samchain/econo-pairs-v1 huggingface dataset:
That can be influenced by the whole raft of Government policies, ranging from education and health to taxation and social security, and it depends ultimately on the ingenuity, the productivity, and the flexibility, of the economy. Employers and employees, working together, clearly have a crucial role to play in this context, and I recognise the constructive and forward-looking role that many of you are now playing to improve the supply-side capacity of the economy. Monetary policy operates on the demand side. And the best help that we can give is to keep overall demand consistently in line with that supply-side capacity - not letting it run above capacity but not letting it fall below capacity either - as reflected in consistently low inflation. That way we can moderate rather than aggravate the unavoidable ups and downs of the business cycle, enabling steadier growth, high levels of employment and rising living standards to be sustained into the medium and longer-term. And if we can do that, then we will contribute indirectly to the supply side by creating an environment which encourages more rational, longer-term, decision-making throughout the economy. I would hope, Chairman, that on this basis we could all agree at least on what it is we are trying to do. The debate is not about the ends it is about the means. We are every bit as concerned with growth and employment as you are - as anyone in their right mind must be.

Mr. George discusses monetary policy, unemployment and economic growth in the United Kingdom Speech by the Governor of the Bank of England, Mr. E.A.J. George, at The TUC Congress in Blackpool on 15/9/98. Thank you, Chairman. I’m actually very pleased to be here, and to have this opportunity to respond directly to some of the serious concerns that have been expressed recently by Trade Union leaders - among others - about monetary policy. Let me start with what is perhaps your biggest concern. You think that the Monetary Policy Committee, which I chair and which sets interest rates, is only interested in controlling inflation and takes little or no account of the effects of its decisions on real economic activity and jobs. Some of you evidently think that’s because we’re a crowd of “pointy-heads” or “inflation nutters”, or even “manufacturing hooligans” - and I’m not sure these descriptions are intended as terms of endearment. More seriously some of you think that the problem lies with our remit from the Government which is first, to maintain price stability - defined as an underlying inflation rate of 2½%, and, subject to that, to support the economic policy of the Government, including its objectives for growth and employment. Whatever the reason, your concern is that we place too much emphasis on holding prices down and not enough on keeping growth and employment up.
The scenario also poses a number of risks to banks’ market share, to the liquidity of retail deposits, to fees from payment services and to the ability to retain and access customers and to the use of their current data advantage to cross sell products. If firms are depending more on technology like the cloud and third party providers, this environment could also pose cyber and operational risks. The impacts are not of course all one-way. There is an upside for existing banks. New technology and customer relationships gives them the opportunity to provide customers with new and better products and services, to compete and, crucially, to become more efficient. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  In their responses, the banks in the test judged they could maintain existing business models without increasing overall risk taking, meeting the requirements of both regulators and investors, and using technology to increase efficiency to offset lower margins. Our assessment was that there were a number of risks to the banks’ projections in the exploratory scenario. In particular, Open Banking, PSD2 and other related changes might cause greater and faster disruption to business models and the forecast increases in efficiency may be more difficult to deliver than assumed. Investors might also demand a higher return than banks’ forecast in the exercise. The Bank of England’s 2017 Exploratory Scenario was not a pass or fail stress test.

With the agreement of the region’s regulatory authorities, this can be achieved through the formation of a regional dealers’ network for the primary and secondary market. Such regional dealers will help to distribute securities around the region and more importantly create the market to facilitate cross-border transactions. In doing so, it creates liquidity in the fixed income market, attracting greater foreign investors’ participation and lowers the cost of funding. ASEAN corporates are thus able to tap into new markets and investors and widen their sources of financing. This contributes to greater depth and breadth of the regional fixed income market. Secondly, as intra-regional trade within ASEAN is becoming more significant with further potential in intra-regional investments, another untapped area is the cross currency foreign exchange market, that could support regional settlement for trade and investment. ASEAN is well positioned to advocate the greater use of regional currencies that will further enhance and deepen regional financial integration via use of regional currencies for trade settlement. The cost of hedging the exchange rate risk will be lower thus it promotes efficiency in trade BIS central bankers’ speeches  3  and enhances export competitiveness of our businesses. We should therefore, work together and double our effort to promote and enhance the use of regional currencies for trade and investment settlement. Sovereign funds managers could also give a timely boost to this effort by investing a fraction of their funds into domestic currencies of regional bond markets.
Private sector’s consumption expenditures rose by 36.4 percent in real terms in the period from 2001 to third quarter of 2006, while public expenditures rose by 15.5 percent with the acceleration especially in the last two quarters. Looking at the investment side, we see that the private sector’s investment spending increased by 134.3 percent in real terms while the public investment spending went up by 14.1 percent. The high increases observed in investment spending also indicate that the investment-oriented basis of growth is widening and so the production capacity is increasing. Another resource for growth is the high increase in efficiency. Accumulated efficiency increased by 39.3 percent in the last five years. The high efficiency rates support the growth process without inflation on the one hand and they contribute to the sustainability of growth on the other. The exports have had great contributions in growth in recent years and this contribution keeps growing gradually. The Turkish economy is opening its doors. Accumulated annual exports rose by 167.5 percent as of November 2006 compared to the year 2001. The total trade volume in the last year reached 220.8 billion USD and it constitutes 57 percent of the national income. BIS Review 28/2007  5  Dear Guests, The new structure of the growing process in our country is an indicator of the significance of macroeconomic stability, which lies on the basis of price stability for growth and competition.

