samchain/econo-pairs-v1 huggingface dataset:
A series of factors can account for this behaviour. Some are transitory, such as the insufficient increase in employment, or the impact of deleveraging processes in some economies. But there are 4/7  also factors of a more structural nature, including the effect of globalisation and technological progress, or demographic factors. In any event, it should be stressed that there are other policies apart from monetary policy. In particular, both fiscal policy and structural reforms have a key role to play in supporting demand, boosting real interest rates and raising productivity and potential growth. Regarding monetary policy, the central question is this: to what extent should the macroeconomy of the “new normal” lead to a new “conventional model” for monetary policy? In particular, it is considered whether the management of the central bank’s balance sheet will become entrenched as a permanent part of the normal instruments of monetary policy. Estimates, while subject to major uncertainty, suggest that real interest rates and inflation will remain at low levels, meaning that nominal rates will also be low, thereby limiting their effectiveness as a monetary policy instrument. Against this background, central banks are likely to retain the use of unconventional monetary policies. Analysis of these policies is leading to debate, as yet inconclusive, on their effectiveness, the optimal size of central bank balance sheets and on the impact that they might have in terms of financial stability and the medium- and long-term fiscal situation.

Pre-crisis, monetary policy in the advanced economies was essentially defined by inflation targets and a key instrument, the interest rate. In parallel, the goal of financial stability was chiefly addressed with microprudential regulation and supervision. This framework was broadly consistent with the goal of economic growth, given that the control of inflation was 3/7  estimated to be the best means for ensuring the economy drew closer to its potential growth. The crisis showed that this framework was no longer valid. The control of inflation, though it remains a necessary condition, is not sufficient to ensure growth; and microprudential regulation was no longer effective, in or of itself, for guaranteeing financial stability. As a result, central banks have adapted their policies, which are now more complex in terms of objectives and instruments. Monetary policy has had to face up to the problem of what is known as the “zero bound” on interest rates. Basically, this is the situation that Keynes coined the “liquidity trap”: interest rates close to zero cease to be an effective monetary policy instrument. This has led to the development of new instruments, so-called “unconventional monetary policy”, which mainly includes quantitative easing, private and public-sector financial asset purchases, and the explanation and signalling of the monetary policy to be applied in the future, namely “forward guidance”. The outcome has been a large increase – four- or fivefold – in the balance sheet of the main economies’ central banks.
It is clear the events that took place at the end of the last and at the beginning of this year were real challenges for the Estonian monetary and financial system, testing their resilience and ability to adjust to the changing external environment. Today I dare to look at the situation with moderate optimism and repeat what has already been said in March: Estonia has all the possibilities of successfully passing through the crisis. BIS Review 91/2009  1  Estonia's monetary policy and financial stability in 2008 Turning to the tasks of Eesti Pank, I would like to start with an overview of the functioning of the monetary policy framework. The objective of Eesti Pank, member of the European System of Central Banks, is to ensure price stability in Estonia. To this end, we rest on the currency peg to the euro, the currency board arrangement and the EU exchange rate mechanism ERM II. The success of this system is confirmed by the slowdown in the price rise which started in 2008, and the halt in the growth rate of consumer prices in recent months. Looking ahead, Eesti Pank forecasts the price level to decline somewhat in both this and next year. It is clear the Estonian monetary policy or the monetary policy framework will not and must not be changed. The exchange rate of the Estonian kroon will remain as it is and we will accede to the euro area at the current exchange rate.

