samchain/econo-pairs-v1 huggingface dataset:
This created a new norm for monetary policy. Sweden then became one of the first countries in the world to conduct monetary policy with a floating exchange rate and an explicit inflation target. The decision to word the monetary policy target in terms of a particular figure was made for several reasons. Perhaps the most important reason was to create an anchor that everyone would recognise and on which they could base their expectations. A clear target would also make it easier to evaluate the Riksbank’s operations and to hold it accountable. As I said, this is particularly important as the Riksbank has such a high degree of independence. In 1999 the target of low and stable inflation was written into the Sveriges Riksbank Act. In connection with this, the Riksbank was also given greater independence, for instance, in that decisions on the repo rate would be taken by an Executive Board consisting of six members. Interest rate decisions were previously made by the Governing Board, whose successor, the General Council, now has the main task of appointing the members of the Executive Board. The six members of the Executive Board are also forbidden by law to seek or take instructions when making monetary policy decisions. The legislation is largely in line with the applicable legislation in other parts of the EU. These changes have contributed to further strengthening our credibility.

BIS Review 62/2007  5  Changes for more efficient communication Ever since the inflation target was introduced, openness and clarity have been guiding principles for us. We have gradually implemented changes to become more transparent and more efficient in our communication. In February we presented for the first time our own forecast of the development of the policy rate over the coming years, something that our colleagues in Norway and New Zealand have also done. And as I mentioned earlier – a central bank can hardly be much more open and clear with regard to its monetary policy intentions. This increases the opportunities for evaluation and accountability. It has also become easier for us to explain our decisions and forecasts and to outline alternative scenarios for the interest rate. We are better able to live up to the requirements made in our interaction with the general public and the financial markets. There are also other examples of measures taken to increase our openness. Here I am thinking about the publication of minutes from the monetary policy meetings, our monetary policy reports, the many speeches held by Executive Board members every year and the hearings of the Governor by the Riksdag Committee on Finance. Clarity, not just openness – quality, not just quantity But efficient communication is not merely about quantity, it also concerns quality. Publishing a lot of information and doing so very often does not necessarily make the message clearer and the communication more efficient. It is not enough to merely be open.
Data and news that transcends boundaries in real time are important for not only investors and financial institutions but also for researchers and scholars in Islamic finance. It will contribute towards enhancing competitiveness, product innovation and strengthen the international financial inter-linkages. As we enter this new decade, the challenge for the world is to sustain the economic recovery. While there continues to be many problems still to be addressed in the developed world, most emerging economies have continued to do well. In Malaysia, our economy recorded a strong growth of 7.2% in 2010 driven by strong domestic demand and our stronger economic and financial linkages with other emerging economies. An important part of this recovery is the strong recovery in private investment as capacity utilisation increases and as the dynamic nature of our economy presents new investment opportunities in new growth areas. For the Islamic finance industry, the year 2011 is set to be an exciting period. The global sukuk issuance in the year 2010 surpassed that of the previous year by more than 20 per cent. Against this positive growth, renewed confidence of investors and issuers is evident. In 2011, the sukuk issuance is projected to surpass the level recorded in 2007 when it sustained the highest level of issuances. The year 2010 also saw Malaysia’s evolution as a multi-currency sukuk origination platform with four foreign currency sukuk issuances amounting to about USD3 billlion.

As the Islamic financial community significantly grows in size, it is congruent that this enhanced Islamic finance platform being launched today has widened its outreach to the subscribers globally and from contributors of data and information from institutions around the world. To support this new enhanced Islamic finance platform, Bank Negara Malaysia and the other community members under the MIFC initiative is pleased to be one of the contributors. The MIFC page in the enhanced platform provides insights on Shariah, MIFC business opportunities and key developments. It also hosts the extensive network of Islamic financial community in Malaysia. On this note, I wish to congratulate Bloomberg, AIBIM, Bursa Malaysia and the many teams that worked on this initiative to serve the Islamic financial industry. 2  BIS central bankers’ speeches
Personally, I think the decision was a reasonable balance as it means that inflation will attain the target in around two years’ time, while we take into consideration the risks linked to the high level of household debt. One important issue that I would like to discuss in greater depth today is how monetary policy takes into account household debt and what important role the emerging macroprudential policy can play. Macroprudential policy is more suitable than monetary policy for managing financial imbalances, such as a high build-up of debt in the household sector, and it is therefore essential that it is implemented as soon as possible. Well-balanced monetary policy in July At the most recent monetary policy meeting in July we noted that growth would be weaker than normal this year, both in Sweden and abroad. However, developments in the Swedish economy were divided. At the same time as the household sector looked strong and consumption was growing, companies were being affected by the weak demand abroad, which was leading to lower export and investment. Moreover, the inflation rate was still low. But our assessment at the meeting was that there were signs that the recovery in Sweden and abroad was gradually strengthening. Uneven but gradually strengthening recovery abroad Economic prospects have for some time now looked different in different parts of the world, but on the whole our assessment in July was that economic activity would gradually improve in the coming period.