The rising expenditures, especially the investment spending increase the demand for machinery and equipment; and this demand can be met by imports due to the structural peculiarities of the Turkish economy. This process leads to the enlargement of the difference between the domestic savings and investments, which is an indicator of the current account deficit and causes the need for foreign resources to arise. With the help of the macroeconomic stability and the inflow of foreign capital, Turkish currency is appreciated and the process is reiterated giving way to an increase in the current account deficit in the environments where this resource can be provided and foreign borrowing becomes an option. A similar process was experienced due to the improvements recorded in the macroeconomic stability in the last five years and remarkable increases were observed in the current account deficit owing to the effect of high speed of growth. The current account deficit reached 34.4 billion USD in October per annum and the ratio of the current account deficit to national income in the third quarter of 2006 became 8.5 percent. However, the reasons besides the financing method should be examined in order to determine the extent of the risk that the current account deficit poses with regard to the macroeconomic balances. Current account deficit today basically originates from the faster increase of investments in comparison with the savings. Additionally, high increases observed in energy prices and especially crude oil prices influenced the increase in current account deficit in a vast amount.
Thus, i)  The maximum amount to be purchased in daily foreign exchange buying auctions has been set as USD 45 million for 2007, with USD 15 million for auction amount and USD 30 million for optional selling amount,  ii)  Then, the auction amount has been raised to USD 40 million as of 25 July 2007 with an assumption that the capital inflow to Turkey will follow a strong trend due to the end of the election process and positive expectations for macroeconomic policies,  iii)  However, the auction amount has been lowered to USD 15 million as of 15 August 2007 due to the fact that the unfavorable developments in housing and credit markets in developing countries increased the volatilities in the Turkish markets as well as in other developing markets in the said period. iv)  The measures taken by central banks in order to alleviate the problems in housing and credit markets have relatively reduced the volatilities in these markets and increased the global risk appetite. Therefore, the maximum amount to be purchased in auctions has been set as USD 90 million with USD 30 million for auction amount and USD 60 million for optional selling amount from 9 October 2007 onwards. As of 14 December 2007, the total amount of foreign exchange purchased via auctions in 2007 is USD 9.5 billion and there has not been any direct intervention in the foreign exchange market.

However, as was the case before, the developments related to foreign exchange supply will be closely monitored and in the event of unforeseen extraordinary developments, the Central Bank may, with prior notice, change the daily auction amount and/or optional selling amount in both directions and may suspend the auctions temporarily for shorter and longer periods. On the other hand, the Central Bank will continue to closely monitor the volatility in exchange rates also in 2008 and will directly intervene in the market in the event of actual and potential excessive volatilities. Banks will also be able to borrow foreign exchange in terms of USD and euro from the Central Bank within the predetermined limits with a one-week maturity in the Foreign Exchange and Banknotes Market-Foreign Exchange Deposit Market in the upcoming period. Moreover, the purchase/sale transactions of “foreign exchange against foreign exchange”, “foreign exchange against foreign banknotes” and “foreign banknotes against foreign banknotes” conducted between the Central Bank and institutions authorized to operate in the Foreign Exchange and Banknotes Markets will continue. In conclusion, within the framework of the current exchange rate regime and the exchange rate policy of the Central Bank, economic agents should take into account that they operate in an environment of exchange rate risk and that they should establish mechanisms that will ensure the efficient management of this risk. Liquidity management As an outcome of the Central Bank’s foreign exchange purchases, the excess liquidity in the market continued in 2007, as well.
But the heavy fall of just over six per cent that occurred between the third quarter of 2008 and the first quarter of 2009 was abnormally large. This was probably partially due to a decrease of the degree of utilisation of capital and labour. According to Figure 8, actual GDP and potential GDP were largely the same in 1995 and 2005. As the estimate of potential GDP was not seriously affected by terminal point problems or deep recessions in these years, it probably provides a reasonable view of potential GDP. This is also supported by data on economic activity that shows that resource utilisation was largely normal in these years. The average rate of growth in GDP between 1995 and 2005  11  See, for example Orphanides, A. (2010), “Monetary Policy Lessons from the Crisis”, Central Bank of Cyprus. 12  Experiences of earlier financial crises are described in detail in Reinhart, C.M. and Rogoff, K.S., “This time is different: eight centuries of financial folly”, Princeton University Press, 2009. BIS central bankers’ speeches  5  was 3.1 per cent per year. Consequently, this is also the average rate of growth of potential GDP during this period. According to Figure 8, actual GDP and potential GDP were also roughly the same in 2011. Between 2005 and 2011, both GDP and potential GDP have thus increased by an average of 2.0 per cent per year.

