samchain/econo-pairs-v1 huggingface dataset:
The continued international price pressure, combined with an expected appreciation in the krona mean that import price increases will remain low throughout the forecast period. The high productivity growth will also contribute to keeping down companies’ labour costs and thereby inflation (Figure 13). However, these inflation-dampening forces are thus expected to lose strength further ahead. All in all, one can say that we see a favourable and not overly dramatic development of the economy before us. Essentially we see an economy where the wheels are turning at a good pace and things are generally going well. It is natural in such an economy for monetary policy to become less expansionary to ensure the good development continues for a long period. It is difficult to say how quickly the interest rate increases should be made. The inflation forecast we publish today shows that inflation is expected to be slightly below target two years ahead. This is partly due to the fact that energy prices are expected to fall slightly and thereby hold down inflation. When the restraining effect of the energy prices abates, inflation will rise. At the same time, the economy is expected to develop strongly during the forecast period. To ensure that inflation is close to the target and to contribute to a balanced development of the real economy, we decided yesterday to raise the repo rate by 0.25 percentage points. It may in conclusion be worth emphasising that forecasts are always uncertain and that many things may occur to change this picture.

At the same time, inflation is expected to rise gradually on the assumption that the repo rate will be increased roughly in line with market expectations. •  Falling energy prices contribute to inflation being expected to be slightly below target two years ahead. However, inflation will then rise. •  Monetary policy is expansionary. To ensure an inflation rate close to the target and to contribute to balanced development of the real economy, we decided yesterday to raise the repo rate by 0.25 percentage points to 2.75 per cent. 6  BIS Review 101/2006
But this does not imply that there is some magical threshold defining “acceptable” and “unacceptable” rates of earnings growth. In the short run, the link between earnings growth and inflation is complicated by a whole host of factors, including exchange rate movements, cyclical variations in productivity and profit margins, irregular bonus payments, and one-off adjustments to tax rates and other “wedge” effects. It is true that given the UK’s historical levels of annual productivity growth of around 2% and the inflation target of 22%, it would be a cause for concern to the MPC if average earnings increased by much more – or much less – than 4.5% a year over a prolonged period without there being a corresponding change in trend productivity growth. That is not because the Committee has a view about the appropriate level of pay awards. It is not our job to second-guess what businesses should or should not pay their employees. Nor is it because we think earnings growth causes inflation – inflation is a monetary phenomenon. Rather it is because sustained earnings growth much above or below these rates may indicate that the level of utilisation in the labour market has reached a level inconsistent with the inflation target. The June meeting of the MPC drew particular attention to the rise in headline earnings growth as measured by the Average Earnings Index. But that should be viewed against a background of increasing concern about the tightness of the labour market.

As temporary support measures have expired, the fiscal stimulus has gradually petered out and, with the economy expanding faster than previously forecast, public finances have also recovered faster than expected. The accelerated pace of the economy provides an opportunity to reach a structurally adjusted fiscal balance at an earlier stage than expected. However, although the current fiscal policy framework may be relatively transparent and predictable, it does not seem to provide a sufficiently strong incentive to take advantage of unexpected fiscal windfalls in a counter-cyclical fashion. Consequently, monetary policy has been forced to carry a larger share of the burden of adjustment than would be desirable from the standpoint of an optimal policy mix. As inflation hits social groups differently, fiscal policy can be effectively used to support the most vulnerable groups in the economy. However, as the immediate impact of inflation on the fiscal balance is positive - as revenues are in practical terms price-indexed during times of high inflation - it is important that fiscal policy resist the temptation to allow increased revenues to feed into expenditures more than is necessary. From the standpoint of the monetary authorities, while providing support to vulnerable groups, the fiscal authorities could prioritise tightening the fiscal stance and take advantage of the strong economic growth to close the budget deficit. The war in Ukraine still poses significant risks to the global economy. However, as the global energy and food crisis is resolved and monetary and fiscal stimulus is withdrawn, the prospects for global disinflation improve.
22 Within cities, there is evidence from the US and Europe of diverse, multicultural cities being a spur to economic development and growth. 23 Richard Florida argues that what defines a thriving city these days is the three “t”s – talent, technology and tolerance – with the third a key enabler of the first two. 24 At the macro level, the evidence is more mixed but in general suggests a positive relationship between diversity and economic growth. The historical experience of creatively-fertile empires, cities or epochs – from ancient Greece to Medieval Florence, from Elizabethan London to postrevolutionary Paris – is suggestive. Each of these social systems was notable for its cosmopolitan culture, with a rich mix of religions, ideas and disciplines. Conversely, the cultural isolation of China for several centuries is held by some scholars to be responsible for its extended period of stifled innovation and growth. 25 More recent empirical evidence, looking across a range of countries, has added empirical support to this historical experience. Among advanced economies, measures of (genetic and birthplace) diversity have been found to support economic growth and development under the right conditions. 26 And the effects can be large: increasing the diversity of skilled immigrants by 1 percentage point raises long-run output by around 2%. 27 On this evidence, diversity of peoples has been an important ingredient behind organisations, cities and economies growing over time.