Mixed signals from the rest of the world... New US statistics indicate continued strength in the US economy. Preliminary figures show that GDP increased in the second quarter by 1.7 per cent, calculated as an annual rate, compared with the first quarter of this year, which is in line with the assessment we made in July. At the same time as the new outcomes were published, the statistics authority released revised GDP figures for previous periods. These show that GDP growth has been slightly higher since 2007, and that the fall in GDP during the financial crisis was thus not as large as indicated by earlier statistics. In the United Kingdom, GDP was slightly better than expected during the second quarter. The indicators for July also point to a gradual recovery in the British economy. However, in Japan, which showed positive signals at the start of the year, newly-received statistics over the summer have not been as clear. GDP growth slowed down during the second quarter and the recovery in both the household and corporate sectors appears to have been dampened slightly further at the start of the third quarter. At the same time, data shows that emerging markets are slowing down somewhat. In China, preliminary figures for the second quarter show that GDP increased by 7.5 per cent as an annual percentage change, which was a slowdown compared with the previous quarter. Indicators for the other BRIC countries, that is, Brazil, Russia and India, show some slowdown.
Unemployment had fallen since 2009 and we expected it to continue to fall over the coming years as economic activity recovers (see Figure 6). CPI inflation was over 3 per cent prior to the summer. However, CPIF inflation, which excludes the effects of interest rate adjustments on housing costs, was just below 2 per cent and even lower if energy prices are excluded. Our assessment was that underlying inflationary pressures would gradually rise as economic activity strengthens (see Figure 7). Interest rate increases necessary to attain the inflation target Against this background, we raised the repo rate in July from 1.75 to 2 per cent. We also considered that the repo rate increases would need to continue in the coming period. This was to stabilise inflation around the target of 2 per cent and resource utilisation around a normal level. The forecast for the repo rate, the repo rate path, which includes two further interest rate increases in autumn 2011, was therefore held unchanged. As usual, we pointed out that there was considerable uncertainty in the assessment of the future repo rate and that we would need to reconsider the monetary policy stance if conditions were to change significantly (see Figure 8).

Mr. Bäckström discusses monetary policy and unemployment in Sweden Speech by the Governor of the Bank of Sweden, Mr. Urban Bäckström, before the Swedish Economics Association on 6/3/97. First a word of thanks for the invitation to this evening’s discussion. This is the third year in succession that your Association’s agenda has featured monetary policy. My first introductory talk, in 1995, was about the importance of low inflation and the background to and implications of focusing on price stability. Last year I took up matters to do with monetary policy’s construction and effects, as well as the considerations behind the monetary policy decisions in recent years. This evening I shall be elaborating on those discussions and then deal with monetary policy in the context of Sweden’s high unemployment. Economic developments in Sweden Following the deep recession in the Swedish economy in the early 1990s, we are now in the fourth year of economic expansion. Since 1994 production’s annual growth rate has averaged 2.8 per cent, which is considerably above the trend to which we have been accustomed in recent decades. In 1994 and 1995 the GDP growth rate averaged as much as 3.5 per cent. This increase was concentrated on the internationally oriented sector and industrial activity registered the fastest upswing in a long time. This led to capacity problems despite relatively high investment growth. The strong expansion was therefore not sustainable. Moreover, the credibility of economic policy was impaired by weak central government finance and an unfavourable history of inflation.
On balance I read these labour market indicators as pointing to a further normalisation of the labour market and broadly consistent with our expectations last summer for a modest decline in slack. What could these developments mean for domestic cost pressures? 12  BIS central bankers’ speeches  Domestic cost pressures As the economy continues to expand and slack diminishes, the resulting pressure on resources would be expected to bid up wages.15 Recently, despite falling unemployment and the MPC’s expectations in the summer, wage growth has moderated from rates around 3¼ % to around 2 ½ % (Chart 12). This could reflect a range of influences, some of which are more relevant to the overall inflation outlook than others. For example, in the past year, there is likely to have been some dampening effect on measured wage growth owing to changes in the composition of the workforce with more younger, less experienced workers entering employment.16 In addition, when measured on an hourly basis, the moderation in wage growth has been less marked, consistent with the fall back in average hours being a normalisation of working patterns. Nonetheless, the slowdown in wage growth gives pause to the inference that the labour market is as tight as would be suggested by the drop in unemployment alone.

