samchain/econo-pairs-v1 huggingface dataset:
Ardian Fullani: Overview of Albania’s latest monetary and economic developments and outlook Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision of the Bank of Albania’s Supervisory Council, Tirana, 27 March 2014. *  *  *  Today, on 27 March 2013, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Given Albania’s latest monetary and economic developments and discussions on their outlook, the Supervisory Council of the Bank of Albania decided to keep the key interest rate unchanged, at 2.75%. The Council deems that inflationary pressures on the economy remain subdued. Under these circumstances, the monetary policy will continue to be stimulating in the period ahead to provide the necessary conditions for compliance with our inflation target in the medium run. Let me now proceed with an overview of economic developments and key issues discussed at today’s meeting. *  *  *  Annual inflation stood at 1.9% in February, slightly up from a month earlier. The increase resulted from higher prices of agricultural products, tariffs of potable water in some regions of the country, and vehicle insurance premiums. Prices of other items of the consumer basket are stable and their inflation is low. New information obtained during the last month is limited. It does not alter our assessment that the overall economic and financial setting is characterised by low inflationary pressures. Our projections have remained overall unchanged, but near-term downside risks are assessed as high.

Reflecting the weakness in aggregate demand, the output gap remains negative and the Albanian economy is still characterised by incomplete utilisation of production capacities. The lower economic growth and poor performance of the employment index have led to weaker pressures on increasing wages and production costs. Also, the sluggish aggregate demand keeps profit margins low. Weak pressures from production costs and downward inflation expectations were the main drivers lowering core and headline inflation rates. In parallel, imported inflation was contained due to low inflation rates internationally and the exchange rate stability. This situation is expected to continue in the quarters ahead. The macroeconomic analysis, updated with information for the first two months of the year, suggests low economic growth during this period. Private investments and consumption remained weak because of the low confidence of economic agents, slowdown of disposable income, tight lending terms, and presence of spare production capacities. Trade deficit expanded 3.6% in January, primarily as a result of declining exports, in contrast to a month earlier, when it expanded due to unusual import growth. “Minerals, fuels and electric energy” were the main drivers of contraction in exports of goods. On the other hand, exports of goods in the category of “Textiles and footwear” increased. In response to enhanced competitiveness and shifting of financial and human resources towards exporting sectors, export growth should be one of the main pillars of Albania’s economic development in the period ahead.
Monetary policy stimulation has less effect than normal and developments in the economy as a whole are weak. Studies show that this type of mechanism largely explains why the recovery in the United States has been, and still is, so slow.2 A financial crisis may also have other consequences. For instance, one can claim that the sovereign debt crisis we are currently in the midst of is in many ways a consequence of the financial crisis, and thus of the credit expansion that preceded it. Bank crises and sovereign debt crises are often connected. Public finances in many countries have weakened substantially because demand has fallen and in some cases also because they have needed to support a precarious banking system. Moreover, in many countries the credit expansion concealed the need for structural reforms in the labour market and in public administration, which meant they were ill-equipped when the recession came. So, all in all, there are many good reasons to try to avoid a situation where credit and lending accelerate out of control. Various perceptions of the link between monetary policy and financial stability policy So what should we do to prevent, or at least reduce the risk of, this type of development in the future? Opinion is currently divided on this question. The role central banks should play has been debated a lot, and in particular whether rate-setting should be used to subdue credit expansion.

The capital can be regarded as the buffer necessary to avoid tax-payers having to bear the costs in a crisis. If one has regulated how various lenders should contribute, the need for a buffer is reduced. With these reflections, it is time for me to wind up. Not just my speech here today, but in a few days my time as a member of the Executive Board of the Riksbank. As I said, it has been thirteen very eventful years. At present the international debate is intensive and there are many tricky questions to be resolved – not least in crisis management and supervision of the financial markets. The job is still interesting. But there is a time for everything, and we all know that it is best to stop when you are still having fun. BIS central bankers’ speeches  11
There are not a few cases when clients are not well informed on the interest rate they have to pay for their loans or on the criteria applied by the banks to benefit credit. Communication from depositors is neither the best. While small changes of deposit interests may be justified by the changes of market conditions, changes somewhat stronger need to be accompanied by full relevant information and explanations. The strengthening of this transparency should be accomplished not only in the name of ethics but also in the name of the increase of market competition. The system can play a greater role in reducing cash in the economy, by increasing and improving further the level of services. The positive recent developments have given their effects in reducing cash quantity in the economy. On the other hand, we have conducted an intense public activity, of informative and promotional character, where meetings of another nature have frequently been held and in which we were concretely involved as a banking system. Allow me just to remind you the open meetings we have already organised with the business of utility services and with that of Treasury bills primary market. I hope that now, after finalising the Automated Electronic Clearing House project, each bank should think seriously of increasing the benefit degree from this new facility offered by the Bank of Albania. After the implementation of this project, I estimate that we should think more seriously of increasing the number and the quality of electronic payments.