The rules and procedures of the various payments systems that settle in RTGS – CHAPS, Bacs, FPS, LINK, Cheque & Credit, and Visa Europe – are maintained by their respective private sector members, though there is close cooperation between the schemes and the Bank’s operational team. The recognised payments schemes are themselves supervised by the Financial Markets Infrastructure Directorate of the Bank. We will want to examine the Bank’s role in delivering payments and settlement services, looking closely at how the United Kingdom compares to elsewhere around the world and the international guidance on risk standards set out in the Principles for Financial Market Infrastructure. The Bank’s experience, particularly during the financial crisis, has been that having direct operational control over RTGS has paid substantial dividends in terms of the delivery of its mission, so I think it is fair to say we start with a certain bias in that regard. But the appropriate model for IT development, service governance and risk management depends quite heavily on the chosen way forward for the RTGS infrastructure. In light of the emerging results of the blueprint, the Bank’s supervisory function will review whether any changes are necessary to the supervisory model for the high value sterling payments system. A blueprint with buy-in The agenda I have set out today is an ambitious one, with important implications both for the many institutions and infrastructures that interface with the system today and for those that might do so in the future.
By adopting the new banking law in the Republic of Albania and a range of other monetary policy and banking supervision-related decisions, we have aimed at firming up the macroeconomic balances further and strengthening financial stability. At the focus of the Bank of Albania’s strategy were the good governance and better risk management, improved banking activity transparency to the customer and the strengthening of internal control. This strategy peaked with a large-scale, exceptional and contemporary programme of open and constant communication with the public. I believe that the favourable liquidity and capital situation characterizing the Albanian banking system on the eve of the financial crisis last fall helped to cope with the withdrawal of deposits during September-October 2008. However, the Bank of Albania deemed as necessary the prudent monitoring of the situation and took a number of actions, which alleviated the pressures over the banking system substantially. These actions helped to relax the liquidity situation and they were in harmony with the ECB’s operational response to the crisis. First, an ad-hoc task force was set up. Its main responsibility was and remains the daily monitoring of each individual bank. Our direct conclusion was that the analysis should consider all micro-level aspects, each and every cell of the system and indicators. Second, a number of facilities were adopted for the incessant supply of the system with the required liquidity.

These timely, coordinated and comprehensive set of measures, were ultimately aimed both at containing the adverse economic impact and at preserving monetary and financial stability, as a precondition for the future recovery of the economy. I believe we got the balance right. So far, Albania managed to avoid both a spike in unemployment and major business failures, despite the financial difficulties they faced. Furthermore, our financial system remains solid, with little volatility across financial markets, low lending rates, a stable exchange rate, and a liquid and well capitalized banking sector. Just as importantly, our stress-tests indicate the banking sector’s resilience to additional shocks. Under these premises, I believe the Albanian economy enjoys sufficient preconditions for a gradual recovery. However, challenges remain. For the remainder of my speech, I would like to briefly share with you our perspective on them. *** Ladies and Gentlemen, While most baseline economic projection scenarios remain positive, it’s clear the ongoing global recovery remains fragile. Policy challenges still present, both in the short and in the mid to long run. The first challenge is to ensure the sustainability of the ongoing recovery and to safeguard it against downside risks, such as potential second lockdown. At the Bank of Albania we believe the overall policy stance should remain accommodative over the foreseeable future. Any policy normalization should be coordinated and data-dependent. A coordinated normalization means an ideal sequencing of macroprudential policy stance first, followed by fiscal and monetary policy later.
Based on current policies, global temperatures are expected to rise by 2.7 degrees Celsius above preindustrial levels by 2100. Even according to the most optimistic estimates of emission cut pledges made at COP-26, the world is on course to heat up by 1.8 degrees Celsius. According to the IPCC, to fall back below the 1.5 degrees Celsius target, it would be necessary to remove from the atmosphere a decade or two of carbon emissions. If the current emissions trajectory continues, the world will likely experience climate 1/9  BIS central bankers' speeches  catastrophe. In his book, Hothouse Earth, Bill McGuire, emeritus professor of geophysical and climate hazards at University College London, argues that there is now no chance of the world avoiding a pervasive climate breakdown. When temperatures rise beyond 1.5 degrees Celsius within the next 10 years, we can expect a world plagued by intense summer heat, extreme drought, devastating floods, reduced crop yields and food supplies, higher incidence of vectorborne diseases, rapidly melting ice sheets, and surging sea levels. Many parts of the world will become less hospitable for human habitation. By some estimates, climate change may force more than one billion people to migrate by 2050. THE CHALLENGE OF DECARBONISATION 2020 to 2030 is the critical decade for climate action. Net zero commitments for 2050 are fine and good but a credible trajectory towards that goal will be substantially determined by 2030. While a growing number of countries and companies have set net-zero targets, very few have credible plans to meet them.

