samchain/econo-pairs-v1 huggingface dataset:
Presumably the relation between the output gap and inflation varies both with the level of the output gap, with the speed of the change in the output gap and with the expectations on central bank behaviour. The Riksbank's monetary policy strategy An important part of the Riksbank's monetary policy inflation target strategy is clarity and openness about the bases on which monetary policy decisions are made. The intention is to create support for the price stability target and understanding of what governs interest rate decisions. This clarity means that the Riksbank's interest rate decisions are often expected and this increases the ability of the Riksbank to affect the somewhat longer rates through its analysis. This openness should also contribute to stabilising inflation expectations. The monetary policy decisions are based on forward-looking inflation assessments of CPI and UND1X – a price index adjusted for certain temporary effects. These assessments are reported in the Riksbank's inflation reports which are published four times a year. The minutes of the monetary policy meetings which are held between six and eight times a year are published with a couple of weeks time-lag. Inflation assessments are made with a two-year time horizon while paying some attention to the potential developments in the third year. Important determining factors for inflation are the development of demand and the output gap. A number of inflation indicators are used, however, to make the assessments. The quantity of money has no special role in the analysis although it is used as one of many indicators.

News conference  Berne, 16 June 2022 Andréa M. Maechler  Introductory remarks by Andréa M. Maechler I will begin my remarks with a review of developments on the financial markets over the past half-year. I would then like to discuss the lowering of the threshold factor mentioned by Thomas Jordan. Situation on the financial markets Volatility on the financial markets has increased again significantly since the beginning of the year (cf. chart 1). This was driven by the sharp rise in inflation abroad and by attendant expectations regarding a speedier tightening of monetary policy – especially in the US. Indeed, the Fed has already raised the target range for its federal funds rate in several increments and signalled its intention to increase rates further. In addition, the war in Ukraine and the associated sanctions have exacerbated existing supply bottlenecks and led to surges in energy and commodity prices. These developments have dampened growth expectations and increased uncertainty on the financial markets. On the government bond markets, the change in monetary policy direction has had a pronounced impact. In the US, nominal ten-year Treasury yields have risen almost 2 percentage points since the beginning of the year and most recently were standing at well above 3%. Shorter maturities were particularly affected by this revaluation, with a narrowing of yield differentials between long and short maturities. Such a flattening of yield curves is typical in a period of rising inflation and interest rate expectations.
High public debt can inhibit private investment, increase fiscal pressure, reduce social spending, and limit governments' ability to implement reforms". 1/5  BIS - Central bankers' speeches  Recent IMF research shows that the post-pandemic drag on growth could be much larger in countries where (1) indebtedness is more concentrated among financially stretched households and vulnerable firms, (2) fiscal space is limited, (3) the insolvency regime is inefficient, and (4) monetary policy needs to be tightened rapidly. It is not easy however to scientifically define the level of the debt threshold above which debt is inducing crowding out effects. For the case of private debt, different researchers quote different debt- to -GDP levels beyond which debt is considered to become unsustainable. This threshold ambiguity also holds for public debt, particularly given the fact that the public or private debt to GDP ratio is by itself an insufficient measure of debt sustainability. For example, it makes little sense to compare debt-to-GDP ratios for countries that have very different financial systems, economies, budget constraints and level of development. Because of all these differences, rising levels of debt are likely to affect the subsequent performance of each economy in a different way. The IMF's Debt Sustainability Analysis for example and its many parameters of identifying potential risks for public debt, reflects this complication.