Prasarn Trairatvorakul: Monetary policy in an interconnected global economy Opening remarks by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at a conference co-hosted by the Bank of Thailand and the International Monetary Fund, Bangkok, 1 November 2013. *  *  *  Distinguished Participants, Ladies and Gentlemen, I am delighted to welcome you to this conference on “Monetary Policy in an Interconnected Global Economy,” co-hosted by the Bank of Thailand and the International Monetary Fund. I would like to especially thank our international guests who have travelled a long way to be with us today. This conference will focus on several issues pertaining to cross-country linkages, international shock transmission, and how monetary policy should be conducted in response to global spillovers. One of the most important trends over the past decades is the rapid integration of international trade and finance. Trade in goods and services, as a share of world GDP, increased from around 15 percent in the early 1980s to around 25 percent before the start of the crisis in 2007. These developments reflect, in part, the increasing internationalization of production through vertical trade linkages. We have also seen a significant increase in financial integration. While the annual growth in world trade over the past 40 years has exceeded the growth in world GDP by around 2.6 percent on average, growth in international external positions outpaced growth in world GDP by almost double that – around 4.8 percent. What are the implications of these tighter trade and financial linkages?
There will also, eventually, need to be a way to scale back the extraordinary levels of liquidity support provided by central banks during the crisis. The Bank of England has lent, and continues to lend, over £ billion pounds through our repo operations and the Special Liquidity Scheme. And a backstop of further liquidity support is still available if the system  BIS Review 32/2009  7  requires it through our discount window. The Federal Reserve has lent more than $ billion dollars, and the ECB around € Relative to GDP, the balance sheet of the three central banks has broadly doubled during the crisis. But in providing this support, central banks cannot offer long-term funding and should not offer support against assets that are unlikely to have a viable future in the absence of official intervention. At some point central bank balance sheets will need to contract. Finally, although I have stressed the need to take time to think through carefully the long run reforms required, we need to commit now, while the political will exists, to a process for decisions on long-term reforms in key areas such as bank regulation, reform of the international monetary system and the governance of international financial institutions. Conclusions Why did no one see this crisis coming? In fact, most of the underlying causes of the crisis attracted attention from economists, central banks, international financial institutions and regulators. But the difficulty of overcoming coordination or collective action problems meant that nothing was done.

Year after year international meetings expressed surprise, and indeed concern, that the imbalances continued to accumulate, but in the absence of a correction the theme became a worn groove in discussions and interest waned. The more forcefully the warnings were expressed, the more they were ignored, precisely because each country appeared able on its own to achieve price stability and steady growth despite the continued build-up of the imbalances. The consequences of this are now evident: a severe global downturn affecting virtually every country in the world. In a world of imbalances it is just as dangerous to rely too heavily on foreign demand for goods and services as it is to rely excessively on foreign borrowing. Surely now no country can be indifferent to the objective of improving the consistency of our macroeconomic strategies. So I hope that the debate about the need for symmetric obligations on surplus and debtor countries alike will move on from previous unsuccessful dialogues stretching back to the Bretton Woods conference in 1944. Turning to the “micro” cause of the crisis, a root cause was a degree of over optimism in financial markets. History, whether the run up to the 1929 stock market crash or more recently in the dotcom mania, suggests that only very substantial rises in short-term interest rates will bring to an end the excessive speculation, and that such rises bring about the very recession which the policy is designed to avert.
The extensive liquidity assistance provided the time needed to find a solution to safeguard financial stability. This solution had to be worked out under considerable time pressure in order to be ready before the Asian markets opened this week. A Credit Suisse bankruptcy would have had serious consequences for national and international financial stability and for the Swiss economy. Taking this risk would have been irresponsible. On Sunday, the takeover of Credit Suisse by UBS was announced. At that time, we said that the SNB would provide additional substantial liquidity in the form of loans to support the successful implementation of the takeover. The SNB provides such liquidity assistance within the scope of its statutory task to contribute to the stability of the financial system. In exceptional situations, as the lender of last resort we provide emergency liquidity against sufficient collateral. The solvency of the bank must be confirmed by FINMA in each case. Let me make one thing very clear: our liquidity measures are loans that are secured and subject to interest, and not gifts. The measures taken by the federal government, FINMA and the SNB have put a halt to the crisis surrounding Credit Suisse. In a few minutes, Martin Schlegel will explain the structure of the liquidity assistance loans in detail. Andréa Maechler will then talk about our cooperation with other central banks over the last few days. She will also briefly explain the impact of the liquidity measures on the implementation of our monetary policy.

