samchain/econo-pairs-v1 huggingface dataset:
As the cycle, or perhaps I should say if the cycle, becomes synchronized all over the world, the need for independent monetary policies may fade away. Gradually, the number of currencies in the world will decrease through time. This is not economic fiction: a tendency in this direction is already present among smaller countries in Latin America with large trade and investment relationships with the United States. However, a world tendency to a significant decrease in the number of currencies is probably a very long run one, where Keynes’ dictum on the long run comes to mind. In any case, I am convinced that, 5 as Rogoff argues in a recent paper , it may not be desirable to pursue currency consolidation all the way. Meanwhile, in the short and medium run, the increase in productivity provides more room for monetary policy to maneuver. Productivity growth alleviate inflationary pressures providing more room for monetary policy to exert its short run influence on the real economy. 5. Flexibility  The key word for an emerging economy in a changing world is flexibility: in exchange rates and interest rates, to accommodate shocks without concentrating their effects in one particular market; in factor markets, both labor and capital, to minimize the cost of transition from one state of the economy to another. The task before us, in an emerging economy like Chile, is to increase flexibility in all markets.

Increasingly, money services business provides and support tourism, business travel and cross-border trade activities in a more globalised world economy. According to a World Bank report, it is estimated that nearly 1 out of 7 persons is a migrant, reflecting the large and diverse diaspora community in the world today. Worker remittances to developing countries were in excess of USD400 billion last year and represent a key source of external resource flows. These flows support economic growth in developing countries, far exceeding official development assistance. More than USD 1 trillion was spent on global business travel expenditure in 2013 and more than 1 billion in international tourist arrivals are recorded each year. In 2013, business activities supported world trade volume of over USD 23 trillion. All of these developments have created new and greater demand for remittance, currency exchange and other financial services that can be offered by money services businesses. The industry itself has also become more diverse. Advancements in technology have enabled new business models, offering new product and service, innovations and forming of new alliances. These enhancements have the potential to further lower cost and increase convenience to consumers. Global money services companies exist alongside niche and smaller companies that focus on serving local communities. This has fostered competition and helped to fill market gaps. Today, money services are provided through a network of branches and agents of money services entities, retail outlets, post offices, banks and mobile channels. Operational standards are also diverse across entities.
When the economy is exposed to shocks, the central bank can respond rapidly by adjusting the key policy rate, as we did in 2008 and when oil prices fell in 2014. A flexible inflation targeting regime can reduce the risk of unemployment becoming entrenched at a high level following economic contractions. Nevertheless, monetary policy cannot assume primary responsibility for high output and employment. The level of output and employment over time depends on overall economic policy, including the tax and social security system, the wage formation process and the functioning of the labour market. Monetary policy is only one component of such an overall framework. 2/4  BIS central bankers' speeches  The importance of financial markets and financial stability was underestimated before the crisis – also by central banks. The financial crisis revealed how harmful financial imbalances can be. Monetary policy can in given situations take account of the risk of a build-up of financial imbalances. But monetary policy cannot take primary responsibility for heading off a gathering storm. Regulation and supervision of financial institutions are the primary means of addressing shocks to the financial system. The build-up of financial imbalances has in recent years been given little weight in monetary policy among the major central banks. Their focus has been on counteracting a deeper and more prolonged downturn and on preventing deflation. In countries that were less affected by the financial crisis, more attention has been devoted to financial stability considerations. In high-tech, global financial markets, capital moves rapidly between different currencies.

