samchain/econo-pairs-v1 huggingface dataset:
The above reasoning is of a highly principle nature and it would require further analysis and better models before anything more concrete can be said regarding the manner in which monetary policy should be formulated when financial imbalances are present. However, I am prepared to make a few observations on the subject. To start with, there are probably many asset bubbles that monetary policy should not directly attempt to counteract, particularly those not associated with strong credit growth. Furthermore, Swedish monetary policy can hardly prevent stock market bubbles as these are primarily affected by international factors, in particular international stock market developments. If, on the other hand, credit growth were to develop in an unsustainable manner at the same time as housing prices were increasing rapidly, in my opinion, it would be reasonable for monetary policy to take this into consideration, even if short-term inflation may be low. Such considerations characterised the formulation of monetary policy during the years 2005– 2007, when the development of housing prices and loans to households restrained the Riksbank from cutting the repo rate as much as would have been the case if monetary policy had only been guided by inflationary assessments for the next two years. It is, of course, difficult to determine which role this played in counteracting the development of the housing market. At any rate, prices undeniably rose rapidly.

Lars Nyberg: In the wake of the financial crisis Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at the HQ Bank, Stockholm, 18 November 2009. *  *  *  I would like to start by expressing my gratitude for having been invited to discuss a few of my thoughts about what may follow in the wake of the financial crisis. Make no mistake, the crisis is not behind us yet. Many balance sheets in many countries must be adjusted before the world’s banking system can be given a clean bill of health. But the acute phase is hopefully over, giving us reason to reflect not just over why developments took the turn that they did – many others have already written volumes about this – but also over what should be done to prevent these mistakes from being repeated. Much of this discussion deals with regulation and supervision and, just like after every crisis, many political initiatives are being proposed, some better than others. This is what I intend to talk about today. But there is also reason to reflect over the interplay between financial stability and monetary policy. The current crisis has indisputably demonstrated that monetary policy and financial stability overlap in many important ways that we in the central banks previously may not have entirely considered. I intend to devote the main part of my speech to this issue.
Henrique Meirelles: Good governance in the Brazilian financial system Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at a seminar organized by the International institute of Studies of State Law (IIEDE – Instituto Internacional de Estudos de Direito do Estado), Sao Paulo, 5 September 2008. *  *  *  1. It is my pleasure to take part of this event dealing with an important and often overlooked topic: corporate governance in the Brazilian financial system. This is an especially dear issue for the Central Bank and particularly for me. 2. To start, I would like to mention that monetary stability is a precondition for good corporate governance. In the inflationary environment Brazil experienced for decades, the requisites for good governance vanished under the prevailing unpredictability and monetary confusion. There is no room for a transparent, disciplined and fair relationship among parties involved in a firm when predictability and stability are absent. In this sense, the main contribution of the Central Bank to corporate governance is to reaffirm its permanent commitment to inflation targeting in the conduction of monetary policy. 3. The Brazilian Institute of Corporate Governance defines governance as “the system by which corporations are managed and monitored, involving relationships between shareholders, board, management, independent auditors and statutory audit committee”. Good practices of corporate governance focus on increasing the company’s value, facilitating its access to capital and contributing towards its stability and soundness.

But I don’t think that one can realistically argue that we should consciously put the economy as a whole at risk of excess demand pressure and accelerating inflation in order to try to bring about a weakening of sterling against the euro. Yet that in substance is what the witnesses for the prosecution would be asking us to do. Now, even if you accept my case that macroeconomic stability, in the terms in which I’ve described it, is the right objective, there is nevertheless a more technical - but still serious - charge to answer. Some of those who agree in principle nevertheless argue that we are simply exaggerating the macroeconomic risks. The charge in this case is that we don’t in fact need interest rates at their present level, certainly not at any higher level, to maintain macroeconomic stability. That would be a technical judgement on which even the best informed experts might legitimately disagree: in fact as you may have noticed even the members of the Monetary Policy Committee themselves disagree, more often than not, at the margin. Now is not the moment for me to launch into that technical debate - just a day before our monthly policymaking meeting. In fact, strictly speaking according to our MPC “purdah” rules I ought not to be here at all. But you can find a detailed description of the technical debate, in the minutes of our policy meetings and in the Quarterly Inflation Report, either in our printed publications or on the Bank’s website.
In this respect, I must stress that the Basle Committee, as illustrated by the new Capital Accord, is encouraging banks to use more sophisticated and accurate risk measurements techniques. In addition, supervisors might help –and obviously they are already helping- to spread the idea that financial institutions should round out their current range of risk management tools to include extensive use of stress testing. This technique offers a better reflection of the varying situations of institutions and of the diverse perceptions that institutions have of exceptional events. The application of stress testing techniques and their results are thus inherently more diversified than those resulting from methods based on the value-at-risk approach. These are only examples of options to help improve the functioning of markets. There is probably some merit in an overall review of regulatory, accounting and tax rules and regulations, as well as of codes of good conduct and good practices, and of structural developments of market themselves, to identify possible amendments and improvements that could help protect and enhance the behavioural and conceptual diversity of modern financial markets. In conclusion, let me stress the important role played by central banks in preserving monetary and financial stability in an increasingly globalised world. The recent years have shown the benefits of monetary stability in terms of growth in a globalised world. It is of course closely linked to central bank’s independence, which is no longer a matter of debate.