Paul Fisher: Current issues in monetary policy Speech by Mr Paul Fisher, Executive Director for Markets and Member of the Monetary Policy Committee of the Bank of England, at the Global Borrowers and Investors Forum, London, 21 June 2011. *  *  *  I would like to thank Ronnie Driver for his help in preparing this speech. Monetary policy is currently a subject of great debate. More so than at any time since the start of the inflation targeting era nearly twenty years ago. That almost certainly reflects the hardships associated with the recession on the one hand and higher inflation on the other, with the resultant squeeze on real incomes affecting the vast majority of us. In this keynote address today, I want to assess some of the reasons why the current conjuncture is proving so difficult for achieving the inflation target. In summary, the nature of the shocks that have hit the economy mean that there is no easy path for monetary policy and the outlook for the economy is especially uncertain. The main message I want to get across, is that there is no magic solution to these challenges. The MPC are trying to set the best path back to the inflation target, but even the best path is an extremely uncomfortable one. Why has CPI inflation been so high recently? CPI inflation has been above its 2.0% target since December 2009, reaching 4½% in April and May 2011.
Yet it is still appropriate to increase banks’ resilience to losses when systemic risk increases. This is the primary purpose of the countercyclical capital buffer, which is now being introduced in Norway. The countercyclical capital buffer The amendments to the Financial Institutions Act that were approved in summer include a number of new capital adequacy standards. There are new buffer requirements in addition to the minimum Common Equity Tier 1 (CET1) capital ratio requirement. Banks that do not meet the buffer requirements will face restrictions on distributing dividend and paying out bonuses. Chart: New CET1 capital requirements for Norwegian banks The capital conservation buffer is permanent and independent of systemic risk. The systemic risk buffer is designed to act as a buffer against more persistent systemic risk and will apply to all Norwegian banks. In addition, the largest banks will be subject to a separate capital buffer requirement. The Norwegian authorities are currently formulating criteria for designating systemically important financial institutions. The countercyclical capital buffer is designed to act as a buffer against systemic risk that varies over time. The buffer rate is to be  2  BIS central bankers’ speeches  assessed each quarter, and will normally be between 0 and 2.5 percent of banks’ riskweighted assets. The requirement will apply to all banks operating in Norway, eventually also branches of foreign banks. On 4 October, a new regulation relating to the countercyclical capital buffer was approved by the Government.

It was the first time we had done so since the introduction of the repo as a monetary policy instrument. At the same time, we undertook a significant reduction in the repo rate used for our transactions. Our aim was to compensate the higher risk premiums through a lower repo rate, and to move the threemonth Libor back into the middle of the target range. The desired reaction ensued within a few days and the three-month Libor stabilised at 2.75%. We thereby neutralised the monetary policy impact of the higher risk premium. As announced a short while ago, we will also be supplying the market with ample liquidity as we approach the end of the year, and will be conducting longer term repo transactions with this in mind. At the operational level, steering the three-month Libor proved to be a challenge, due to the high and fluctuating level of the risk premium. Simultaneously, the benefits of our operational flexibility became very clear. Since we are generally present in the market on a daily basis with short-term repo transactions, we were in a position to adjust liquidity measures to individual market conditions. Over the past few months, we have made consistent use of this flexibility; first, by providing the banking system with generous amounts of seven-day money, gradually lowering the repo rates as we did so, and second, by absorbing liquidity that was no longer required as soon as the call money rate declined.
Thirdly, the crisis made it apparent that the framework for the resolution of failing banks was grossly inadequate. Although steps have been taken to address this question in several countries, a lot of issues remain to be solved, particularly relating to cross-border failures. But this is not for today’s discussion. The EU’s financial trilemma The core of the challenge facing the EU is conceptually quite simple. In Europe, we have built a framework based on the logically inconsistent idea of having one single market controlled by 27 sovereign nations. From a financial stability point of view, this is definitely no recipe for success. On the contrary, it is a source of coordination problems and conflicts of interest among the EU countries. This challenge has been described by Professor Dirk Schoenmaker as the “financial trilemma of Europe”. We have three goals – financial stability, integration, and national sovereignty – but only two of these can be reached. Figure 1  BIS central bankers’ speeches  1  Until the financial crisis, the combination of financial integration and national sovereignty seemed to work well in the EU (Figure 1). Financial crises were not considered to be likely and financial stability came far down on the political agenda. In connection with the financial crisis, however, policy makers have been forced to realise that increased financial stability has to come at the cost of either financial integration or national sovereignty. In principle, there are two options.

underestimating the regulatory capital needed further to a calculation using the sophisticated models allowed by Basel II and III. On the more technical side, there appears to be agreement on the definition and calculation of the ratio, the treatment of derivatives and repos, and operations with CCPs. But doubts remain over its final calibration and how it affects certain business models, specifically those most centred on retail activity. The Banco de España has supported the setting of this leverage ratio in Pillar 1 on the understanding that it can be a good prudential tool, once correctly calibrated. In this respect, the monitoring period prior to its entry into force will provide information and experience. Although European regulations envisage that countries may apply this ratio as they deem fit until its harmonisation in 2018, it is not the intention of the Banco de España, in principle, to bring forward its application. As regards liquidity, Basel III has added new regulatory requirements: a short-term liquidity coverage ratio (LCR), and a long-term requirement, the net stable funding ratio (NSFR). BIS central bankers’ speeches  1  The short-term liquidity coverage ratio is designed so that banks may have an asset buffer with which to meet their maximum foreseeable liquidity or funding needs over a period of at least 30 days. As what is involved is a safety margin, this ratio might at times of stress be below 100% of such maximum foreseeable needs, which is the level demanded once the requirements come fully into force.
As such, there is a great need for policy coordination among them to ensure an orderly supply of global liquidity. In the worst-case scenario, the multi-polar system could be more unstable especially during crisis periods. This is because the reserve currencies are close substitutes among themselves. As such, deterioration in the financial position of one reserve-issuing country could lead to severe capital flight, causing volatility in both exchange rates and asset prices. At this point, it is difficult to foresee if the management of global liquidity in the multi-polar system would be easier or more difficult than the current system. 8. As the multi-polar system is not immune from capital flow volatility, I would like to make a brief comment on recent IMF framework on capital flow management measures. While we support the work of the IMF in conducting empirical study on country experiences in managing surges of capital inflows, we do not support any rules-based approach in dealing with capital flow issues. Policymakers should be able to respond to such challenge in a pragmatic rather than rules-based manner. 9. Let me finish my talk with some comment on the SDR. In theory, there are many good reasons to enhance the role of SDR as one of its distinct advantages is the possibility of managing global liquidity without affecting the value of currencies in the basket. In addition, the basket also has the diversification advantage as the system will be less exposed to shocks in any of its constituent economies.