In order to achieve this, Eesti Pank is of the opinion that in addition to the steps taken in February, this year's fiscal deficit needs to be reduced by a further 6.5 billion kroons. In addition to fiscal consolidation, it is important to ensure long-term fiscal sustainability. Once the acute crisis is over, the first thing to do is to achieve fiscal balance. Then it is necessary to restore the public sector's extensive fiscal reserves. The national budget strategy recently approved by the government creates a necessary macro framework according to which the budget should reach balance by 2011. Eesti Pank is of the opinion the new strategy is a timely and ambitious document which requires cooperation also at Riigikogu level. Taking into account that government expenditure as a ratio to GDP has soared, budget adjustment must be done primarily on the expenditure side. Tax revenue increases may support the adjustment, but they should not play the main role. If only tax advances were used to finance costs at the current level, Estonia's long-term economic growth would be imperilled. Also, we support the principles of the current tax policy, according to which the share of indirect and pollution taxes would increase on account of direct taxes. I would like to emphasise once again that the measures taken over the past half a year in both the public and the private sector have improved Estonia's ability to exit the crisis.
Unable to adjust lending rates according to the creditworthiness of borrowers, banks resorted to significant collateral requirements and to credit rationing. The heavy reliance on real estate as collateral, the insufficient importance attached to the viability of project proposals, along with the absence of a capital market meant than savings were often not channelled efficiently into productive investment. The resulting misallocation of resources served to compound the distortions that would proliferate in the rest of the economy. A sea change in economic strategy occurred in the late eighties with the introduction of policies to reduce the overbearing state presence. These included a gradual reorientation towards a more market-oriented banking system and a monetary policy that operated more through incentives and less through command. A first reduction in the government’s shareholdings in banks took place during 1990/1991, and this was accompanied by a strengthening of the regulatory framework, including measures to enhance the capital base of banks through profit retention and the issue of new stock. A capital market, in the form of the Malta Stock Exchange, was also created. Supporting economic reforms included a relaxation of the extensive system of import controls, the partial lifting of wage-price controls and an overhaul of the income tax regime. While reforms were incremental, a number of landmarks stand out. In 1994, for example, a comprehensive package of legislation was enacted as part of a strategy to further develop Malta as an international financial centre.

In July, the repo-rate path was lowered substantially, and without this downward revision to the path, the forecast for inflation would have been even lower. 8  See also my speech “Monetary policy and macroprudential policy”, published on 25 January 2013. 4  BIS central bankers’ speeches  In principle, macroprudential policy tools can reduce the risks linked to household indebtedness in two different ways. First, one can increase the resilience of the financial system through, for instance, higher capital levels in the banks. It reduces the risk of a macroeconomic shock, for instance, a sharp fall in Swedish housing prices, developing into a banking crisis if the banks have more capital to absorb loan losses. Second, one can try to directly slow down growth in household indebtedness through, for instance, different types of limits to how much household are allowed to borrow. However, Sweden has long lacked a framework for macroprudential policy, with clear guidelines as to which authority should take action and what tools they should use. I and several of my colleagues have called for such a framework on many occasions. Now we have this framework in place. I now intend to describe the framework, the measures that have been taken and what remains to be done. The allocation of responsibility for the tools and the establishment of a Financial Stability Council The Government announced last autumn that Finansinspektionen would have the main responsibility for decisions on macroprudential policy measures and that a Financial Stability Council would be established.
There is certainly an element of rivalry between China and India but India is not going to allow itself to be used to check and contain China. Both Chinese and Indian leaders want their two countries to have good relations. They believe that the world is large enough to accommodate the aspirations of both, plus of course, the US, Europe, ASEAN and other countries. ASEAN with more than 500 million people is large but it is not a country. It is an organisation of 10 countries. It does not threaten the interests of the major powers. That is why ASEAN has been able to provide a neutral venue to bring larger powers together. Placing ASEAN at the centre of the Asian construct helps to reconcile and assuage the tensions between major players and their competing interests. It is also the reason why ASEAN must remain in the driver's seat and the political underpinning for the multitude of dialogues and fora that ASEAN has spawned such as the ASEAN +3, ASEAN Regional Forum and the East Asia Summit (EAS). The inaugural 16-member EAS was held last December. Major powers outside the grouping need not be worried that the EAS would work against their interests. It is in ASEAN's interest that the EAS remains open and inclusive. Conclusion Let me conclude. A rising new Asia will usher in a new era of opportunities for the world. It is therefore appropriate for the Institute of International Finance (IIF) to hold this meeting in Singapore, a gateway to access Asia.