All empirical studies confirm that much can be gained by embracing good governance and it is an essential component of crisis prevention efforts. Good governance is equally vital in both the public sector and the corporate world, and its merits are relevant in all countries. Recently, corporate governance issues have been prominent on the world economic agenda as financial markets have been recovering from scandals that came to the fore following a period of excesses in equity markets. In order to increase confidence in the markets, it is imperative that the corporate world adhere to the principles of good governance. Good governance in the public sector is also an essential tool for strengthening institutional capacity, which is fundamental  BIS Review 42/2003  1  for economic and social development. The Fund has an important role to play in this field and we welcome the increased emphasis it has given to the issue of governance. Transparency and International Standards With the world economy having suffered a confidence crisis, it is important to continue to promote greater transparency and accountability. Various studies have demonstrated that transparency and adherence to international standards lead to easier market access and lower borrowing costs. There is much to gain by applying these simple principles. It is also important to continue developing international standards and codes that enhance transparency and facilitate comparison between countries and regions.
Globalisation, with increased trade and mobility between different countries, has been one reason why we have had favourable economic development, including low and stable interest rates and low inflation.2 If conflicts in the world were to result in globalisation slowing down, this would probably have negative consequences for both Sweden and the global economy. If trade decreases and the mobility of labour and capital deteriorates, the conditions for economic growth will also deteriorate. Greater protectionism means slower development in, for example, information and communication technology, a sector that has been a strong driving force behind the pressure for change and productivity improvements in various parts of the economy. Several of the factors that have dampened price pressures in recent decades thus risk becoming less important in the future. Risks increasing in the financial system Despite the global financial crisis 2007-2010 and the pandemic 2020-2022, GDP has grown significantly in recent decades. Higher incomes and wealth have also led to the financial sector becoming a larger and more important part of the economy. Furthermore, rapid technological developments combined with globalisation have paved the way for new players and services within the framework of what is commonly referred to as FinTech. While this is essentially positive, it has also exposed the financial system to new risks, while many more traditional risks remain. The bank collapses in the United States and Switzerland are concrete examples of this.

20 [30]  However, the interdependence between monetary and fiscal policy is not reflected in the monetary and fiscal policy frameworks. The frameworks are designed so that the two policy areas function independently of each other. The Riksbank has a high degree of autonomy and a mandate that prioritises price stability. The budgetary policy objective of fiscal policy is to ensure that fiscal policy is stable over time, which in practice means that government debt should be sustainable in the long term. This approach is based on the view that fiscal policy has little impact on inflation; that monetary policy has negligible fiscal consequences; and that a fiscal policy mandate that stabilises government debt and budget deficits is sufficient to support the central bank's inflation target.38 Central banks' difficulties in bringing inflation up to target without relatively drastic measures after the financial crisis may indicate that this view has been too simple. A fiscal policy that is expansionary when inflation is too low and contractionary when it is too high makes it easier to achieve the inflation target.39 It may of course be politically easier to conduct an expansionary fiscal policy, but it is important that it is symmetrical so that the national debt does not risk becoming too large.
This is why the developments we are seeing today are receiving so much attention. Many of these issues were discussed before and after the crisis in the 1930s. Then, as now, emphasis was put on the importance of price stability, and monetary policy had therefore a prominent role in economic policy. For this reason, it can be interesting to look back at how economists in those days viewed the role of monetary policy. However, due to the mass unemployment that resulted from the depression in countries such as the United States at the beginning of the 1930s, the theory published in 1936 by Keynes in his work “The General Theory of Employment, Interest and Money” came to dominate thinking in the area right up to the 1980s. The crisis had been preceded by steep rises in asset prices and a sharp expansion in credit, but without any increase in inflation. Those economists that had advocated a long-term focus on price stability and had a clearly non-activist view of the ability of policy to reduce fluctuations in the economy were considered by many to share the blame for the fact that the depression in the United States was so severe and protracted. In simplified terms, we can say that the dominant view among economists in the Western world at the beginning of the 1900s was that economic policy should be aimed fully at holding prices stable in the long term.