At this time, it may not be possible to move towards this system as there is not enough political support and many operational hurdles remain to be overcome. Nevertheless, it is important for the IMF to continue its work on how to broaden the use of SDR in all aspects of an international currency (i.e. store of value, medium of exchange and unit of account). Ladies and Gentlemen, 10. In closing, I would like to stress that the international monetary system is certainly in a period of transition. I do not expect a big bang, but a long and gradual process arising from macroeconomic and structural adjustments. Policy dialogue and cooperation between current and prospective reserve-issuing countries will play an important role in ensuring this smooth transition. As there are so many uncertainties along the way, it would take great leadership from some advanced and major emerging market economies to move the world forward towards a more stable international monetary system. Thank you  1  The Triffin dilemma is the conflict between domestic and international objectives of reserve issuing country. This is due to its duty to supply the world with extra currency, which may cause a loss of confidence in its currency. 2  BIS central bankers’ speeches
Hamad Al-Sayari: Corporate governance for banks in the Kingdom of Saudi Arabia Speech by His Excellency Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, at the High-Level Roundtable Discussion for Bank Executives on Corporate Governance for Banks in Saudi Arabia, Institute of Banking, Riyadh, 22-23 May 2007. *  *  *  Dear Distinguished Audience It is a great pleasure for me to welcome you, and I am delighted by your participation at this important conference on "Corporate Governance" organized jointly by the Institute of Banking and the IFC. Corporate Governance is popularly defined as a structural organization and executive procedures used to direct and manage business to achieve the objectives of the company and ensure its financial stability. In the past decade, this subject has taken increasing worldwide prominence because of its importance and relevance for the enhancement of macro-economic development and growth and the stability of the national financial systems in particular. In spite of the scarcity of books issued in Arabic on this subject, it is worth referring to two books; the first entitled "Corporate Governance" issued by Mr. Abdulmajeed Al-Bastati in 2004 and the second entitled “The Way towards a Governing System for Corporations" issued by Dr. Ibraheem AL-Muneef in 2006. The latter refers to a third book, which I have not read, issued by Mr. Saleh Ali Husein in 2003 under the title "Practicing and Managing the Authority in Business Organizations".

The circular is aimed at ensuring that directors and senior managers have sound reputation and are persons of integrity and honesty. Furthermore, over the past two decades, SAMA has issued additional governance related regulations and guidance to banks operating in Saudi Arabia. These include circulars on Internal Controls; Know Your Customers rules, Anti-Money Laundering and Combating Terrorism Financing and Prevention of Fraud. Also, there are specific regulations on the Role of the External Auditors and on the Internal Audit function. SAMA also requires the Board of Directors to establish a specialized Compliance Function that monitors the compliance of the organization with regulations and standards, and has a reporting line to the Board or one of its committees. Moreover, SAMA requires all banks to apply the International Financial Reporting Standards, and that two firms of external auditors are to conduct an annual audit. Furthermore, SAMA has required banks in Saudi Arabia to meet the corporate governance guidance emanating from the Basle Committee on Banking Supervision and more recently from the Islamic Financial Services Board. In this regard, I should mention that SAMA is participating in the IFSB Technical Committee and in various working groups that are developing standards of corporate governance for Shari'ah compliant financial institutions. The leadership role played by SAMA, over the past decades, in promulgating corporate governance standards and in promoting a governance culture has been reflected in the emergence of strong financial institutions and a credible banking system.
However, that seigniorage is dispersed among all the assets of the Central Bank and cannot be identified for the purpose of paying out to the government. Instead, what is explicitly recorded in the books of accounts is the interest income which the Bank earns on the assets it has created. All costs of the Bank are charged to this interest income and the net surplus is ascertained. That surplus is not automatically paid to the government, since Exter has made specific provisions regarding the appropriation of the profits of the Bank. In terms of these provisions, there is an order of priority for the appropriation of profits of the Bank. First, profits should be applied to pay any outstanding amount carried to a Monetary Adjustment Account on account of (a) extraordinary currency issue (b) expenses and interest payments on the issue of Bank’s own securities and (c) any interest paid on commercial bank reserves in that unlikely event of the Bank’s raising the statutory reserve ratio to 100 percent to fight a very high inflationary situation. Second, anything remaining after the first appropriation, a reserve should be created to a value of at least 15 percent of the domestic assets of the Bank. 6  BIS Review 92/2007  Third, if any profits are left out after the above two appropriations, the remaining profits can be paid to the government. In terms of the above provisions, the payment of profits to the government is the third and last priority on the scale.

