samchain/econo-pairs-v1 huggingface dataset:
Although the Bank's monetary policy instrument is the short-term interest rate, its movements affect the complete yield curve. The effectiveness of changes in the MPR in this area hinges on the credibility of the Bank's decisions as perceived by economic agents. Here there are several areas, within which communication and transparency of decisions are essential. To the extent that individuals and companies understand and validate the Bank's decisions, their consumption and investment decisions will be consistent with the described scenarios, as well as with asset prices and market rates. For these reasons, the Bank makes special efforts be transparent and to communicate its decisions and scenarios in the best possible way. We publish a wide range of information 9  and all members of the Board are constantly making presentations to raise awareness of the Bank's vision, among many other efforts. Other important factors in the effectiveness of monetary policy are the changes in the external scenario. Being a small, open economy, Chile is subject to the vagaries of other countries. As we have said time and again, we can cushion their effects, but we cannot isolate ourselves from them. In that sense, significant fluctuations in the external scenario that, for example, produce unexpected or major changes in capital flows and external financial conditions, could affect local market rates. Again, the Bank's ability to provide liquidity that compensates for possible changes in external conditions is vital. The example of 2008 I just described is relevant here too.

Platforms such as this contribute to the rich marketplace of ideas that will spur us to think of innovative policies and effective ways to implement them. Tackling the issue of affordable housing requires us to be creative, proactive and holistic in our solutions. This will require collaboration and commitment from all parties involved; policymakers, the private sector, developers and the public at large. It will not be easy, but it is necessary for us to build a better future not just for our families, but for our future generations. 3/3  BIS central bankers' speeches
of the last two decades made us more so. We have relatively limited regulation of business activity, low barriers to entry by new firms, lower hiring and firing costs, and more worker mobility and turnover. A third key factor involves the U.S. financial system. Our system has proven to be exceptionally good at matching capital to ideas, at rewarding innovation and penalizing failure, and relatively more resilient to shocks. In comparison to the other major economies, banks are a smaller share of our financial system and the capital markets play a greater role. Securitization and other avenues for risk transfer advanced much more rapidly here. The venture capital, private equity and hedge fund parts of our financial system are much larger as a share of GDP than in the other major economies. These features of the U.S. financial system seem to have made us better at allocating U.S. savings, a more attractive place for the savings of other countries, and probably less vulnerable to shocks. They have also made macroeconomic policy more effective in responding to shocks. And a final factor, by most accounts, involved good policy choices. This has been an exceptionally good period for U.S. monetary policy, with the formidable combination of Volcker and Greenspan achieving a dramatic and sustained moderation in inflation.

There is no definitive consensus on this question, and economists have an interesting debate underway about how much of this was luck and how much was skill. Most observers seem to attribute the record to the following mix of factors. The first, of course, is technology. We experienced during this period the benefits of a powerful technology shock that made possible a revolution in the productivity of investment, in transportation and communication costs, in business methods, in computing power, etc. Given the speed with which technological advances are diffused, one might expect the benefits to have been more broadly spread among other economies, but that has not yet happened on a scale that is sufficient to narrow the growth gap. The extent of technological progress and its impact on economic growth were magnified by the openness and flexibility of the U.S. economy. The United States became significantly more open over the past decade, with imports and exports as a share of GDP rising by about 50 percent. This happened in part because of the impact of trade agreements like NAFTA and the Uruguay Round that lowered U.S. trade barriers, and in part because we stayed out of the way of the impact of technology  BIS Review 4/2005  1  and globalization and did not, on the whole, try to insulate the U.S. economy from the pressures of competition. We are by choice significantly more flexible than the other major economies. The major deregulations (telecom, transportation, finance, etc.)
Lastly, to bring inflation back sustainably to 2% in the medium term, Europe also needs to solve its supply constraints and challenges. 4/4  BIS - Central bankers' speeches