18  Productivity measured in heads (i.e. output per worker) is relevant in computing unit cost growth using wage or labour compensation measures also expressed in per head terms. 19  The Minutes of the MPC meeting held on 13th January 2016 noted that “In the year to 2015 Q3, a measure of total unit labour costs based on the MPC’s backcast estimate of GDP had grown by 1.6%. Growth of unit wage costs had been somewhat stronger over the same period, at 2.3%, though both rates were likely to have eased back slightly in the fourth quarter of last year.”  20  Analysis by Bank staff suggests that a simple principal component (PC) measure of core inflation – which summarises the broad trends contained in a large set of measures – is a better predictor of subsequent headline inflation than is current headline inflation. In other words, gaps between core inflation and headline inflation tend, on average, to be resolved by total inflation moving back towards core inflation (rather than vice versa). However, although smaller, the root mean square error from core inflation-based forecasts for future inflation does not seem statistically significantly smaller than forecasts using current headline inflation. Additionally, the summary PC measure of core inflation forecasts headline inflation 1-year ahead more accurately than a simple assumption of 2%, such that core inflation provides useful information for near-term inflation trends.
It is equally important that further progress be achieved in the area of fiscal policy reform, with continuing progress in fiscal consolidation through limits in public spending growth, allowing both a reduction in remaining budget deficits and an alleviation of the fiscal burden on corporations and households without threatening or slowing the progress in fiscal consolidation. Overall, the existence of the euro and the single monetary policy has provided the euro area with an institutional setting which leaves it significantly less exposed to external influences. Within the euro area the maintenance of price stability over the medium term, together with further progress on structural reforms, will provide an important contribution to the achievement of sustained noninflationary economic growth and will thereby also support a further solid and sustainable expansion of the world economy. Let me now give the floor to the Vice-President, who will inform you about other issues decided by the Governing Council. The Governing Council has adopted a set of standards, recently endorsed by the G10 Governors, as the minimum standards of the Eurosystem's common oversight policy on payment systems. The Eurosystem will assess all systemically important payment systems in the euro area against these "Core Principles" and will make the results of its assessments available to the public. Concerning issues relating to euro banknotes and coins, I should also like to provide you with the following information. First, the Governing Council adopted an ECB Guideline on the 2002 cash changeover.

First, the authorities must become better at gathering and analysing information about conditions in the financial sector and the rest of the world in order to be able to better assess the risks of future crises in the financial system. One of the problems has been that the risks have developed during periods when the financial sector has appeared to be in excellent health, at least on the surface. This points to the importance of two things: We need a more transparent financial sector and we need ongoing research and development work to produce indicators that are better at revealing that systemic risks are developing, as well as other types of analytical tools. However, this is not only about discovering and understanding the risks, it is also about counteracting the development of the risks in a more concrete way. This is why we also need effective corrective tools that enable the authorities to better influence risk behaviour in the financial sector and thus reduce the risk of crises in the future. This includes, for instance, finding ways to ensure that the assessments of the authorities have a sufficient impact on the risk behaviour of the financial players. Apart from effective communication, we also need to think about whether we have the "teeth" needed to put sufficient pressure on the players to make them change their behaviour. For example, the possibility to im-pose an extra capital adequacy requirement on particularly large and complex (and therefore systemically-important) banks has been discussed.
The new frameworks should be guided by the FSB’s new international standard for resolution regimes, as endorsed by G20 Leaders at their Cannes Summit of 4 November 2011.5 This standard could mean a substantial improvement, since it not only contains a broad arsenal of effective resolution tools, but also provisions to facilitate cooperation among national authorities. Nonetheless, in my view, a greater centralization of crisis management and resolution responsibilities for cross-border SIFIs would also be needed, with a strong coordinating role for the home authority. In this regard, I would very much welcome a move towards an EU-level resolution authority, the same way as our supervisory system moved already partly from national to the EU level. 3. A bird’s eye view: the size and role of the financial sector  With this quick résumé of where we stand in overhauling financial regulation in mind, let me turn to the more general question what role the financial sector is playing in our economies at large. A major German newspaper recently published a poll that had asked respondents to name those five professions for which they have the highest respect.6 The results of the survey found the respect for “Bankers and bank employees” ranking at the bottom. Even the profession of “Politicians” was considered more – albeit marginally – respectable. Only “TV moderators” fared inferiorly to bankers. Such a derogatory view of the financial industry is not a new phenomenon, though.