The paper by Professor Nobuhiro Kiyotaki from Princeton University along with his coauthor Mark Gertler builds a model whose aim is precisely to build such a model that can serve economists to describe the interactions between developments in financial markets and the rest of the economy. The framework proposed by Kiyotaki and Gertler is also used by them to estimate the likely effects that the set of actions undertaken by policy makers that have come to be known as unconventional monetary policy. Understanding the effect of these non traditional tools is surely an important issue and helps us to design better policies. The study of unconventional monetary policies is also the subject of the paper by Javier García-Cicco who analyses this issue estimating a model for the case of Chile. As you are well aware, the prominence of unconventional monetary policies during the 2008–2009 crises was due to the fact that the interest rate that most central banks use as its main instrument were aggressively reduced towards levels very close to their effective lower bounds. The paper by Martin Bodenstein and his coauthors from the Federal Reserve studies how an economy reacts to foreign shocks when the interest rate is at its lower bound. This question is of particular interest to a country like Chile which is subject to frequent changes in the international scenario.
Owing to the crucial importance of this matter, and given the responsibility of the Eurosystem as a whole in achieving a smooth cash changeover, a legal framework has been established. The Guideline will enable all those involved to become familiar with the basic rules to be followed in preparing for the introduction of the euro banknotes and coins. This ECB Guideline will be published today on the ECB's website and shortly in the Official Journal of the European Communities. Second, yesterday evening the members of the Governing Council were given a presentation by Publicis, the communication agency selected to assist in conducting the Eurosystem's Euro 2002 Information Campaign, on the current status of the campaign. This focused in particular on the creative concept of the mass media campaign, which will start in September 2001. A website dedicated to the Euro 2002 Information Campaign has now been launched in all 11 official languages of the European Community (www.euro.ecb.int). The website currently contains a section on the euro banknotes and coins. Further sections will be added over the next two weeks to help specialist groups and the general public to prepare for the introduction of the euro banknotes and coins. These sections will be updated throughout the year. We are now at your disposal for questions. 2  BIS Review 8/2001

Simultaneously, it is necessary to assess the systemic risk in both, the financial system and the banking one, by constructing special indices and implementing best practices in stress-testing. In terms of completing the framework on management of emergency financial situations, importance should be given to the legal and regulatory reviewing and improvement process, the cooperation between public authorities and timely identification of various problems, particularly in systemically important institutions. The Bank of Albania has already entered in this reviewing and improvement process of the regulatory framework, on the basis of several pre-set objectives. Concluding, I would like to emphasize that the countries in our region have successfully overcome a difficult period as a consequence of the international financial crisis. However, there are numerous challenges ahead. They require an ongoing commitment of all the factors of the country’s economic and political life. The need for coordinating the actions both locally and regionally is an absolute priority. I think there are in place all the prerogatives for making this cooperation effective, honest and of mutual benefits to each country in the region. To this end, I think that the European Fund for Southeast Europe will continue to play an important role, which once again I take this opportunity to congratulate for the work it has done and the commitments it has taken for the future. Thank you! BIS central bankers’ speeches  3
It has probably contributed more to financial crises, and associated output and job losses, than any other area of industry, outside of banking. This is all sobering context. Cycles of the future That naturally begs the question of what can be done to avert a next time? And what role, if any, the Forum might play? I think there are some positive developments to report. These hold out the prospect – no more than that – that next time could be different. But to be successful, these measures will need both industry and regulators to act decisively and in concert. Let’s start with industry. It is clear to me from the Forum’s deliberations that the industry itself understands the need for change. That was brought home when a group of Forum members came together earlier this year, under the chairmanship of Nick Scarles, to produce “A Vision for Real Estate Finance in the UK”. This was published in October. The recommendations in this report make eminent sense. For example, they include proposals to improve loan-level commercial real estate data. This would improve monitoring of aggregate exposures to the sector and modelling of real estate risk. The recommendation that caught my eye related to valuation. Valuation lies at the heart of the pro-cyclical spirals we have seen historically in the commercial property market. Peaky valuations can give the appearance of a safety margin for lenders, causing them to loosen their grip on credit conditions, thus driving valuations higher still. Chart 2 illustrates this spiral in the UK.