Before moving to my next point, let me sum up some of the ideas expressed by quoting Alan Greenspan, who recently said: “Perhaps more critically, better risk management and the associated quantification have the real potential for reducing the wide attitudinal swings that are associated with the historical cyclical pattern in bank credit…” In a more general conclusion, I think that while the objectives of regulatory policies are different from those of monetary policy, the former should always be aware of the macro implications of their micro policies and the latter can clearly benefit from effective regulations that help ensure a safe and efficient financial system. 4. Procyclicality and the link between Basel II and monetary policy  So far, I have highlighted key features of Basel II which, in my opinion, will unambiguously tend to make the current terrain in which monetary policy operates a safer place. Yet in the course of the work  BIS Review 34/2005  5  conducted by the Committee and, especially, after the release of several consultative documents, there has also been lively and enriching discussion about several potentially negative side-effects of the revised capital framework. The issue of procyclicality, in particular, has attracted much attention.
Thomas Jordan: Bank regulation – what went wrong? What will improve? Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Forum für Universität und Gesellschaft, Berne, 24 March 2010. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The financial crisis has caused enormous damage. Massive losses were recorded in the global banking system. Many countries have gone through the worst recession since the Second World War. Government rescue measures had to be implemented to stabilise the financial system. Existing bank regulations were not able to prevent the crisis, nor were they able to at least contain the damage to such an extent that government rescue packages would not have become necessary. While before the financial crisis, there was considerable uncertainty about possible shortcomings in bank regulation, these have now become apparent and will have to be tackled. In addition, the provision of implicit state guarantees has made the need for action even more urgent. Big banks – believing that they will receive government assistance if they run into problems – have even stronger incentives now to take on excessive risk. This increases the risk of another crisis and erodes the fundamental principle of the market economy – competition. Once again, in the future, banks will have to bear their own risks. The failure of a bank should no longer jeopardise the stability of our financial system.

In order to reduce the intermediation costs of the banking system and provide additional support to core liabilities, we raised the remuneration rates on TL required reserves by 50 basis points each month in September, October and December 2015. Additionally, we made some adjustments to the coverage of reserve requirements on 9 January 2016. Accordingly, some funds at participation and investment banks were made subject to reserve requirements and the coverage of non-core liabilities was expanded. BIS central bankers’ speeches  3  Chart 7. Maturities of Non-Deposit Liabilities (Percent)  Chart 8. ROM Reserves, FX Deposit Facility and External FX Liabilities of the Banking Sector Due in 1 Year (Billion USD)  Source: CBRT. Source: CBRT. In the road map released in August, we also included some measures to enhance the flexibility of the foreign exchange liquidity management. To this end, we hiked the transaction limits for banks at the CBRT Foreign Exchange and Banknotes Markets on 1 September 2015. Consequently, the sum of FX deposit limits allocated to banks and gold and foreign exchange assets held at the CBRT under the reserve option mechanism (ROM) reached a level that is considerably above the external debt payments of banks which are due within one year (Chart 8). Moreover, in the “Monetary and Exchange Rate Policy for 2016”, we announced further steps to strengthen the stabilizing feature of the ROM. All these measures taken in line with the road map have increased Turkey’s resilience against global volatility.
That means setting Bank Rate to eliminate the remaining slack in the economy, bringing about the sustained increase in costs necessary to achieve overall inflation of 2%. I expect that this will involve raising Bank Rate over the next three years from its current alltime low of ½ per cent. The need for Bank Rate to rise reflects the momentum in the economy and a gradual firming of underlying inflationary pressures – a firming that will become more apparent as the effects of past commodity price falls drop out of the annual inflation rate around the end of the year. It also reflects the lags in monetary policy, given that the peak impact on inflation of a given adjustment in interest rates is likely to materialise around 18–24 months after the change. As the economy evolves, different factors will become worthy of particular attention in informing the timing, pace and degree of likely Bank Rate increases. At the current juncture, three stand out. First are the prospects that sustained momentum in economic activity will wring out any remaining slack. This will require sustained growth above its past average of around 0.6 per cent per quarter. 22 Even though the current recovery has been the slowest since the Great Depression, taking around 1½ years longer to regain lost ground than it did following the recession of the 1930s, the signs are encouraging.