It is in this part that he argued the case for a central bank for the country in preference to a currency board. Part II is a draft bill for the establishment of the Central Bank of Ceylon with explanatory comments. These comments have helped to guide generations of central bankers, in the past, what was exactly meant by each section or clause of the bill. It will continue to do so in the future as well. The commentaries presented were succinct, precise and to the point. They testify to the vast knowledge which Exter had about the functioning of an economy, his reading of the status and the direction of the country’s economy, the functioning of a monetary system both in domestic and global economies and how a central bank should be organized and operated. Hence, to understand Exter Philosophy of Central Banking, there is no better document than the Exter Report. Nearly six decades after John Exter completed the Exter Report, it would be useful to re-visit the report and assess his philosophy of central banking in the context of the body of knowledge of central banking today and identify its relevance to central bankers as guidance. This paper is an attempt at this exercise. The choice between a central bank and a currency board Prior to the establishment of a central bank, Sri Lanka was operating under a currency board system in which the country’s currency had been backed by 100 percent in foreign reserves maintained with the Reserve Bank of India.
We are happy to notice that President Draghi has underscored that investors would now face equal terms related to the Outright Monetary Transaction programme, as announced by the ECB. Draghi pointed out another risk factor in July, when he stated that risk premiums are not only linked to default or liquidity, “but they also have to do more and more with convertibility”. 2 President Draghi emphasised that this kind of risk is unacceptable. I believe the ECB has taken the relevant measures to eliminate such risks. Financial investors are risk-averse. They react to signals, expectations about the future and real adjustments. No doubt some European countries have a long and bumpy road ahead of them, before they get their government deficits and debt under control. My message is that positive steps have been made. As a consequence of the measures taken by the ECB, as well as initiatives taken by the European Union and by member states themselves, risk premiums have recently come down. If measures are carried out as intended, it is quite likely that global investors will again allocate the relevant part of their asset portfolios to European government bonds. Final remarks Let me return to an overall macroeconomic perspective: to factors decisive for sustainable growth. The existence of a large, broad-based business sector that is exposed to international competition and trade promotes learning and development. This is true for any country. In countries with abundant natural resources, the exposed sector may easily be scaled back, while sheltered sectors expand.

Under the Act, all government revenues from the oil sector are to be transferred to the Fund, and the net budget surplus is to be invested in international markets. At the time, in the midst of a deep recession, many doubted that any petroleum revenues would ever be saved. Projections indicated that offshore petroleum production would peak in the early 1990s. However, during this decade, the government’s cash flow from the petroleum sector started to increase sharply. Slide 7: The fund mechanism and fiscal policy The policy guidelines were clarified in 2001. Rules governing the interaction between Norway’s petroleum wealth and fiscal policy were established. Under the fiscal rule, the government can only spend in the annual budget, on average over an economic cycle, the expected real return on the Fund – estimated at 4 per cent annually. At the same time, Norges Bank was charged with the task of keeping inflation low and stable. Thus, our traditional fixed exchange rate policy was abandoned. A clear division of responsibilities between monetary and fiscal policy had been put in place. 2  BIS central bankers’ speeches  After two decades of spending petroleum revenues more or less as they accrued, the fiscal rule enabled the government to save for future generations. At the same time, the rule made fiscal policy more robust: By decoupling spending from current petroleum revenues, the fiscal rule provides for a gradual and sustainable phasing-in of petroleum revenue spending. The fiscal rule is no straitjacket; it allows automatic stabilisers to work.