A few days prior to the monetary policy meeting we have another formal Executive Board meeting where we go through the text of the report in detail and where the report is tabled. However, the forecast can be changed as late as during the monetary policy meeting. It is not until the monetary policy meeting that the text and forecasts of the Monetary Policy Report are finally determined. The Executive Board makes interest rate decisions through a majority vote The Executive Board holds six monetary policy meetings a year. If necessary we can meet more often. The number of meetings is not stipulated by law, but is determined by us Executive Board members. We make decisions on the current level of the repo rate at the monetary policy meetings. We also agree on which interest rate path is most appropriate at the present time. The decisions are made through a majority vote, where the Chairman of the Executive board has a casting vote, and they are announced in a press release. In addition to the Executive Board members, a number of employees from the Monetary Policy Department and the Communications Secretariat take part in the meeting, as well as some advisers and legal advisers. In addition, the Chairman and Vice Chairman of the General Council regularly take part in the meetings and thus obtain a good insight into the work of the Executive Board. They both have the right to express opinions, but not to put forward proposals or take part in any decisions.
More generally, we - like other central banks - carry out macro-prudential surveillance. The main vehicle for reporting externally on the Bank's work in this area is the Financial Stability Review (FSR), which is published twice a year. The purpose of the FSR is to survey potential risks to financial stability, to analyse ways of responding to these risks, and to encourage an informed debate. This type of forward-looking analysis is absolutely key to avoiding the systemic risks of the future. I hope that many of you have had the opportunity in the past to read it. Achieving financial stability in the UK not only helps maintain prosperity, it also makes it an attractive place to do business. Earlier this month, the Bank for International Settlements released the results of its 2001 survey of global turnover in foreign exchange and over-the-counter (OTC) derivatives markets. And, yet again, the UK has done extremely well. Firms operating in the UK took over 31% of the foreign exchange market, and over 36% of OTC business - roughly twice the size of the next largest country, the US. Turnover in the global foreign exchange market has shrunk somewhat in recent years, reflecting in part the introduction of the euro. But there have also been important improvements in market efficiency, with for example the increased use of electronic broking. That is reflected in the sharp rise in underlying customer business with firms like yours, which is a welcome development. Conclusion Ladies and gentlemen, let me conclude at this point.