Detailed recommendations on the regulatory treatment of shadow banking are expected to be prepared only by 2012. In the EU, work on shadow banking, however is at a relatively early stage, currently focussing on a stocktaking of existing regulations and conducting a data sharing exercise. Finally, let me also mention that the development of effective bank resolution regimes, which has been on the top of the global and EU regulatory agendas, is also a key element of a successful policy response to the recent crisis. There is now a broad consensus that all distressed institutions, particularly systemic ones, should be dealt with by authorities in a way which safeguards the stability of the financial system as a whole and minimises public costs and economic disruption. In the US several banks were allowed to fail in an orderly manner in the recent years, which could provide an example for other countries as well concerning the set-up of an efficient resolution regime in a national context. However, it has to be acknowledged that most of these banks in the US were rather small compared to average European bank sizes and they were almost exclusively national based with no or very little cross-border operation. Therefore, substantial challenges remain for authorities around the globe to establish effective cross-border resolutions schemes, in particular for global systematically important banks.
To understand the most recent interest rate decisions, it is important to remember that we do not adjust the repo rate to affect the present inflation rate, but to influence inflation a couple of years ahead. It takes time for monetary policy to achieve its full impact on the economy. Monetary policy must therefore be based on expectations of the future, i.e. we are dependent on forecasts. It is therefore necessary that we occasionally ”lean against the wind”, that is, that we raise the repo rate despite the current inflation rate being below target level or that we lower the repo rate despite inflation being above the target level. If we were only to look at the present inflation rate, there is a risk that we would be forced to make more drastic adjustments further ahead and this type of roller-coaster interest policy would benefit no one. How do we assess future inflation prospects? The economic outlook is currently bright, both in Sweden and abroad. International growth has been both high and stable in recent years (diagram 1). Strong growth in the United States and parts of Asia has been a driving force for global economic activity. Increased participation in global trade by, among others, several Asian countries has contributed to this upswing and to stiffer international competition. So far, the increase in global  BIS Review 12/2006  1  demand has not had a visible impact on consumer prices.

For instance, the economy could suffer a major supply shock that led to prices of commodities, energy and foods rising or falling substantially. In these situations it might be reasonable to accept a longer deviation from the target than two years if the strain on the real economy would otherwise be unacceptably high. Let me summarise: The Riksbank has one objective for monetary policy and that is to maintain price stability. The Riksbank's method of working encompasses possibilities within this framework to take into account different aspects of interest rate decisions, such as fluctuations in the real economy. However, such considerations do not mean that we have specific targets for other quantities than inflation. A look back - inflation 2005 Finally, I intend to take a look back at developments in inflation over the past year. This is to follow the usual custom at the first hearing of the year and give an account of the outcome of the monetary policy conducted. As you know, inflation was low last year (diagram 6). For the second year in a row, the inflation rate was below the Riksbank's tolerance interval for inflation. UND1X inflation was 0.8 per cent and CPI was 0.5 per cent on average for the year. The forecasts of inflation made by the Riksbank in 2003 and 2004 anticipated that inflation would be much higher than that in 2005. Why was inflation surprisingly low? To begin with, one can observe that it was not due to a weak economic upturn.