. Our initial draft generated a certain amount of heat. This was I think largely due to a feeling on the part of the industry that we had overplayed the inherent risks of syndicated lending. We therefore made it clear in the final version of our guideline - which we issued in non-statutory form - that syndicated loans are not necessarily riskier than other types of lending. Indeed, the distribution of lending among participants is designed to reduce risk by sharing it.
But they also had no conviction about when, or indeed whether for sure, the music had to stop, and so feared individually that stepping away from the dance “too early” would crystallise business risk, as the dance would simply go on without them and their franchise would be undermined as customers migrated to their competitors. These seem pretty close to the circumstances that Federal Reserve Chairman William McChesney Martin had in mind, over 50 years ago, when he talked about Taking Away the Punchbowl just as the party gets going. An intervention of some kind is needed from someone outside the dance. Some commentators argue that the intervention should come via monetary policy. That as well as steering the path of nominal demand in order to maintain low medium-term inflation expectations, monetary policy should seek to tame the credit cycle. As MPC colleagues have already argued publicly, 6 we are very doubtful about that. It is likely that much higher rates would have been needed in the UK to choke off the credit boom, with the likely effect of pushing the economy into quite a prolonged recession, with a persistent and substantial undershoot of our inflation target. The business cycle and the credit cycle were simply not closely aligned. That is not to say that monetary policy should not take into account risks to the inflation outlook that accumulate slowly and with great uncertainty about when and how they will crystallise. But it makes a compelling case that monetary policy is not sufficient on its own.

Reforms to the “how” approach to the banking system oversight The Governor of the Bank said earlier this week that we face a choice between an overhaul of the regulatory regime and directly altering the structure of the banking system. As earlier policymakers would have put it, this is a choice between, on the one hand, regulating what banks and other financial firms can do and, on the other hand, leaving open the scope of what they may do but regulating and supervising how they do it. Since the thoughts on macroprudential instruments I shall go on to outline this evening are based on something like the existing structure of the banking system persisting, I shall briefly recap what I have said in a series of speeches earlier this year about the current reform agenda. 3 The three necessary planks are re-regulation and a return to supervision; for the first time, agreeing effective resolution plans with banks and any other key firms; and, I would hope, a clear Capital of Last Resort regime designed to avoid perverse incentives. 3  See “Remarks by Paul Tucker”, panel session at The FSA’s Turner Review Conference, 27 March 2009, “The Repertoire of Official Sector Interventions in the Financial System: Last Resort Lending, Market-Making, and Capital”, Tokyo, 28 May 2009, and “Regimes for Handling Bank Failures: Redrawing the Banking Social Contract”, at the British Bankers’ Association Annual International Banking Conference: Restoring Confidence – Moving Forward, 30 June 2009.
On the contrary, most empirical studies, as you know, show that there is a negative relationship between inflation and output in the long run. Inflation is a tax on financial assets; it distorts investment decisions and increases overall uncertainty. In Switzerland, monetary stability has become part of the country’s culture and has been the guideline of monetary policy for more than 30 years now. After the collapse of the Bretton Woods system in 1973, the Swiss National Bank made it clear that the overriding objective of its policy was to preserve long-term price stability. Convinced that inflation was a monetary phenomenon, it opted for a strategy aiming at a steady growth of the money stock in line with the potential growth rate of the economy. At the time, the Swiss National bank was actually one of the first central banks to adopt a rule-based strategy. Between 1975 and 1999, we implemented a “pragmatic” policy, with monetary targets serving as benchmark and communication devices. Here I would like to emphasize the term “pragmatic”, because it was never the goal of our policy to fulfil monetary targets mechanically. As a small economy with an international currency, we had to face severe exchange rate shocks or money demand instability. In such circumstances, pre-announced monetary targets could not be met. In these particular and difficult periods, however, we never gave up our objective of preserving price stability in the long term. In the late 1990s, day-to-day implementation of monetary targeting turned increasingly difficult because of financial innovations.

Most have accumulated massive international reserves, well in excess of what would be needed for precautionary reasons. All in all, this paints a very different picture as compared to past episodes of global turbulence, when these economies used to be not only “influenced” by the ups and downs of the changing risk preferences in global financial markets, but simply “driven” – even “drowned” – by them, sometimes regardless of their economic fundamentals. In my view, this separation from the main stream of the turbulence constitutes an achievement in itself. From other stand point, it is certainly striking that in this period of global financial turbulence inflation is identified as the key economic challenge for emerging economies. Indeed, the rise of inflationary pressures on food prices derived from the commodity boom, is becoming a very worrying concern. The large change in relative prices that underlies this prolonged boom is having a stronger impact on developing economies, with very negative and substantial effects on the well being of the poorest portions of their populations. Therefore, as inflation creeps up the concern of policymakers deepens, not only in the sphere of macroeconomic stability, but beyond. In connection with this, the fact that monetary policies have remained focused on inflation stability in most emerging market economies is an additional novelty to mention in the context of the present turmoil.