samchain/econo-pairs-v1 huggingface dataset:
We have recently seen how badly lax lending and improper credit risk management can end in developed countries. In the case of converging economies, which are generally more financially vulnerable than fully-fledged market economies, it is all the more important to closely monitor risks to the financial system, enhance cooperation between financial institutions and supervisory authorities, and impose prudential constraints on lending. * The ideas that I have summarized so far were expressed in the papers prepared and presented by economists from academia, central banks, and international financial institutions. We have also heard important voices of top commercial bank executives and central bank governors during the panel that has just ended. Household credit, and mortgages in particular, will remain an important source of revenues and profits for commercial banks. At the same time central bankers and banking sector supervisors will likely watch credit developments very closely to make sure that best lending practices are in place. In closing, I would again like to thank you all for attending the conference. I would like to thank the organizing committee and the NBP staff for their excellent work. I hope to meet you again at another conference organized by the National Bank of Poland. Thank you. 4  BIS Review 137/2007

John C Williams: Inflation targeting - securing the anchor Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bank of England Research Workshop on "The Future of Inflation Targeting", London, 9 January 2020. * * * As prepared for delivery  Introduction Good afternoon, and happy new year. Monetary policy frameworks are complex, technical, and rarely make it into the public consciousness. But they are of vital importance to economic prosperity. And as we stand on the brink of a new decade, it is critically important that we understand how the frameworks central banks choose influence economic outcomes, both today and in the future. When Andy Haldane invited me to be on the panel, he posed the provocative question: What will monetary policy frameworks look like 30 years from now? As a policymaker, I try to avoid making predictions for the future. But given that I will assuredly be an ex-central banker in the year 2050, I think I’m safe to have free rein! That said, I should still give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. In my remarks today, I’ll discuss how the monetary policy landscape has evolved, and what that means for inflation targeting in 2020, 2050, and beyond.
I will mention three of these challenges. BIS central bankers’ speeches  1  2. But challenges remain to be addressed. 2.1. The challenge for each individual euro country: achieving strong fiscal consolidation while ensuring long-term growth  The first challenge is the seeming dilemma between fiscal consolidation and long-term growth. One thing is very clear: this crisis is fundamentally a sovereign debt crisis; hence the priority in order to exit it once and for all must be a return to a sustainable fiscal path. In fact, an impressive effort has already been made. The Portuguese deficit shrank from around 10% in 2009 to around 6% last year. The Italian deficit has been reined in from 5.4% in 2009 to 3.9% in 2011, and Italy actually ran a primary surplus of 1% last year, which is very rare among developed economies. The French deficit has been cut from 7.5% in 2009 to 5.3% in 2011. If we look at the aggregate picture for the euro area, we see that it is the economic zone that has tackled fiscal consolidation with the greatest intensity and the best results. According to the IMF (January 2012 fiscal monitor), after peaking at 6.5% of GDP in 2009, the public deficit in the euro area started to decline in 2010 and stood at around 4% by the end of 2011 (down by 40%). Over the same period, the US deficit was reduced from 13% to 9.5% (down by 27%) and the UK deficit from 10.4% to 8.6% (down by 17%).

Europe also needs to solve its supply constraints and challenges, and this refers to two structural policies: first, energy transition, starting with the revision of the too volatile pricing of electricity; second, better training and employability of the labour force. We cannot remain in many European countries including France with so severe labour shortages while still being above 7% unemployment. Page 3 sur 3 * As a conclusion, let me quote a famous Franco-Czech writer, Milan Kundera: “The novelist teaches the reader to comprehend the world as a question. […] In a world built on sacrosanct certainties the novel is dead”. For us central bankers, only one thing is certain, but it is key: we will do everything in our power to fulfil our price stability mandate. And like in good novels, we will bring it through many uncertainties to a successful end. Thank you for your attention. References i  François Villeroy de Galhau, Monetary Policy Post-Pandemic: Balancing between Science and Art, Predictability and Reactivity, Speech, 27 August 2022. ii In a letter to Frederick II, King of Prussia, on April 6, 1767. iii Blanchard, Panel discussion, presented at “Monetary Policy: A Journey from Theory to Practice. An ECB colloquium held in honor of Otmar Issing, March 2006.
Moreover, while there is no long-run trade-off between unemployment, or output, and inflation, both formal evidence and common sense observation on wage and price rigidities attest to the existence of such a trade-off in the short run. In the long run, however, monetary policy’s impact is only on inflation; potential output primarily is determined by advances in technology, growth in human and physical capital and other real resources. Because of the uncertainty about the timing and significance of short-term monetary policy effects on economic activity, as well as all other uncertainties concerning the economy, there are always differences of view about the speed with which policy should be adjusted, and on the balance of risks in dealing with ongoing economic developments. These conflicts become more marked when an economy confronts supply shocks that drive up prices BIS Review 17/1997  -3-  sharply and suddenly -- such as the two oil shocks of the 1970s. In those circumstances, from my perspective, the appropriate course, consistent with maintaining longer term price stability, should be to bring inflation down somewhat gradually, as the economy adjusts to the shift in relative prices. As I see it, monetary policy must be formulated cautiously, and cannot ignore business cycle developments. In establishing price stability as the primary goal of monetary policy, therefore, it is best to recognize that monetary policy does affect output in the short run.