Caleb M Fundanga: The Bank of Zambia and the insurance industry Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the end of year cocktail party for the Zambia State Insurance Corporation Limited clients, Lusaka, 1 December 2004. *  *  *  The Master of Ceremony The Registrar - Pensions and Insurance Authority The Board Chairman-Zambia State Insurance Corporation The Board Chairman-Zambia State Insurance Pension Trust Fund Madam Managing Director - Ms Muyenga Distinguished Invited Guests Ladies and Gentlemen Good Evening! I wish to thank the Managing Director of Zambia State Insurance Corporation Limited - Ms Muyenga, for inviting me and my wife to be the Guest of Honour at this end of year cocktail party. Despite the fact that the Bank of Zambia is not directly associated with the insurance industry, this function gives me a rare opportunity to say something about the relationship between the Bank of Zambia and the insurance industry. In the past few years, the Bank of Zambia has taken keen interest in the operations and performance of the insurance companies and pension funds. This is because insurance companies and pension funds have a direct impact on macro-economic variables, since most of them are leading players in the Government securities market. Whenever the Government wishes to raise funds, it is these institutions together with commercial banks that provide them.
In the long run, however, inflation cannot be explained solely as a function of nominal exchange rate movements, as it reflects, on the one hand, rises in wages and prices in excess of those in other countries and, on the other, changes in the real exchange rate, which stem from developments in underlying economic conditions such as terms of trade. Inflation that remains above target levels for a protracted period can only be explained by weaknesses in economic structure and policy, particularly monetary policy. In the short run, however, under- or overshooting of the nominal exchange rate can cause swings in the inflation rate, particularly if inflation expectations are poorly anchored to the target and exchange rate movements are significant. In trade-weighted terms, the króna has fallen by 5.8% year-to-date and just over 7½% since November, when it last peaked. The depreciation seems to stem from several causes. It appears that net foreign currency inflows from trade in goods and services have been at a low ebb in recent months. While seasonal factors are at play here, it could also be that foreign currency subject to repatriation requirements is not being returned to Iceland in full. This situation is being investigated by the Bank’s Capital Controls Surveillance Unit. In addition, firms and municipalities have been paying down foreign debt. In many instances, they are forced to do so, as they have no access to refinancing from abroad and would otherwise default on these loans.

Honoured guests: I have spent considerable time on economic developments and prospects, monetary policy, and the capital controls, as these are the topics of most importance to the Central Bank at present. But as the Minister of Economic Affairs said in his speech today, we are faced with formulating long-term policy concerning our currency, our monetary policy framework, our financial system structure, and the substance and institutional framework for our financial stability policy. Other opportunities to discuss the substance of these matters will present themselves in coming months. I would like to mention two points in the context, however. The first is that we must carry out these tasks very carefully and make good use of the time that we have. Some issues are more urgent than others, but in some areas the discourse is far from being fully developed, and the topics are in a state of flux in the international arena. This applies, for example, to the subject of how and to what extent separation is achieved between the financial system infrastructure and support systems that the Government will always try to keep functioning – such as payment intermediation and general depositors’ access to their bank accounts – and leveraged speculation on the part of the banks’ owners and customers. It also applies, but to a smaller degree, to the structure for monitoring and responses to risk in the financial system as a whole.
Inflation risks Let me start by looking at some of the factors that create risks for the inflation outlook and explain why I’m nevertheless fairly optimistic that inflation will moderate over the next few years. Of course, oil prices do pose an inflation risk. The price of oil has just about doubled over the past two years, from the low $ range to around $ per barrel recently. Higher oil prices are reflected in higher “headline” inflation. And they have been passed through to some extent to core inflation as well, but, unless they rise further, the effect on core inflation should begin to dissipate next year. Another risk relates to labor compensation, which is the single largest component of business costs. Recently, one measure of compensation per hour jumped abruptly. Here, too, though, I am not terribly worried because a good part of the jump is probably accounted for by one-time events, such as bonus payments and the exercising of stock options. This interpretation is supported by readings from an alternative measure of labor compensation, the Employment Cost Index, which excludes these items and has recorded only modest increases. I’m also quite encouraged by several developments that portend a moderation in inflation going forward. For example, even with the recent revaluation of the Chinese renminbi, the dollar has increased by 7½ percent against major currencies so far this year, which should take some of the pressure off of import prices.