Banks can now draw US dollar liquidity from their central banks with increased frequency if needed. To this end, since 20 March we have been conducting our US dollar repo auctions on a daily rather than a weekly basis, and will continue to do so until at least the end of April 2023. Through their cooperation, the participating central banks ensure that US dollar liquidity is distributed throughout the system, thereby jointly helping to secure global financial stability. Let me now turn to the implementation of our monetary policy on the money market. Banks’ sight deposits and the liquidity on the Swiss franc money market are increasing due to our liquidity assistance. To ensure that secured short-term money market interest rates remain close to the SNB policy rate and do not decline, we are absorbing sufficient sight deposits through the weekly issuance of SNB Bills as well as with daily repo auctions. In addition, we are selectively conducting overnight repo transactions. Our flexible set of monetary policy instruments allows us to keep secured short-term money market rates close to the SNB policy rate also in the current situation. I would now like to hand back to Thomas Jordan. Conclusion  Ladies and gentlemen, allow me to conclude. Within the framework of its mandate, the SNB will use all of the resources at its disposal to ensure price stability in Switzerland and to contribute to financial stability. Thank you for your attention. We are ready to answer your questions.
To the extent that the speculators had to borrow in the interbank market to fund their short Hong Kong dollar positions, the interbank interest rates were high enough to force the currency speculators to abandon the attacks, unwind their short positions, and incur substantial losses. The finely tuned currency board system worked well, but the interest rate volatility was extreme: during one attack, on 23 October 1997, the overnight interest rate shot up to nearly 300%. The stock market took a nosedive, and the HKMA was sharply criticized for relying on this single tool, the interest rate, to defend the Hong Kong dollar. In August the speculators adopted a more sophisticated ploy. They introduced a form of double play aimed at playing off the currency board system against the stock and futures markets. First, to avoid being squeezed by high interest rates, they prefunded themselves in Hong Kong dollars BIS Review 98/1998  -3-  in the debt market, swapping US dollars for Hong Kong dollars with multilateral institutions that have raised Hong Kong dollars through the issue of debt. At the same time, they accumulated large short positions in the stock index futures market. They then sought to engineer extreme conditions in the money market by dumping huge amounts of Hong Kong dollars. This sell-off was intended to cause a sharp interest rate hike, which in turn would have sent the stock market plummeting.

These safeguards will include improvements to cross-market surveillance in Hong Kong, and an in-depth exploration of possibilities for further strengthening the resilience of the currency board system - an exercise which is now making good progress. More widely, we need to continue to develop Hong Kong’s position as a premier international financial centre. Practical measures recently announced by the Chief Executive of the HKSAR will help in this: they include schemes ranging from the upgrading of the security and efficiency of our entire financial infrastructure to the expansion of research facilities in the form of a monetary institute affiliated to the HKMA. The emphasis in all of this is not on intervention, but on facilitation. As a government, we do not direct the form that economic growth should take: we simply strive to provide the best environment that we can to enable growth to take place. In the financial sphere that means a stable currency, a credible and secure banking system, and markets that sustain, rather than undermine, economic development. There is much that we can do - and have done - locally to achieve these aims. But increasingly, the solutions have to be global solutions, because, as the events of the last year have amply demonstrated, some of the most intractable problems facing our financial systems straddle borders and thrive in the cracks and holes between jurisdictions. Globalization - the breaking down of economic barriers - has brought many benefits, particularly to our own region.
Other economists, such as Professor Torsten Persson at Stockholm University, estimate the trade gain at one fifth of this. An increased openness towards other countries has a positive effect on growth and on incomes. The European integration should therefore, in my opinion, not be limited to the borders of the EU, but be the first stage towards greater global openness. This openness would also contribute to increased competition, but would not replace a domestic competition policy. Both openness and a tightening up of the domestic conditions for competition would also lead to lower prices and increased welfare. Conclusion  During the 1990s there were a number of structural changes in the Swedish economy, which are together assumed to have increased potential growth. There were extensive reforms in the taxation, social insurance and pension systems. Deregulation, increased internationalisation, EU membership, a credible low inflation policy and stable public finances are other factors which should also have had positive effects. It was also proven during several years in the 1990s that a high growth rate was compatible with a low inflation rate. However, the strong growth in demand in recent years has gradually reduced the amount of available resources. The Riksbank concluded in its most recent Inflation Report, which was published on 19 March, that a significant part of the high inflation rate over the past year can be an indicator that resource utilisation was slightly higher than was compatible with the Riksbank's inflation target.