Indeed, within a few months of its agreement, by the end of August 1215, John had convinced Pope Innocent III to annul the Charter on the grounds that it had been issued under duress. 16 The 1215 Magna Carta was never enacted, and England slipped into the First Barons’ War. Charters of this type were not uncommon at that time. It had been fairly routine, in fact, for English kings to attempt to curry favour with the nobles upon whom the stability of their realm depended by rubbishing the reputations of their predecessors and issuing “coronation charters” that demonstrated how virtuous and peace-loving they were by comparison. It was also fairly routine for kings to renege on the promises in those charters, creating fertile ground to begin the cycle anew. 17 What was novel about Magna Carta was that: (a) it was longer and more detailed than its predecessors; and (b) it was issued not at John’s coronation, but under compulsion from a true political opposition, sixteen years into his reign and evidentially too late to serve its purpose. 18 This brings a second observation. Obnoxious and tyrannical as he might have been, King John was not solely to blame for the aristocratic discontent that led to Magna Carta. His predecessors had reneged on their promises, mismanaged the realm and imperilled its finances. John’s administrative and military incompetence were merely the straws that broke the camel’s back. If Magna Carta was such a product of its time, how did it become to be so venerated?
The process of adjusting to a new, higher rate of productivity growth leads initially to a good circle. Rising productivity tends to drive share prices up and that in turn makes new investment easier to finance. New investment and a growing capital stock imply a larger proportion of capital and accordingly give productivity growth a further upward shift. This in turn drives share prices upwards again and so on. A continuation of this process can lead to risks for economic development: •  One source of problems can lie in the financial markets’ reaction to rising productivity. Expectations of the future unfortunately become unduly optimistic at times. Under such circumstances, expectations of rising profits lead to an increased supply of credit, rising prices for shares and real estate that result in a further expansion of credit, and so on. When such a bubble ultimately bursts, the negative economic effects can be serious and lead to a crisis in the banking system. 4  BIS Review 30/2001  •  Excessive euphoria can also lead to an undue expansion of the capital stock. This perspective is derived from the Austrian school. Extensive investment is undertaken in sectors that will never yield the return that was expected initially. The speculative fever simply results in misplaced investment. The subsequent process of adjustment accordingly involves markedly subdued investment activity and an attendant economic trend that is weak for a fairly long period. 4.

Urban Bäckström: What shall guide monetary policy? Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, to the Swedish Economics Association, Stockholm, 17 April 2001. *  *  *  Thank you for inviting me once again to the Swedish Economics Association to discuss various aspects of the Riksbank and monetary policy. I greatly appreciate the opportunity of addressing what can be called a historical and academic forum and conducting a dialogue about economic policy both with the two opponents and with other scholars and students. The inflation target has been monetary policy’s rudder ever since 1993 and I believe most people would agree that on the whole in this period it has functioned fairly well. After a couple of decades of high inflation, we have managed to re-establish price stability. Market players as well as people in general are now more confident in and have a better understanding of the regime and the general formation of monetary policy. It also looks as though the importance of fiscal discipline as a means of supporting the monetary policy regime is anchored in the political system and in Swedish society. Sweden is not the only country where a regime with an explicit inflation target seems to be working well.
We could spend much time discussing how this transformation happened. From my vantage point, it happened because of the combined effects of the Federal sentencing guidelines, the Delaware Chancery Court’s Caremark decision,1 and the post-Enron legislation known as Sarbanes Oxley. Of course, other events also fueled the transformation, and in the financial services industry, the worst financial crisis our country has seen since the Great Depression became a burning platform. While it is always important to look back at the road traveled, I am not going to spend any more time on that particular topic. Instead, today I intend to look forward at where compliance is going, and to forecast for our future some things we should pay attention to now. I will discuss five different items, and I predict that some of the greatest accomplishments for compliance are not in the recent past but in the not-too-distant future. If we plan ahead, and if we can successfully adapt to changing circumstances in our respective industries and in the national and global economies, then 20 years from now you will listen to another keynote speaker remarking on further amazing progress for the compliance profession. In short, we are on our way to another level. Important steps toward the next level Most of my remarks today will be devoted to the things that I believe will get us to the next level. Let me turn to them now. 1.

With respect to individual countries, we should continue working to strengthen the bilateral surveillance process. While focused on the country at hand, it would be important that bilateral surveillance be fully-informed by regional and global perspectives as well. Systemically important countries will clearly continue to deserve special attention. Operationally, our respective country teams will remain the focal points for our activities in individual members. At the same time, country teams will continue to draw upon specialized expertise where necessary, from both inside and outside of the Fund. To maintain overall coherence, it would be important for efforts to continue in the integration and sharing of information among country teams and specialized experts. Second, our work in financial sectors and capital markets. The IMF is the one international organization capable of carrying out financial sector surveillance universally and comprehensively. Further efforts will be needed to realize this potential, not least by deepening the IMF’s role in anticipating sources of instability in national and global financial markets, and in generating timely action to address them. The IMF will continue to help countries strengthen their financial sectors, including in following up on the findings of the Financial Sector Assessment Program (FSAP) exercises. One important aspect of this will be to help members adapt their prudential and administrative frameworks to benefit more from private capital flows.