Caleb Fundanga: The cost of capital – wither the Zambian financial markets? Keynote address by Dr Caleb Fundanga, Governor of the Bank of Zambia, at the Zambia Institute of Chartered Accountants Annual Business Conference on “Change and the Paradigm Shift in the Accounting Profession”, Livingstone, 6 August 2010. *  *  *  The President of the Zambia Institute of Chartered Accountants; Mr Chintu Mulendema The Chief Executive of the Zambia Institute of Chartered Accountants; Mr Hapenga Kabeta Distinguished members of the Eastern, Central and Southern African Federation of Accountants Members of the Zambia Institute of Chartered Accountants Members of the Press Distinguished Guests Ladies and Gentlemen The theme for this symposium portends an important aspect of our daily lives, either at individual or corporate level. We are all, one way or the other, affected by developments in our financial markets. The role that finance plays in an economy is certainly an important one and you do not need to go far back in history for you to appreciate that role. You only need to make reference to the recent financial crises to appreciate the potency that finance has on economic activities. Chairperson, your choice of this topic therefore could not have been more appropriate. This topic is also timely given the current challenges that face many countries in the aftermath of the recent financial crisis, some of which seem to be just unfolding in some European countries.
As demonstrated by the thrift crisis, if many firms are all vulnerable to the same shock, ensuring that these firms are small and numerous won’t necessarily reduce the systemic risk they collectively pose to the financial system. Third, the costs incurred in breaking up such firms also need to be considered. Others have argued in favor of separating commercial and investment banking activities of the large banks. In my opinion, there are shortcomings to re-imposing Glass-Steagall-type activity restrictions. It is not obvious to me that the pairing of securities and banking businesses was an important causal element behind the financial crisis. In fact, independent investment banks were much more vulnerable during 2008 than the universal banking firms which conducted both banking and securities activities. More important is to address the well-known sources of instability in wholesale funding markets and to give careful consideration to whether there should be a more robust lender of last resort regime for securities activities. Evaluating the socially optimal size, scope and organizational structure of financial firms is a complicated exercise, and so is establishing a viable transition path to a system of much smaller banks. It would be helpful in this regard if advocates of the break-up solutions would develop detailed proposals that address the essential questions of how such downsizing or functional separation would be accomplished, and what the expected benefits and costs could be from such a restructuring. The recent financial crisis underscores the importance of financial stability as a necessary condition for a vibrant economy.

Second, legal changes need to be implemented abroad so that the one-day stay that applies to qualified financial contracts governed by U.S. law is enforceable against those contracts governed by foreign law. Only by making these changes can we avoid the potential for disruptive close outs. I strongly encourage the ongoing efforts to address this critical issue. A second issue with respect to Title II resolution on a cross-border basis is that we cannot be certain how foreign authorities will react when the parent holding company is put into the Title II proceeding. While the U.S. authorities have been in discussion with our colleagues abroad to enable the coordination needed for a smooth cross-border resolution process, uncertainties remain regarding the circumstances under which host authorities may either choose to take or be required to take actions such as unilateral “ring-fencing” that might disrupt the implementation of the single point of entry approach. Thus, we need to continue to work with foreign regulators to iron out any issues ahead of time to remove these uncertainties so that the resolution regime will work well for global, systemically important firms. Another issue with respect to the Title II resolution regime is the residual uncertainty about whether a particular firm in fact would go through a Title II resolution. Recall that under the Dodd-Frank Act, Title II is not the default approach for dealing with the failure of a large complex firm.
speech by Ben S. Bernanke, “Monetary policy since the onset of the crisis”, Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming, 31 August 2012. 3  In a foreign exchange swap, a given amount of foreign currency is purchased and sold simultaneously for two different dates. Consequently, this is a money market transaction that does not involve any exchange rate risk, thus differing from foreign exchange interventions. 2  BIS central bankers’ speeches  monetary conditions. Once the economic recovery had gained hold, the foreign currency purchases were suspended in June 2010. However, in summer 2011, the situation became so acute that the SNB had to take action again. After having employed the less far-reaching measures which I mentioned before, we set a minimum exchange rate against the euro on September 6, 2011. Since then, the SNB has made it perfectly clear that it is prepared to enforce this minimum rate through unlimited foreign currency purchases, if necessary. In setting a minimum exchange rate against the euro of CHF 1.20, we were reacting to the extreme appreciation in the Swiss franc. As you may recall, the price of the euro temporarily fell to as little as CHF 1.00 and that of the dollar to 70 centimes. The SNB’s aim with the minimum exchange rate is not to fine-tune the economy, but to provide the market with some guidance during a phase of great uncertainty.