The part of household consumption that takes place in Swedish markets exposed to competition has 6 increased during the 1990s – from 25 per cent in 1991 to 32 per cent in 1999. However, this level is still below the EU, where 46 per cent of consumption is in markets exposed to competition. A number of different markets have been opened up to competition over the past ten years and Sweden is in many aspects a model for other countries to follow. Examples of markets that have been exposed to competition are the electricity market, post and telecommunications, the capital and foreign exchange market and a large part of the transport sector. The main areas where competitive pressure in Sweden is tangibly lower than in the EU and prices are higher are the food and housing sectors (and the construction sector). Swedish food prices are just over 20 per cent higher than in the rest of the EU, 7 while housing is around 35 per cent more expensive. These areas of expenditure together comprise more than ¼ of the CPI basket and are also responsible for a large part of low income earners' total expenditure. The absence of competition in the greater part of the public sector, which constitutes approximately 30 per cent of the Swedish economy, entails both a risk of lower efficiency and that a significant part of the economy is not offered alternatives in the form of new business ventures with the growth and th flexibility that small companies can offer.
In July, CPI inflation increased by 0.7 per cent compared with July last year, and CPIF inflation increased by 0.8 per cent. This was completely in line with our forecasts and with market expectations. Information on developments in the real economy during the third quarter is so far limited to the business and consumer tendency surveys for July and to the purchasing managers’ index for July. The National Institute of Economic  BIS central bankers’ speeches  5  Research’s economic tendency survey fell in July and is at a level indicating that growth in the economy is weaker than normal. The confidence indicator for households did rise compared with June, and then to a level just above the historical average. Another bright spot was that the indicator for the manufacturing industry rose. This is in line with the indications from thepurchasing managers’ index for the manufacturing industry, which also rose in July. However, one must exercise caution in drawing conclusions on the basis of changes in individual months. Appreciation of the krona during the summer Another significant factor this summer has been the large appreciation of the krona in relation to the euro. This, together with the fact that the krona has increased in value against other currencies, too, means that it has appreciated in trade-weighted terms this summer. Our forecast in July was that the krona would strengthen, given the relatively good economic developments in Sweden and given our robust public finances.

OECD projections, in fact, point to a reduction in saving rates of between 5 and 12 percentage points of GNP over the period 1980 to 2025. Such a contraction could lead to a vicious circle, as the resulting higher interest rates reduce investment, adversely affecting economic growth and, in turn, the ability to finance social security commitments. Ageing could also have a negative impact on financial markets. Pension funds are at present major players in most stock markets. As the baby boom generation retires during the current decade, most of these funds will have to gradually liquidate their assets, probably leading to downward pressures on share prices. This would in turn create a negative wealth effect, as declining asset prices dent the purchasing power of households and give rise to a reassessment of consumption patterns. The simultaneous decline in fertility rates, meanwhile, is expected to adversely affect the supply of labour and its quality. A smaller labour force would act as a drag on potential output growth, and impact negatively on competitiveness by tightening labour market conditions, leading to upward pressures on wages and inflation. An older work force is also likely to be less mobile and flexible, albeit more experienced. Policy measures to address the challenge In economic terms, population ageing is tantamount to a negative supply shock, of which the fiscal impact is but a manifestation. More fundamentally, the ageing phenomenon undermines the economy’s productive base and its competitiveness.