Another measure of this type is the employment rate from the labour force surveys (AKU), which shows the proportion of the population of working age that is in employment. Figure 12 shows that the employment rate this year is close to the average for the years 2000–2008. 13  The assumed long-term GDP growth in Figure 7 after the end of the forecast period in 2013 is 2.3 per cent per year. 14  Reinhart, C. M. and Reinhart, V. R. (2010), “After the Fall”, National Bureau of Economic Research Working Paper 16334. 15  Svante Öberg, “Potential GDP, resource utilisation and monetary policy”, 7 October 2010. 6  BIS central bankers’ speeches  The Riksbank’s indicator of resource utilisation (the RU indicator) summarises about thirty such economic variables regarding levels.16 The RU indicator includes survey data from the National Institute of Economic Research’s Economic Tendency Survey for private services, the retail trade and the construction and manufacturing industries. In addition, capacity utilisation in the manufacturing sector from Statistics Sweden, the employment rate and unemployment from the labour market surveys, and unfilled vacancies from the Swedish Public Employment Service are also included. According to the RU indicator, resource utilisation is slightly higher than normal (see Figure 13). Figure 14 shows unemployment together with an average for the period 2000–2008 and an assessment of long-term unemployment.17 Seasonally-adjusted unemployment is presently higher than this long-term level. But assessments of long-term unemployment are fraught with great difficulties.
For some time now, particularly after the global financial crisis, stronger regulation and balance sheet constraints of the banking sector have also led to the rapid expansion of non-bank credit. For the most part, however, this expansion has not been  2  BIS central bankers’ speeches  well-managed, resulting in growing concerns with over-indebtedness in many parts of the world. One response has been to strengthen the regulation of such institutions, and reduce the inconsistencies in prudential and conduct standards that apply between banks and non-banks. Another has been to capture better information on the activities of non-banks as a basis to inform more targeted policy measures. The question of how to evolve the role of non-bank financial institutions to continue to contribute in sustainable way to financial inclusion is a complex one. While we can agree that a different approach to regulation from that applied to banks is justified, it cannot be at the expense of protection for financial consumers, and risks to financial stability. This middle ground is what is needed, taking into account the specific context of our own economies. The role of financial education Another important strategy for financial inclusion is the enhanced role of financial education. This is not only to encourage greater participation in the mainstream financial system, but also to keep individuals already in the mainstream from being financially excluded in future as a result of changes in the financial landscape.

