samchain/econo-pairs-v1 huggingface dataset:
on a country level or on a specific industry level, in every case when the risks seem significant). When necessary, it will give recommendations for action to deal with the risks and it will monitor the compliance with the given recommendations. ESFS will maintain the dialog with ESRB and it will deliver the recommendations to the national supervisors, who will adhere to the principle “act or explain”. BIS Review 90/2010  3  II. After the crisis there is a strong consensus concerning the weaknesses of the prudential policy and the imperative for its fundamental improvement. Nobody disputes the fact that the prudential policy should be characterized by two dimensions: the microprudential, designed to limit the instability of the individual banks; and macro-prudential, designed to limit the risk of the financial stability as a whole, meaning, to limit the so-called systemic risk. The macro-prudential dimension becomes increasingly important. The Bank for International Settlements defines the macro-prudential policy as “the use of prudential tools with the explicit objective of promoting the stability of the financial system as a whole, not necessarily of the individual institutions within it”. (BIS Quarterly review, Мarch 2010) “The objective of macro-prudential policy is to reduce systemic risk by explicitly addressing the interlinkages between, and common exposures of, all financial institutions, and the procyclicality of the financial system.

In December last year we held a Stakeholders Workshop at which the drafts of the Revised Companies Act, the Securities Bill, the Bankruptcy Bill and the Collective Investment Schemes Bill were tabled for discussion by all stakeholders. These pieces of legislation are now being finalized and would be presented to the next Parliament for enactment. The Other Financial Services Amendment Act 2007 will serve to provide the legal basis for the operation of the stock exchange until the enactment of these legislations. We have also invested in training of personnel to guarantee the professional conduct of operations, and in this regard, we have collaborated with relevant institutions and professional bodies to make sure that the codes and practices underlying the operations of the market meet established standards. Today, as we inaugurate the Sierra Leone Stock Exchange we note with pride and confidence that we have achieved a significant milestone in the development of our financial system. In the coming weeks we will commence actual operations. In this regard, I wish to solicit the support and cooperation of all institutions and the general public to work towards the success of this venture. In closing, I wish to thank all those who have helped us in getting to where we are today, and seek your continued assistance as we traverse this very difficult terrain.
Macroeconomic developments started to turn more positive in the second half of 2013 and in 2014, and accelerated in 2015, although only up to a modest rate of 1.5 %, supported by an expansionary monetary policy, reforms of the institutional framework of the EMU, reduced financial stress, and, more recently, lower oil prices. The first weeks of 2016 came with a significant deterioration of global financial indicators, like stock market valuations or debt spreads. In the case of the euro area, aggregate financial conditions fell back to their prevailing levels of one year before, just when the ECB had announced an expansion of its already very ambitious QE program. Preliminary GDP data for first quarter 2016 Q1 posted a higher number (+0.5 % compared with +0,3 % in the last two quarters of 2015). Uncertainty and a weak global economy keep the balance of risks to the downside, posing important challenges for policy makers that require the contribution of all areas of economic policy at both the national and the euro levels. Challenges and the way forward in the euro area In the current circumstances, synergies among economic policies should be better exploited with a view to maximizing the stimulus to aggregate demand and to accelerate the recovery. There has been progress on structural reforms in recent years, particularly in those countries most affected by the crisis.

Michael C Bonello: The Maltese lira Interview with Mr Michael C Bonello, Governor of the Central Bank of Malta, by The Malta Business Weekly, 9 December 2004. *  *  *  I must first of all point out that decisions regarding the external value of the Maltese lira can only be taken by the Minister of Finance on the recommendation of the Central Bank of Malta and with the consent of the Prime Minister. Decisions on such a complex, technical issue can have far-reaching economic and social implications and are understandably not taken lightly. They must, for that same reason, be made on the basis of facts not supposition. Having said that, I must make it equally clear that at this point in time the Bank cannot responsibly make a recommendation in this sense for the simple reason that it has no conclusive evidence that such a change is warranted, still less that it would deliver the expected benefits. Nor is the Bank aware that anybody else has made a credible case for changing the value of the currency. The conclusions of the Bank’s study on the equilibrium exchange rate have been shared with several local and foreign experts, including the IMF mission that was in Malta last May.
The argument would be that deflating an asset price bubble at an early stage contributes “per se” to long-term financial and monetary stability. Against this view, I tend to share the position of those arguing that asset price bubbles are very difficult to identify in practice and, even assuming that they were correctly recognised, there is a lot of uncertainty as to how asset markets would react to policy changes. Furthermore, this strategy may prove difficult to communicate to the public. As concerns financial policy, the regulators’ task of ensuring the long-term soundness of the financial system entails creating the right incentives for market participants not reacting in excess in a given cyclical position and avoiding excessive misalignments. To this end it is essential, first, to encourage better knowledge of the risks assumed, a long-term orientation to analyses and, consequently, more prudent management within financial institutions. Second, a greater heterogeneity among financial market players to avoid mimetic behaviour seems desirable, although this is something the markets would normally develop by themselves. Third, greater transparency and disclosure by the authorities and private institutions would help market participants to focus on fundamentals. Fourth, a better understanding and evaluation of liquidity patterns in financial markets is called for, on the part of both market participants and supervisors. Finally, the regulatory authorities should obviously not introduce rules promoting short-term strategies. Let me focus now on the relationship between bank credit, loan losses and provisions for loan losses.