As importantly, however, the FPC also set out its stall on what other  BIS central bankers’ speeches  3  macro-prudential measures could be taken to slow the accumulation of credit and debt, if these at some point put the financial system or economy at risk. While this combination of measures may have appeared modest, they represent a big philosophical shift from the past and an important signal for the future. Regulators, certainly here in the UK, have clearly signposted they are no longer willing to turn a blind eye to pro-cyclical swings in property, or any other sector, which risk tripping up the economy. We can no more eliminate the credit cycle than we can the business cycle. But can we do better than watch on in horror, mop in hand? We can and we must. The virtue of having this second set of instruments is well illustrated in the current environment. Macro-prudential measures can help guard against the financial stability risks otherwise associated with extra-ordinarily loose monetary policy. In the UK, the FPC can help support monetary policy in its task of driving forward recovery in the economy, by avoiding the MPC having to look over their shoulders for fast-approaching financial stability risks. In situations like these, two arms – monetary and macro-prudential policy – are surely better than one in securing macro-economic and financial stability. And having both arms attached to a single body, as here in the UK, can in turn help achieve greater coordination between monetary and macro-prudential policies.
Their solutions, however, undermine the liberal market democratic system that has brought about prosperity. The appropriate solution to many of our problems consists of returning power from the state to the community. Communities should be able to develop policies to address their own needs. This makes them less receptive to populist solutions. Raghu’s view reminds me of the political system in Switzerland. Here, political decisions are taken at the lowest possible level of governance, closest to the people concerned. This decentralisation fosters citizens’ engagement in their communities. Today, Raghu will speak about an issue that is more narrow in scope, but which is of great importance to central banks, not least to the Swiss National Bank. His speech is about the spillovers of monetary policy beyond a country’s border. This topic has attracted a lot of attention in the past few years following QE and other unconventional monetary policy measures adopted by central banks. Who better to speak to us on this subject than Raghu with his profound knowledge of capital markets and his experience as the central bank governor of a country highly exposed to monetary policy decisions taken elsewhere? Ladies and gentlemen, please join me in welcoming Raghuram Rajan with a big round of applause. Page 4/4

I therefore wish to implore Bank of China to continue playing an effective role and stimulate economic activity by providing well structured financial products and services, especially those aimed at boosting growth in key sectors such as mining, energy, tourism, manufacturing and agriculture. However, in order to achieve this, there is need for Bank of China and other commercial banks to do more in terms of reducing lending interest rates and influence the safe expansion of private sector credit and at the same time contribute to the reduction of the cost of doing business in Zambia. The current environment of relatively low inflation and stable exchange rate offer a good opportunity for lowering commercial banks’ lending interest rates. Ladies and Gentlemen, let me conclude by further challenging Bank of China (Zambia) Limited to expand beyond one branch and broaden its customer base and operations swiftly in order to consolidate the gains that have been achieved over the last 10 years. I thank you. 2  BIS Review 36/2007
Of course, the dialogue cannot be open-ended: at some point we will have to draw our conclusions and make our assessment. But those of you in IRB banks can expect us to show a different level of engagement, and a greater intensity of interest in, your risk management systems than we have previously shown. 2/5  Pillar 2 As I mentioned earlier, much of the focus on Basel II has been on IRB, and thus on Pillar 1. Now, credit risk remains, of course, one of the most fundamental risks in banking. However, we in the HKMA determined at an early stage in the Basel II process that it would be desirable to broaden the focus so as to bring into the equation the various "Pillar 2 risks." The case for this is, in our view, self-evident, as risks such as concentration risk, interest rate risk in the banking book, and liquidity funding risk can be every bit as devastating for the financial health of a bank as credit risk can be. In the run-up to final agreement on Basel II, therefore, we issued a series of guidance notes to give encouragement to AIs to upgrade their ability to manage these risks appropriately. We knew that for the coming few years AIs and their risk management specialists were likely to be preoccupied with Pillar 1 and thus we wanted to make sure that these "Pillar 2 risks" were adequately addressed as a priority, and not as an afterthought.