We are witnessing the emergence of a fully-fledged and constantly evolving digital ecosystem. Faced with the competitive threat from innovative newcomers, traditional players can respond using different strategies: establishing partnerships, acquiring fintechs or competing for new markets and activities. 2. The second element is stability. Although banking and financial innovations can stimulate growth in the financial system and foster economic expansion, we know  BIS central bankers’ speeches  1  only too well that they can also be a source of instability, as evidenced by the subprime crisis. Digital innovations actually expose the financial system to new forms of risk. First of all, the digitalisation of financial services presents a new issue for central banks as they perform their task of ensuring safe financial transactions (payment, delivery and settlement). In particular, the significant growth of decentralised trading systems, driven for example by blockchain technology, could change the conditions in which central banks perform their duties. The transition to cyberspace has also left finance exposed to the increased threat of cybercrime. Lastly, the rise of digital innovation could also provide an opportunity for criminals to develop new methods of laundering money and financing terrorism. In this context, the new players in this digital era must also be fully subject to all anti-money laundering and counter-terrorist financing regulations. 3. The third element needed in order to reconcile innovation and stability and construct our “possible trinity” for digital finance is regulation.
This has partially been driven by the introduction of the risk margin under Solvency II but also by an increasingly competitive marketplace. Indeed, in feedback to the Discussion Paper (DP2/22)[4] we issued in April, firms generally told us they see the continued use of high levels of longevity reinsurance over the long-term as an inherent part of their new business strategy, even after substantial cuts to the risk margin. The PRA is therefore considering how well the resulting risks are managed and mitigated, including risks on recapture. A recapture event requires the insurer to reassume the transferred risk on reinsurer default or if  Page 4  legal conditions are breached[5]. Recapture thus necessitates taking control of any collateral assets and separately, putting aside sufficient capital to back the reassumed risk. Firms may argue that they could reinsure the risk to a different reinsurer but with a market dominated by a small number of counterparties whose financial position may be positively correlated, this assumption may be unrealistic. Beyond the risk to individual firms, there is the potential for systemic risk to arise where a large proportion of the UK insurance and pension[6] industry’s exposure to longevity risk is ceded to a small number of reinsurers. Funded reinsurance The second development in the annuities market is an emerging appetite for funded reinsurance. In its most extreme form, this is a fully funded transaction that involves the insurer paying a single, upfront premium which will be invested by the reinsurer to make the annuity payments.