In this sense, a strategy which on top of our economic analysis regularly assesses money and credit developments has an important benefit on the monitoring side in that it can contribute to identifying and limiting the emergence of unsustainable developments in asset prices. In terms of recent developments in the euro area real estate sector, the latest available data on house prices appears to support the notion of a cooling in euro area housing market developments after a prolonged period of unusually high growth rates in many euro area countries. That said house price growth generally remains relatively elevated in the euro area on average when seen in historical perspective – notwithstanding considerable heterogeneity in underlying country developments. The outlook for the euro area as a whole – I insist, for the euro area as a whole – remains that of a relatively soft landing. Within this context, a continued moderation of residential investment would also be likely. I thank you for your attention. BIS Review 3/2008  5
At the same time, the unemployment rate is at a historical low and, in some countries, it is so low that it will be increasingly difficult to recruit from the remaining pool of labour. All this means that we could see a more prolonged cost-push shock coming from wage growth. This is unlikely to prevent goods disinflation, since wages represent only around 20% of direct input costs for manufacturing firms. But wages make up around 40% of direct input costs for services providers, and services inflation accounts for almost two-thirds of core inflation. In parallel, firms’ profit margins continue to grow, in part because some are taking advantage of supplydemand imbalances to test consumer demand with large price increases – over and above their increase in costs. But in the absence of a persistent rise in market power[8], this can only continue insofar as demand remains resilient. Otherwise, firms will have to absorb cost increases in margins and price pressures will start to ease. This is where the third input comes in that we will use to assess the rate path, which is the strength of the transmission of our policy measures in restricting demand. Policy transmission We saw a large contraction in domestic demand at the end of last year and the latest data, such as retail sales, suggest that consumption has not yet rebounded. But this has not stopped cost increases from passing through. Short-term measures of momentum in core inflation – for instance the three-month on three-month rate – actually increased in February.

We have plenty of tools to provide liquidity support to the financial system if needed and to preserve the smooth transmission of monetary policy. In my remarks today, I will discuss our policy path so far and what lies ahead. And I will explain the reaction function that will govern our future rate decisions. The path so far Last year, inflation in the euro area surged strongly, and spread deeply, because it was driven by two types of shocks which hit the economy at the same time. First, we underwent an unprecedented series of negative supply shocks caused by pandemic-induced supply chain disruptions, Russia’s invasion of Ukraine and the ensuing energy crisis. This significantly increased input costs for all sectors of the economy. Second, we faced a positive demand shock caused by the reopening of the economy after the pandemic. That favourable demand environment allowed firms to pass rising input costs through to prices much faster and more strongly than in the past. [1] Our policy stance was starting from highly accommodative levels, having been tailored to the very-low inflation environment of the past decade and the initial deflationary risks of the pandemic. So, we had to adjust, as quickly as possible, a stance that had become inadequate. This initially placed important emphasis on signalling, i.e. demonstrating, through actions and commitments, that monetary policy would cover the necessary ground decisively. That is why we put a great weight on the pace of our actions, hiking rates in large increments.
And due to under-investment there is evidence of bottlenecks in the refinery arena which will take time to be rectified. So supply constraints too are for the time being a real possibility. The November 2005 Inflation Report explained that the oil futures curve indicated in early November that the oil spot price would remain around current levels for the next few years. However, there was considerable uncertainty around this. The Report cited illustrative estimates that market participants thought there was a one in four chance that oil prices would be $ per barrel higher or lower in six months time. This is a significant increase from February 2004, when the probability of such a change was thought to be less than one in fifty [Chart 2]. Chart 2: Market beliefs about oil prices six months ahead (a)  Source: Bank of England, November 2005 Inflation Report This shows that although the central case has oil prices essentially flat over the forecast horizon there is still a possibility we will see prices above those of today at some date, with corresponding significance for monetary policy. In the UK it is difficult to say with certainty what proportion of the last year’s rise in CPI inflation (that is from 1.1% in September 2004 to 2.5% in September 2005) was due to oil. But estimates suggest that up to around half the pick up can be explained by oil. The key issue for me is the possible impact of oil prices on inflation expectations.