The risk management role of helping identify, evaluate, monitor, manage and control or mitigate these risks has become a crucial role in modern-day banking. Indeed, it is probably not exaggerating the importance of this to say that the quality of a bank's risk management has become one of the key determinants of a success of a bank. Basel II recognises the importance of these risks - and of the quality of risk management - by means of what is known as "Pillar 2". Under Pillar 2, there is an assessment firstly of all the risks a bank is running and, secondly, of its ability to manage these risks. This can lead to the bank being required to hold more capital to cover these risks, or to make improvements in its risk management. Pillar 2 therefore encourages banks to improve risk management, and gives capital incentives to do so. 1/5  I will say some more about this later on, but it is probably time at this point that I said a little about how Hong Kong is implementing Basel II. Hong Kong implementation We took a strategic decision early on in the Basel II process that Hong Kong should implement Basel II in accordance with the timetable recommended by the Basel Committee of Banking Supervision for its own members. This means adoption of most of the approaches under the new framework from the start of 2007, and the more advanced approaches from the start of 2008.
Second, persistency has declined since the inflation target was introduced. One possible explanation is that monetary policy has gained greater credibility. There is more confidence than previously that monetary policy endeavours to bring inflation back to the target following shocks. Another possible explanation is that, since the mid-1990s, the shocks have been less extensive than previously, partly because wage formation has functioned better than before. A conceivable conclusion from a monetary policy point of view is that it can nevertheless be risky to underestimate persistency. This is because the costs of bringing inflation down are high once it has been allowed to overshoot the target. It is therefore better to assume a too high rather than a too low level of persistency. Thoughts ahead of collective bargaining in 2010 I would now like to make some personal observations on a matter that may be important ahead of the next major round of collective bargaining in 2010 regarding which sector should set the norm for wage increases. My view is that the sector that is exposed to international competition should also set the norm for wage development in collective bargaining in 2010. There has recently been a lot of discussion about the current wage formation system.2 One question has been whether the system with the manufacturing industry as the sole norm setter is the most appropriate and sustainable option given that we now have a floating exchange rate instead of a fixed exchange rate.

Our assessment now is that hourly wages will increase on average by 3.7 per cent per year during the three-year period 20072009 measured using the National Mediation Office's method for presenting statistics, and by three tenths more using the method for presenting wage developments in the National Accounts. This is around half a percentage point per year more than during the previous three-year agreement period. … and a weaker development of productivity will lead to higher cost increases Labour costs per produced unit have, however, increased considerably more than we expected in the spring of 2007 as the development of productivity has been much weaker than we predicted at that time. In February 2007, we predicted that unit labour costs would increase by 2.3 per cent per year during the period 2007-2009. We now calculate that unit labour costs will increase by an average of 3.8 per cent per year in 2007-2009 compared to the figure of practically zero per cent per year in 2004-2006 (see Figure 5). This means that many companies are now faced with the choice of either increasing their prices to counteract the decline in profitability, which may be difficult in the present situation with a steady decline in demand, or of making staff cuts. Our assessment is that the companies will probably choose the latter. Price increases will be moderate while employment will decrease significantly. In the three preceding agreement periods, the high rate of increase in productivity helped to keep unit labour costs down.
Since then, the process of European integration has continued to develop. Throughout this process national policymakers, economic actors and the general public have each had to undergo a learning process whereby the previous, narrowly defined, national perspectives have been replaced by an increasingly European vision. This was and is not always easy. Today, the European Union stands for a highly integrated single market with about 380 million people, which combines the economies of 15 European countries and accounts, like the United States, for around 20% of world GDP. Moreover, it stands for a Monetary Union with a common currency, the euro, which, at present, has been introduced by 11 countries. Finally, the European Union, even though it lacks international personality, is characterised by a substantial and growing degree of political cooperation and coordination. This applies to justice and home affairs as well as to foreign and security policies. 1  BIS Review 4/2000  *** The dynamics of the integration process and, with it, the increasingly European outlook of both politicians and citizens was essential for creating an environment in which Europe’s leaders could take the bold decision to adopt a single European currency. But there were also a number of more specific factors that facilitated this decision, some of which I should briefly mention. The first of these was the signing of the Single European Act, in 1986, which committed the then European Community of 12 to adopt the measures necessary to complete the “single market project” by the end of 1992.

The outlook for price stability is also favourable, although inflation is expected to rise somewhat in the near future. This is mainly a result of the recent strong increase in energy prices. The fact that regional discrepancies in price increases amounted to up to 2 percentage points does not, by any means, conflict with this assessment. This phenomenon, which is almost typical for large-sized monetary areas and is also to be found in the United States, can reasonably be explained. *** So far, I have limited myself to considering the internal aspects of EMU, but the introduction of the euro also has implications that extend far beyond the boundaries of the European Union. As the currency of an economic area with a population of nearly 300 million people and one sixth of the world’s gross domestic product (GDP), the euro is already the second most widely used currency in the world after the US dollar. Moreover, as investor confidence grows and as more EU Member States join the euro area, in particular following EU enlargement, the euro’s role as an international currency is destined to gain in importance. This is not to say that the Eurosystem will actively promote an international role for the euro, or that there is a policy of trying to supplant the US dollar as the world’s leading currency.