Finally, while business investment in equipment and software rose strongly last year, by almost 14 percent, the level of investment is still not as high relative to GDP as we’d expect, given favorable economic conditions and firms’ healthy balance sheets. Economic growth has been solid for a few years now. And, with the very low level of interest rates, borrowing costs can’t be the problem. Moreover, profit margins have been high for some time, so firms are certainly not strapped for cash. The shortfall might be due to business caution, perhaps related to reverberations from 9/11 and subsequent terrorist threats and actions or perhaps to the corporate governance scandals and the adjustments required by the legislation that followed them. Alternatively, the investment shortfall might reflect the perception by businesses that productivity gains can be realized at this stage that do not require major new investments in equipment and software. Whatever the explanation, the consequence of these drags is that the Fed had to keep interest rates exceptionally low for a long time just to get respectable, but not stellar, economic growth. In fact, the federal funds rate was lowered all the way to 1 percent and held there until the middle of last year. Since then, the FOMC has raised the funds rate nine times to 3¼ percent, but it still remains in a range normally considered stimulative. Bond rate conundrum Increases in the federal funds rate typically lead to increases in longer-term interest rates.
•  Beside the geographical advantage, the Thai baht has gained wider acceptance in trading transactions with our neighbors. The use of local currency in regional trade has lowered financial transactions costs for businesses, especially in the current period of foreign exchange volatility. In this connection, the Bank of Thailand has relaxed capital account regulations to further support the use of local currency in the GMS region. •  To support regional connectivity, Thailand also offers Treasury Centers and International Headquarters as platforms for businesses to improve efficiency in financial and resource management. Some Japanese multinational firms have already been granted licenses and I am glad to learn that many more have expressed interests for setting up a Treasury Center as well as an International Headquarter in Thailand. On the financial side, Japan and Thailand have continued to strengthen our financial linkages. In Thailand, there are currently a total of 26 Japanese banks’ representative offices, 2 full branches, one locally incorporated bank and one subsidiary, which was just recently inaugurated. Japanese non-bank financial institutions providing personal loans, nano-financing and insurance services also maintain a strong presence in our Thai market. 4  BIS central bankers’ speeches  Looking around in the region, we are proud to be the country with the most active and most comprehensive Japanese financial service providers. Indeed, Japanese financial institutions have taken the lead to use Thailand as a strategic foothold for spreading their wings in the region.

01.07.2022  Closing ceremony of the academic year 2021-2022 Centro de Estudios Monetarios y Financieros (CEMFI) Pablo Hernández de Cos Governor  Good afternoon Rector and colleagues. And good afternoon class of 2022. It is a pleasure for me to participate in this graduation ceremony together with Carlos Andradas, Rector of the Universidad Internacional Menéndez Pelayo, and Rafael Repullo, Director of the CEMFI. I would especially like to thank Carlos Andradas for being here today. As you know the main activity of the Universidad Internacional Menéndez Pelayo takes place in the summer in the delightful, charming and vibrant city of Santander (you can take this description at face value, with no need to apply a haircut due to my own origins in the region). So I greatly appreciate his coming to Madrid to participate in this graduation ceremony. The partnership of the CEMFI with the Universidad Internacional Menéndez Pelayo, dating back to 2006, has been instrumental in improving our ability to attract first-rate students and the quality of our graduate programme, and I am very grateful for this. Our society needs this constant drive for excellence, especially in the present circumstances. These are difficult times. Following the COVID-19 pandemic and its economic consequences, the Russian invasion of Ukraine last February has provided a further negative shock, heightening uncertainty and worsening inflationary pressures and growth prospects. This is a particularly challenging environment for economic policy.