The Matching Adjustment allows insurance companies to recognise as capital up-front a part of the income they expect to earn on their assets in the future, as long as they can show that the cashflows they expect to receive from those assets closely match the payments they have undertaken to make to their policyholders. 10. This would be the case if insurers were to agree to reinsurance contracts with collaterals such as asset backed securities and collateralised loan obligations, non-GBP illiquid assets and FX exposure. 11. McKinsey’s Private Markets Annual Review | McKinsey  , Exhibit 4. 12. As a reminder, firms must comply with the PRA’s Restriction of Business rules and ensure that it does not carry on any commercial business other than insurance business and activities directly arising from that business. 13. SS3/17 'Solvency II: Illiquid unrated assets' 14. Four Rs: Creating the conditions for long-term sustainable growth in the life annuity sector – speech by Charlotte Gerken 15. Solvency II | Eiopa 16. SS1/20 Solvency II: Prudent Person Principle  Annex
In addition, this strategy will not suffice to disentangle the financing of the economy from the status of its sovereign. For that, we need a pan-euro area safe asset. I have set out a number of reasons why a euro-based safe asset is desirable. Several operational proposals have been suggested in the literature.8 Most of them, such as the one for sovereign bond backed securities (SBBS),9 which have been subject to a thorough analysis by the European Systemic Risk Board, entail the creation of a synthetic bond backed by national sovereign bonds. This proposal emphasises that, through diversification, it will be possible to provide a senior tranche with lower risk than German debt. An alternative option is E-bonds,10 which would be single tranche bonds issued by the ESM or any euro area body with the capacity to issue bonds, backed by loans to all euro area sovereigns. I think we need further reflection on the properties of these proposals and the constraints and incentives involved. Let me point out three conditions that any of the proposals must fulfil in order to improve the current framework. First, they should have the potential to generate a sufficient amount of safe assets at the European level. They cannot simply involve a swap of one form of safety for another, as that would not solve the shortage of safe assets. Second, they should preserve liquidity in the markets for national sovereign securities. This would allow the market to price idiosyncratic risks correctly and help treasuries to meet own funding needs.

Inflation will reach its low point in the third quarter of 2015, at –1.2%. For the subsequent period, the new inflation forecast is slightly higher than in March due to the rise in oil prices. The short and medium-term forecast is up slightly, by 0.1 percentage points to –1.0% for 2015 and to –0.4% for 2016. The forecast continues to indicate that inflation will move back into positive territory at the beginning of 2017; there will be a slight slowdown in the rate of increase as the year progresses. The inflation forecast for 2017 is down by 0.1 percentage points, to 0.3%. The conditional forecast assumes that the three-month Libor will remain at –0.75% over the entire forecast horizon, and that the Swiss franc will weaken. Global economic outlook As our inflation forecast is heavily influenced by economic developments abroad, let me now present our assessment of the global economy. Global economic growth was weaker than expected in the first quarter of 2015, and this development had a detrimental impact on world trade. In the US, GDP declined slightly, partly due to special factors. Moreover, the strong US dollar weighed on exports. In the euro area, however, the economy continued to pick up, supported by persistent euro weakness and improved lending conditions. In contrast to the previous quarter, all of the large member states contributed to growth. Italy reported GDP growth for the first time since entering a multi-year recession. In Japan, too, the economy gained momentum.
Another window on the UK’s productivity gaps is provided, not by looking at the stock of human capital (such as in management or boards), but at the flow of these skills between companies as workers move jobs. So 38  Watts (2003), Haldane (2009), Ferguson (2018). 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  the theory goes, the larger those worker flows – so-called labour market “churn” – the greater ought to be the transfer of knowledge and skills and the faster the pace of technological diffusion. Chart 20 plots a measure of labour market churn in the UK, with the US as a point of comparison. Two points stand out. Labour market churn rates are systematically higher in the US than in the UK, by a factor of around 2. 39  This is likely to have contributed to slower rates of technological diffusion in the UK than US. It is also consistent with the UK’s significant productivity gap with the US. A second observation is that turnover in the UK labour market has been running well below its historic levels for much of the past decade. This probably reflects the impact of heightened job insecurity on people’s willingness to move firm in the aftermath of the crisis. One of the adverse side-effects has been a slowing in the flow of knowledge and ideas between firms, potentially gumming up the technology-transfer process.

2  BIS central bankers’ speeches  We are committed to jointly resolving any outstanding issues, if any, for the purpose of advancing Islamic finance activities in both countries. We hope significant deals could be initiated following today’s event to facilitate cross-border flow of funds between both countries and regions, with the Malaysian delegation ready to share their experiences and expertise in this area. For example, Malaysian players can partner with the UK players to structure a syndicated Islamic financing facility or joint lead-arrange a sukuk issuance for any of the identified UK regeneration projects. Both London and Kuala Lumpur can succeed and prosper as leading global financial centres in Islamic finance. We are open to challenges and new ideas and look forward to working together with TheCityUK through a strengthened partnership to achieve these objectives in the years to come. A UK-Malaysia Working Group may provide that strategic platform to holding continuous dialogues for this purpose. With this, I wish the Forum an engaging and fruitful discussion. Thank you  BIS central bankers’ speeches  3
13  -20  -10  0  Figure 3  Activity indicators  (index, December 2019=100, deseasonalized series)  110  Manufacturing output (1)  Retail sales (2)  110 110  110  100  100 100  100  90  90  90  90  80  80  80  80  70 12.19 Dec.19  70  03.20 Mar.20 China  70 06.20 12.19 Dec.19 U.S. Eurozone Japan  (1) Real series. (2) Nominal series. 03.20 Mar.20 U.K.  06.20 Jun.20  70  Sources: Bloomberg and Eurostat. Figure 4  GDP - selected economies  (quarterly change of deseasonalized series, percent)  20  First quarter  Second quarter  20  Comulative first half  Source: Bloomberg.