And unemployment is close to its lowest level for a quarter of a century. In my opinion, that has not happened by chance, but is the result of a range of policies. Achieving low and stable inflation is the best contribution that monetary policy can make to the wider economic goals of sustainable growth and employment. Having an inflation target certainly does not mean that we take no interest in real  BIS Review 87/2001  1  activity. We have discretion over how rapidly we try to bring inflation back to target when and if it diverges from 2½%. And we regularly publish our best guess about the likely future path of growth up to a two year horizon. But the aim of policy is clear - we do what is necessary to keep inflation on target. So far, I have spoken as if monetary policy is carried out by faceless bureaucrats hidden deep within the vaults of Threadneedle Street. Of course, as any of you who read the Diary columns regularly will know, nothing could be further from the truth! There are nine of us on the Bank's Monetary Policy Committee, and we meet once a month to make our interest rate decision. This is a rigorous process, and rightly so. The first stage occurs on the Friday before the policy meeting, with a briefing by Bank staff on all of the data that have been released over the previous month.
As a result, Romania is now fulfilling three out of the four Maastricht criteria, namely the sustainability of the fiscal position, convergence of long-term interest rates and exchange rate stability (although we are not technically in ERM II). Meeting the price stability criterion is probably just a matter of months, until the recent low inflation numbers feed into the 12-month average rate used as a reference. This is especially relevant now in the context of the recent political consensus that Romania should aim at adopting the euro by 2019. However, the recent economic European developments have taught us that only the fulfilment of nominal convergence criteria is not enough. The key is to pull this off consistently. Setting a target date for euro adoption should act as a catalyst for sound BIS central bankers’ speeches  1  economic policies. Romania has a five year period in which to check whether the abovementioned achievements are here to stay and to demonstrate significant progress in real convergence area, where we still have a lot of catching-up to do. Another lesson of the recent crisis is that a Monetary Union cannot function properly in the absence of a fiscal counterpart. In today’s Europe, it is hardly imaginable that a consensus on the latter is rapidly achievable. The closest substitute – which is supposed to break the vicious circle between sovereigns and banks – is the Banking Union.

Jean-Pierre Roth: Impact of the global crisis on Switzerland Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Schweizerisch-Deutscher Wirtschaftsclub, Frankfurt am Main, 2 March 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  What started as a financial crisis has now become a global economic crisis. Although the Swiss economy was in a very sound state before the crisis set in, Switzerland’s standing as a financial centre, its real economy and its public finances have all been strongly affected by the global turmoil. Recovery will depend largely on the development of the US economy. Despite having reached worldwide proportions by now, the crisis was not triggered by globalisation itself. Rather, it is the result of a lack of discipline in the industrialised nations. Monetary policy today must contribute to the stabilisation of the financial system and the real economy without losing sight of its principal task, which is to maintain price stability. BIS Review 24/2009  1
In this sense, it reduces the impact of risk materialization on the banking sector and, therefore, on financial stability, avoiding restricting essential services, such as the supply of credit, and protecting the overall economy. The Countercyclical Capital Requirement should be activated or increased before an episode of financial stress materializes, i.e., during periods in which it is assessed that vulnerabilities are incubating in the banking sector that generate systemic impact. This also prevents and mitigates abrupt reductions in credit in the future, thus mitigating the potential amplification of shocks to the rest of the economy. The activation of the Countercyclical Capital Requirement depends on an overall assessment of the outlook for financial stability and not on a specific indicator. All in all, it is a macroprudential instrument that must consider its impact on the financial system, recognizing differentiated spaces for other micro prudential actions and measures. The standardized background set defined by the Central Bank to decide the activation of the Countercyclical Capital Requirement is divided into four steps that feed into each other. First, the regulatory context which is a summary of new regulation or international standards that need to be taken into consideration in the setting of the CCyB. Second, an exhaustive analysis of the current stage of the credit and its drivers. Third, a heatmap reviewing multiple variables that includes indicators for vulnerabilities, risks, and financial and macroeconomic conditions.

As the member responsible for monetary policy preparations, I am in a position to influence discussions and decisions, apart from those at Board meetings, mainly as chairman of the internal monetary policy group that is made up of leading members of the Bank’s competent departments. Matters on the monetary policy agenda are discussed by this group on a continuous basis. In the light of that discussion, at Board meetings I also present proposals about the direction of policy. However, all the members of the group attend Board meetings and are able to present their own views. The arrangements we have chosen for internal discussions and preparations build on experiences at other central banks. A proposal for the approach we have used since autumn 1999 was drafted by some of us after talks with colleagues at the Bank of England, the Bundesbank and the Federal Reserve. There are some important differences, however. The officials who prepare the Board’s material are in a stronger position compared with other central banks. We ask them to produce a comprehensive assessment of inflation independently, whereas in the Bank of England, for instance, the counterpart to our Executive Board is involved in this work. And at neither the Bank of England nor the ECB are staff present at policy meetings. In other central banks, moreover, before the preparatory material is presented to the counterpart to our Executive Board, it has to be approved by the competent board member. So in all these respects our internal process is very open.