Svein Gjedrem: Inflation targeting in an oil economy Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at Sparebanken Møre, Ålesund, 4 June 2002. Please note that the text below may differ slightly from the actual presentation. *  *  *  Norway is unique in being both a fully developed economy and a major oil exporter. Last year, Norway was the world’s third largest exporter of oil. In the future, we will become an increasingly important exporter of natural gas. The present value of remaining petroleum reserves has been estimated at NOK 2 200bn, or roughly 1½ times our current GDP. The bulk of Norway’s petroleum wealth will be extracted over a period of 40 years, from 1990 to 2030. New technology has had a significant impact on our future production potential. In spite of rapid production growth, the estimated present value of our petroleum wealth has increased some 35-40 per cent over the last ten years, measured in real terms. As an example, the registered oil reserves in the Ekofisk field are larger today than when the field started production 30 years ago. Revenues from the petroleum sector have generated a fiscal surplus of some 10-15 per cent since 2000. A similar surplus is generated on the current account, reflecting capital outflows to the Government Petroleum Fund. Even in 1998, when the oil price fell to 10 USD/barrel, Norway had a fiscal surplus of some 4 per cent of GDP.
Seen over a longer period of time, inflation would thus on average have been too low and unemployment unnecessarily high – this has also led to a discussion about the target for monetary policy. Others argue that the Riksbank takes into consideration in its repo-rate decision factors that should not be considered. This criticism has been mainly aimed at the Riksbank’s concerns over household debt that have contributed to monetary policy being somewhat less expansionary in recent years than would otherwise have been the case. It has sometimes even been claimed that the Riksbank has on its own initiative introduced new targets for monetary policy that lie outside its statutory mandate. Here I would like to be clear about my personal opinion: I think that the Riksbank has succeeded well in its task of attaining low and stable inflation. I thus do not share the view that we have been over-zealous in combating inflation. I also think that a policy that gives consideration to the risks in the credit and housing markets is entirely compatible with our mandate of creating conditions for stable economic growth and that this has nothing to do with introducing new targets for monetary policy. As it would be unfortunate if the impression that the Riksbank is exceeding its mandate takes root, I intend to use much of the time at my disposal today to explain why I consider this not to be correct.

If the MPC does not take any action, there is then a danger of moving from a low inflation regime to a high inflation regime. Given that core inflation tends to be more persistent, we need to be watchful of any further sustained pickup in momentum. 3. Financial stability remains sound overall but there remain pockets of vulnerability. a. Financial institutions remain sound with robust capital positions and high liquidity, while NPL ratios remain low. b. Debt serviceability of households and businesses has improved in line with the economic recovery and with support from financial measures implemented since the crisis. However, there are vulnerable segments given the uneven nature of recovery especially SMEs in sectors that are lagging and low-income households. Therefore, targeted measures will still be in place to support vulnerable groups. Although raising interest rates may increase financial burdens for indebted households to some degree, the potential costs of sustained high inflation is much greater. Therefore, the MPC judged that policy rate hike will not harm financial stability and will in turn help prevent inflationary pressures that will hurt consumption in the future. [3.2 What should we really be worried about?] Given the reasons and trade-offs outlined above, we are taking a gradual and measured policy normalization approach. However, there remain certain issues that raise concerns to some. Let me take this opportunity to clarify several issues: (1) Thailand is not behind the curve The context of Thailand is different from other countries that have begun their rate hikes a while back. 1.
BIS central bankers’ speeches  5  The Federal Reserve has a clear domestic-oriented mandate that was set by the U.S. Congress. Instead, I believe that setting U.S. monetary policy to best achieve our domestic mandate will help to support sustainable growth and development abroad. As I see it, there are two key steps that are essential in the design of an appropriate monetary policy strategy. Step one is to take an expansive view of the global eco-system in which we all operate. We need to take into consideration that our decisions have broad consequences for the global economy and, conversely, that international developments can have significant consequences for the U.S. economic outlook and therefore the appropriate stance of U.S. monetary policy. As part of this, we need to be nimble in incorporating new developments into our monetary policy decision-making. Step two is to communicate clearly and consistently. That means clarity about the objectives of monetary policy, how the Fed plans to meet those objectives in light of the economic and financial market environment, and how it formulates its responses to unforeseen circumstances that lead to revisions to its economic forecast. In my view the Federal Reserve is making progress in both of these areas. With respect to the first step, I believe we do take an expansive view of those factors that might affect the U.S. outlook and we revise our views accordingly. Our speeches, statements, and actions this year illustrate this is how we operate.