In the previous years, the view had become established that monetary policy served financial stability best by focusing on price stability. This was linked to the widespread opinion that monetary policy should not “lean” against a growing bubble on the equity or real estate markets. It should wait until the bubble had burst before intervening and cleaning up. The “lean or clean” question was reassessed as a result of the financial crisis. It became evident that financial stability was not necessarily guaranteed, even where monetary policy – as measured by the criterion of price stability – was very successful. Moreover, the damage caused when a bubble bursts can be so enormous that it is not easily remedied using monetary policy instruments. To simplify things somewhat, we can distinguish two ways in which central banks can attempt to make a more substantial contribution to financial stability. The first is to steer monetary policy decisions more strongly in the direction of financial stability. The argument against this is the danger of overburdening monetary policy. One lesson from the years of the Great Inflation was that the overall result is not improved when monetary policy tries to achieve too many goals simultaneously. The credibility and success of monetary policy will inevitably suffer as a result. For this reason, the second option has much in its favour.
The standstill provides an essential breathing space during which accountants appointed by the company can report on its financial problems and prospects for survival, and the company can try to reorganize its business and management. Assuming that the company looks as if it is salvageable, the banks will normally be prepared to continue the standstill to allow proposals to be presented by the company’s financial advisers to restructure its debt, by for example extending its term, reducing the interest rate or even the principal amount and swapping debt for equity. If the shareholders are able and willing, it may also be possible for fresh capital or assets to be injected into the company to fill a hole in the balance sheet and to improve its income earning capacity. During the period of the standstill and while the restructuring plans are being formulated, it will be the responsibility of the lead bank appointed at the first all banks meeting to enforce the standstill, to negotiate with the company and its financial advisers and to share information with the other lending banks. The lead bank will be assisted in this process by a steering committee, normally consisting of about 4-6 banks. It is important to note that while the steering committee may recommend a restructuring plan to the bank group as a whole, it cannot commit them to it. This means that a workout can only go ahead if there is unanimous agreement among all the banks involved.

Investment cycle is expected to be further strengthened by the continuation of the productive fiscal investments. As the external demand is envisaged to recover further, additional stimuli is expected through this channel. The above mentioned growth factors are expected to strengthen further the labor market and the disposable income of the households, hence boosting the private consumption as well. The growth expectations provide room for additional rise of the deposit potential in the banking system, which accompanied with the rise in the credit demand and the willingness of the banks to lend, should enable credit growth at a rate of 9–10% in the period to come. The inflation is expected to be influenced mainly by the global prices of primary commodities and the consumers prices of our main trading partners. An average inflation of 0.5% is expected for 2015, with the current forecast indicating its reversal to 2% in 2016, reflecting the rise in the demand and in the import prices. The structural improvements in the export sector are expected to continue in 2015, which along with the overall external recovery and the much lower oil prices, are envisaged to bring about a moderate current  2  BIS central bankers’ speeches  account deficit of bellow 1.6% of GDP. In the following year, widening to 3% is expected, reflecting the fall in private transfers and import pressures from the new investment.
That left them exposed to a deterioration in financial conditions, particularly in liquidity, and so to a fall in “market” prices way beyond anything they contemplated, or perhaps still contemplate, for fundamental impairment. This is the mentality of traditional “banking book” risk assessment grafted on to post-Glass Steagall “trading book” valuations and financial accounting. As the regime currently works, mark-to-market is not – or, rather, cannot be – just an accounting convention; it needs to be a culture, or way of life, for those who adopt it. The dynamics of a financial system in which the vast majority employ MTM accounting, irrespective of their declared holding periods, are fundamentally different from one in which just a few “market-makers” do so. Third, therefore, the rules and infrastructure supporting the financial system need to help it withstand stress. Accounting and valuation policies is one such area, now being debated. Another is the trading and clearing platforms themselves. The authorities must do what they can to encourage the industry to focus on whether more wholesale market activity could and should be conducted across central trading and clearing platforms rather than OTC. In the past, intermediaries have tended to be doubtful about this. But it is plausible that the system would have been somewhat more resilient if “vanilla” products had been subjected to the minimum standards, greater pre and post-trade transparency, and centrally set margin requirements that accompany transacting across central infrastructure.