Our rules and treatment are fair to all genuine investors. Any incentives 1/6  BIS central bankers' speeches  granted to both foreign and domestic investors are subject to stringent performance requirements. This ensures adequate safeguards for the goals of the incentives and underscores our fair treatment to all. This would also create a relationship built on the principle of mutual reinforcement, beneficial to both Malaysia and its partners. A growing economy which parallel global development and growth. The Malaysian economy has always been very well run. It has bright growth prospects, in the immediate future and in the longer term. We have been one of the fastest growing economy in the last decade. Our economic growth has consistently outpaced global growth since the TransAtlantic Financial Crisis. Comparing average growth rates since then, Malaysia’s growth rate has been 170 basis points higher than the global economy, growing faster by 38% to be exact. In the region, we are among the fastest-growing middle-income economy. I am quite confident that this trend is set to continue as we move forward. In the first quarter of the year, Malaysia grew by 5.6%, surpassing market expectations. Growth has been lifted by the stronger domestic demand with additional impetus from exports. Our export performance is generating greater positive spillovers to the domestic economy. Judging by these, the economy is poised to register stronger growth in 2017. Many factors account for the sustained economic performance. A key reason is our economic diversification.
In this context, one possibility would be for the central bank to not only to determine the policy rate but also to determine the time-varying regulation, while the implementation of non-time variable regulation would be the responsibility of the supervisory authority. Does it make sense to merge the central bank with the supervisory agency? Obviously, the financial-stability analysis, and to some extent also the monetary-policy analysis, must be informed by the micro-prudential analysis, and vice versa. Countries have chosen different approaches to this, often based on country-specific characteristics such as legislation or even tradition. I am open and do not believe in a one-size-fits-all solution. The important aspects are that you ensure an open exchange of information and close cooperation between the functions, as well as adequate resources. On governance we must also take into account what is called “political economics”. The most efficient theoretical solution may not be achieved if it contradicts interests of power and influence. How should we structure the decision-making process in order to take account of the nexus between monetary policy and financial stability? Central banks have adopted different approaches: Some have a separate Board for monetary policy, others also have a separate Board for financial stability. Most central banks have the same Board for both, but may have separate Deputy Governors responsible for each of the two strands. What matters, as I see it, is that “the buck stops somewhere”.

Prasarn Trairatvorakul: Economic and financial cooperation between China and Thailand Opening remarks by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Luncheon to inaugurate the Bank of Thailand Beijing Representative Office, Beijing, 6 April 2012. *  *  *  Your Royal Highness (Princess Maha Chakri Sirindhorn), Your Excellencies, Distinguished Guests, Ladies and Gentlemen, The Bank of Thailand is humbly grateful to Your Royal Highness Princess Maha Chakri Sirindhorn for graciously presiding over this Luncheon to inaugurate the Bank of Thailand Beijing Representative Office. The Bank of Thailand is privileged and honoured to celebrate this auspicious occasion at the Residence of the Ambassador of Thailand here in Beijing among a group of honored guests who have been part of the long-standing Sino-Thai relations. Today’s event provides a unique opportunity to celebrate not only the present achievements, but also to pay tribute to history of the friendship between China and Thailand that has spanned over 700 glorious years since the Tang Dynasty and the Sukhothai Era. Our cooperation first began in the form of trade, which remains to this day the strongest tie between our two nations. Along with the flows of trade from China came the cultural heritage, which is why our cultural linkage is deeply rooted – in all aspects of the arts, culture and cuisine. Your Royal Highness, Ladies and Gentlemen, The long-standing relations between our two economies have provided a solid foundation that shaped our modern economic and financial relationships.