The theme of the AFI Forum this year, “Driving Policies for Optimal Impact”, underlines the need for us to have a better understanding of the interactions between the objectives and effects of financial inclusion, financial stability and integrity, and consumer protection policies. This need has become more pronounced with the recent global developments. Global prudential standards have been significantly strengthened and are increasingly applied to financial institutions in developing countries. This has heightened the practical challenges faced in implementing these standards in a socio-economic setting where promoting inclusive opportunity is an important objective. The same is also true with stronger standards to combat money laundering to safeguard the integrity of the financial system. In building a  BIS central bankers’ speeches  1  financial system that is resilient against crises and abuse, we cannot neglect the socioeconomic impact of policies pursued. Our efforts to build a stronger and more stable financial system would also work to strengthen linkages between finance and development and not to weaken it. Consumer protection regulation is also being significantly strengthened in many countries following the global financial crisis. This has been driven in large part by the recognition that an effective consumer protection framework serves not only to protect individuals from excessive risk; it also has an important role in protecting the financial system from systemic risk.
While markets are currently rewarding those countries which liquefy public debt, they seem to be aware of some inflation “tail risks” and hedge themselves through gold and the CHF – whose prices have reached historical highs. At this stage, therefore, the euro area is paying a double price. One for its mistakes and one for its virtues. The mistake, for governments, was to allow the piling up of debt through unsustainable fiscal policies over a decade, and then to create ex nihilo a doubt as to their ability to pay those debts. And we are also paying the price for our virtue and our refusal to liquefy our debt through massive monetization of our fiscal deficits. Will our virtue be rewarded at the end? I believe so and, to explain why, I need to take a longer-term perspective. In the next decade, the world will be divided into two: on the one hand, advanced economies, with high absorption capacity, low savings and high debt with ratios between 85% and 100%; and, on the other, emerging economies, with high savings, low debt (around 30% GDP on average) and less absorption capacity. Our common prosperity will therefore depend on our ability to create stable channels and mechanisms of financial intermediation between those two parts of the world. That, in turn, will crucially depend on the existence of assets that can be considered safe stores of value.

The weak growth in productivity during 2001 and falling profits can also have a subduing effect on wage developments. During 2003 and 2004 the labour market situation is expected to gradually improve, which could contribute to a larger wage drift. A large part (70 per cent) of wages is determined at a local level. At the same time, inflation is expected to be slightly lower, which should have a subduing effect on the wage agreements signed. On average, wages are expected to increase by 4.1 and 4.3 per cent respectively during 2003 and 2004. Pricing and wage formation are influenced by inflation expectations among the different parties concerned, and therefore comprise an important part of the monetary policy analysis. Since March, households’ inflation expectations have remained around 2.5 per cent for one year ahead and the National Institute of Economic Research’s latest economic barometer shows that companies’ inflation expectations have remained more or less unchanged. (Diagram 5 - Actual inflation (CPI) as well as households’ and companies’ inflation expectations). In April, inflation measured in terms of CPI amounted to 2.5 per cent. The effects of the disturbances in supply that temporarily contributed to higher prices on energy and certain foodstuffs last year have abated, which has contributed to a decline in the inflation rate. In the short term, inflation is expected to continue to decline as these temporary effects disappear from the inflation measure. (Diagram 6 -  4  BIS Review 37/2002  Inflation. Outcome and main scenario).
The terrorist attack of 11 September 2001 has revealed how far-reaching implications for the international payment system may be brought about by switching off a large-value payment system in a single country. In the circumstances of the increasingly integrated financial markets, central banks must also cooperate more closely and have their contingency plans in place to inject liquidity to the global financial system in a crisis situation. 48 The private sector goes even further to suggest that in a crisis situation central banks should extend intraday credit facility to all banks (not only the domestic ones). Intraday credit could be collateralized by foreign currencies or securities denominated in foreign currencies – cross-border collateral pool facilities. 49  Conclusions Ladies and Gentlemen, globalization of financial markets, trade, manufacturing, services and knowledge is a great opportunity for the global economy. Owing to this process, the developing countries may modernise and grow faster than they have ever done before. On the other hand, both manufacturers and consumers in the developed countries take advantage of the access to the huge global labour market, which makes it possible to lower the costs of manufacturing, enhance productivity and – consequently – lower the prices of many goods and services. Both consumers and producers are also beneficiaries of globalization of the financial markets, which offer a wide range of products and enable a better adjustment of the risk profile and the expected return or cost to the preferences of investors and borrowers. Globalization also has its drawbacks.

The other option, described by Kohn as the “extra action” policy, provides for a deviation of current inflation from a level determined as stable, in return for an improvement of the perspectives of achieving price stability in the future. However, the extra action policy does not mean bursting speculative bubbles by central banks. It rather means “buying” additional insurance against possible negative shocks, which may happen in the future. In Kohn’s opinion, the extra action policy may be run very rarely and only where the three conditions are met: •  the central bank must be able to identify bubbles on the asset market in a timely manner and with high certainty as to the correctness of conclusions from the analysis,  •  the probability that a slight tightening of monetary policy will be able to stand against the speculative activity on a given asset market must be high,  •  the expected improvement of the future economic situation resulting from a smaller speculative bubble must be significant and higher than the costs incurred by the economy in the aftermath of running the additional action policy. In view of the available studies, it may be stated that it is extremely difficult to sufficiently fulfil the three abovementioned conditions. It may not be excluded, however, that in the future, the understanding of economic processes will improve as much as to enable running the additional action policy in justified cases.