But we also need policies for containing systemic stress more generally; and, if possible, for heading off the risk of systemic problems in the first place. Like others, in speeches I have identified three elements in that armoury: monetary policy; central bank liquidity policy; and policies towards bank capitalisation and liquidity. Monetary policy I have for some years openly queried the notion that it is enough to rely on monetary policy “mopping up” after the event. 2  BIS Review 77/2008  The “mopping up” doctrine came out of a view that monetary authorities could not spot bubbles but that policy could cushion the bursting of what turned out to be a bubble. The doctrine effectively assumes that, faced with the possibility of systemic stress, the monetary authority can always reduce its policy rate without taking risks with inflation. The current conjuncture tests that assumption. There is a nasty shock to demand from tightening credit conditions, here and abroad. And that may get worse rather than better in the coming months. So far, the financial system has faced a “trading book” problem; but we cannot rule out a “banking book” problem caused by rising defaults. We face a race involving whether the deleveraging process can be sufficiently advanced for financial conditions to stabilise before macroeconomic slowdown, here and abroad, raises loan defaults and so brings a new dimension to the challenges in the banking sector and so to the supply of credit to the real economy.
As an illustration, emerging market economies have accounted for 70 percent of global output growth since the crisis—double their share from two decades ago.3 This growth has provided much-needed support to world economic activity, as advanced economies have recovered slowly from the crisis. Rising economic integration is also very evident when we examine the trade relationship between India and the United States. Bilateral trade flows have risen tenfold, from $ billion in 1995 to almost $ billion in 2015. In particular, half of U.S. imports of computer services are now sourced from India. In 2015, the stock of bilateral foreign direct investment in both countries was $ billion, up from $ billion in 2002.4 The potential for further increases has been reinforced by the liberalization measures India announced last year to encourage greater foreign direct investment. Benefits of Open Trade Increased trade, through its longer-term impact on productivity, has been a key contributor to global growth and prosperity since the Second World War. Openness to trade brings many benefits to the supply side of the economy. These include: larger markets, greater specialization opportunities, and the increased ability to exploit economies of scale and scope; faster transmission of technology and innovation; and greater competitive pressure on domestic firms to increase their productivity. Collectively, these forces lead to a more efficient allocation of a country’s scarce resources— one that is more closely aligned to its international comparative advantage.

Challenges of Open Trade It is important to recognize that while trade and international integration tend to increase the overall economic pie, the distribution of the larger pie may be very uneven. In fact, slices for individual groups may shrink. Some workers—particularly those in industries that are less able to compete and whose skills have become less relevant—can be hurt and find it difficult to adjust. This often requires individuals to change industries and to relocate to different regions. So, while trade is almost always a win for a country’s economy, not everyone within that economy will be a winner. This is especially the case where there are no policies to cushion the negative consequences of trade and to facilitate adjustment. Effects are also country- and industry-specific, and depend on initial endowments and conditions. Low-income workers in emerging markets, for example, may find it more difficult to adapt given weaker safety nets and less financial resources available to deal with adverse economic shocks. The bigger the adjustment process, the more the gains from trade will tend to be eroded. While the rise in the skill premium from trade liberalization has been well established for both developed and developing countries, determining the aggregate impact of trade on jobs has been more challenging. To date, the evidence has been mixed. We need further research in this area to determine with more confidence a reasonable range of estimates for these employment effects.