Stefan Ingves: Evaluation of the Riksbank’s monetary policy and work on financial stability 2005–2010 Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision, to the Riksdag Committee on Finance, Stockholm, 31 August 2011. *  *  *  The Riksdag (the Swedish parliament) and the people of Sweden must be able to see that the Riksbank is doing its job well. It is therefore necessary for them to have good insight into our work and for the Riksdag to be able to make regular evaluations of this work. The evaluations are also important for the Riksbank to be able to develop and improve its analyses. We have already said on several occasions that we consider it an excellent initiative by the Committee on Finance to regularly commission highly-qualified external experts to evaluate our work. Today, when we are to discuss the second evaluation of this type, I would therefore like to begin by thanking Professors Goodhart and Rochet for carrying out this work on behalf of the Riksdag Committee on Finance. We also welcome the Committee on Finance’s decision to give the evaluators the task not only of assessing how we conduct monetary policy, but also how we manage the task of promoting a safe and efficient payment system, that is, what we have interpreted as our responsibility for financial stability in Sweden.
The existence of abundant natural resources can be a mixed blessing. Experience elsewhere suggests that the sudden occurrence of major income flows tends to undermine future production potential. In the long term, it is difficult to ensure an efficient distribution of wealth between and within generations without triggering rent-seeking behaviour among households and firms. In the short term, the volatility in income flows and in terms of trade poses a challenge for monetary and fiscal policy. The mixed blessing of national wealth is not a new problem. Vigilant observers were already aware of this in the 17th century. In modern economic language, the Moroccan ambassador to Spain pointed to the problem of deteriorating competitiveness 300 years ago (see Chart 2). The main long-term challenge to economic policy is how the returns on petroleum wealth can be phased into the economy without a deterioration of our future growth potential. Even with our substantial petroleum reserves, human capital is by far our most important resource. It accounts for over 80 per cent of Norway’s national wealth (present value of future labour). Income from oil and gas is transferred to financial assets through the government budget. These transfers are large in terms of GDP, but still minor compared with our human capital. Oil and gas reserves account for about 7 percent of national wealth today, whereas in 2030 these reserves will be reduced to only 1-2 per cent. To meet these challenges, the Norwegian Government Petroleum Fund was established on 22 June 1990.

But when the landscape is dark and threatening, those charged with making monetary policy must comport themselves with a grace that reassures markets and the public that they are calmly in control of the sacred charge with which they have been entrusted. They must keep their “cool” even when the vast, infinite cry of the money changers reaches a fevered pitch, the economic seas are blue-black and the clouds in the financial markets are red as blood and tongues of fire. Presenting an image comparable to that of the visage depicted by Edvard Munch – of policymakers trembling with anguish at the daunting demands of their profession – would provide scant comfort to those who depend upon them to maintain their composure and skate ably across a cold and foreboding economic landscape, seeking to guide the economy to a better place. Central banks are just one vehicle for influencing overall macroeconomic behavior, in addition to influencing through regulation the microeconomic agents that transmit that influence to the markets – banks of deposit and other financial institutions. We work alongside another potent macroeconomic lever: fiscal authorities – governments that have the power to tax the people’s money, spend it in ways they deem appropriate, and create laws and regulations that influence microeconomic behavior. Unless fiscal authorities can structure their affairs to incent the private sector into putting the cheap and ample money the Fed has provided to the economy to work in job creation, monetary policy will prove impotent.