samchain/econo-pairs-v1 huggingface dataset:
Sveriges Riksbank (2012), “Long-run developments in the Swedish labour market” article in Monetary Policy Report, July 2012. Sveriges Riksbank (2013),”Financial imbalances in the monetary policy assessment” article in Monetary Policy Report, July 2013. The World Trade Organization (2013) “World Trade 2012, Prospects for 2013” Press release April 10, 2013. Williams, J.C. (2013), “A Defense of Moderation in Monetary Policy” Working Paper 2013:15, Federal Reserve Bank of San Francisco. Woodford, M. (2012), “Inflation Targeting and Financial Stability” Economic Review, 2012:1, Sveriges Riksbank. 12  BIS central bankers’ speeches

It is therefore understandable that when the reversal of capital inflows came, it caused the damaging financial turmoil that we have seen in a number of Asian economies. 10. Financial liberalization encourages greater financial intermediation, domestically and internationally, and this obviously is beneficial to economic growth and development. But clearly the risks arising from this worthy process must be identified and managed properly before the long term beneficial effects could be realized. The risks are, nevertheless, not well appreciated, simple as they may be, particularly with the benefit of hindsight. 11. There is, as always, credit risk. Yet it is such a common feature that undue exuberance on the part of investors would push price to earning ratios well beyond fundamentals. Bankers also fail to assess the impact of interest rate hikes on the value of collateral or on cash flows. The result is therefore the usual over exposure of investors and lenders to asset losses. Then there is maturity risk. To say that it is risky to finance illiquid non-tradables, such as property, with short term capital inflows is, I suppose, teaching grandmothers to suck eggs, particularly in this company, but this again has been a common feature underlying financial shocks, not just in Asia but also in other parts of the world. The same with currency risk. Many borrowers, in both the private and public sectors, were keen to borrow foreign currency funds to finance investments that do not generate sufficient foreign exchange to repay the debt. Such debts were also unhedged.
However, the uncertainty regarding the way the economy will develop leads to uncertainty over the future interest rate, too, which is reflected in the fan around the repo-rate path. My impression is that there is normally very little opportunity to influence market expectations further than six months ahead by publishing a repo-rate path. Goodhart and Rochet also show in their evaluation that it is the Riksbank’s repo-rate path that adjusts to market rates rather than vice versa, except in the short term, when the influence is mutual. But they also point out that the data period is so short that it is not possible to draw any far-reaching conclusions.21 Check against other monetary policy frameworks We should check the repo rate produced in our forecasts and models against other monetary policy frameworks. Personally, I usually check to see whether the repo rate level is reasonable by looking at what the Taylor rule would imply. In the original Taylor rule, the policy rate is determined by inflation and the GDP gap.22 According to this rule, the policy rate shall be set equal to the long-term level of the policy rate plus 1.5 times the deviation in inflation from target plus 0.5 times the deviation in GDP from potential GDP. The Taylor rule has the advantage that it is based solely on information in the current situation and not on forecasts. Measured inflation is used as an indicator of future inflation, which may be reasonable if there is some sluggishness in the inflation process.

Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  15  Figure 11. Lending to households and companies Annual percentage change, seasonally-adjusted 20  20  Lending to households Lending to companies  15  15  Total  10  10  5  5  0  0  -5  -5  -10  -10 99  00  01  02  03  04  05  06  07  08  09  10  11  Source: The Riksbank  Figure 12. Market surprise at repo-rate decision Basis points 50  50  0  0  -50  -50  -100  -100  -150  -150 Change in the repo rate  Feb 07 Mar 07 May 07 Jun 07 Sep 07 Oct 07 Dec 07 Feb 08 Apr 08 Jul 08 Sep 08 Oct 08 Oct 08 Dec 08 Feb 09 Apr 09 Jul 09 Sep 09 Oct 09 Dec 09 Feb 10 Apr 10 Jul 10 Sep 10 Oct 10 Dec 10 Feb 11 Apr 11 Jul 11 Sep 11 Oct 11  Market surprise  -200  -200  Note. The market surprise is measured on the basis of the change in the interest rate for a 1-month STINA swap in connection with the publication of the repo-rate decision. Sources: Reuters and the Riksbank  16  BIS central bankers’ speeches  Figure 13.
I say this in my capacity as a totally independent central banker: the new government in France is taking reforms very seriously and is acting with impressive speed. France is now a reliable economic partner of Europe and Germany. Second, it would be ridiculous to reduce the debate to the old caricature that contrasts "German rules” with “French expenditure". To my mind, it is out of the question to implement a “transfer union”, which would only benefit certain countries, or to introduce Eurobonds, which would amount to collectivising debts. Need I remind that France too is a net contributor to the European budget, or to financing for Greece? But I am convinced that risk sharing between 1/3  BIS central bankers' speeches  countries can – and should – go hand-in-hand with risk reduction mechanisms. It is wrong to draw a distinction between solidarity and responsibility: in reality, they are complementary. For crisis prevention to be credible, it must also have the instruments needed to cushion the effects of substantial shocks that may arise regardless. As for the third cliché, let’s stop pitting the "French vision” against “German pragmatism". In order to reform the euro area, we must be practical and take real needs, and particularly those of businesses and entrepreneurs, as our starting point – as I aim to do in the second part of my speech.

The ECB has had to use different instruments at different stages of the crisis. Now the economic and financial situation in Europe is significantly better. Financial fragmentation has receded, Member States have made significant efforts towards economic convergence and the governance of the euro area has been strengthened. We are gradually moving out of the  BIS central bankers’ speeches  1  crisis phase into a different environment, with the focus shifting from solving the crisis to ensuring stable economic growth and inflation close to 2%. It requires a different approach and different instruments. The developments beyond our eastern border are the big topic of debate in Poland at the moment. Could the conflict between Russia and the Ukraine affect Europe and its economy in any way? The impact on trade or the financial system has thus far been limited. But this situation does give rise to uncertainty, so it can be regarded as a potential negative factor that could hinder economic growth in Europe, and that is part of our risk assessment. What about the strong euro? Aren’t you worried it could cause problems for European exporters and hinder the recovery? The ECB doesn’t target the exchange rate. Our primary mandate is price stability, and within this mandate, the exchange rate of the euro is among the factors determining the level of inflation. And indeed, the strong euro is contributing to the current low inflation.
Therefore we moved last year to open up the Singapore market further to foreign banks. We hoped that this would spur efficiency and innovation among the local banks, and push well-run banks to seek scale and expand at home and abroad. We were convinced that unless we opened up, this transformation would never take place. There is no substitute for real competition. We did not want the liberalisation to weaken our banks and destabilise the financial system. So we are not taking a big bang, laissez faire approach. Instead, we are phasing the liberalisation over five years, and opening the market to financially strong, committed foreign players. At the same time, we are motivating the local banks to strengthen themselves. We have raised disclosure standards to international norms, and we now require banks to publish details of their nonperforming loans and inner reserves, which were previously closely guarded secrets. We are also raising corporate governance standards, which lie at the heart of the improvements required in Asian banking systems. We instituted nominating committees on bank boards, comprising a majority of independent directors. Their remit is to ensure that persons appointed to the boards and  BIS Review 76/2000  8  to key executive positions are selected for their expertise, and their ability to contribute to the bank and to the interest of all shareholders. Most important of all, we are requiring the banking groups to make a clear separation between their financial and non-financial businesses.

•  Five of the top 10 primary growth markets will be in the Asia-Pacific; this includes China, India, and Indonesia. There are three structural factors driving demand for insurance in Emerging Asia. First, Asia is getting richer. Projections by the IMF show that Emerging Asia will remain the fastest growing region in the world over the next decade. As incomes rise in Asia, governments, corporates, and individuals will increasingly seek insurance to protect their growing economic assets. •  Burgeoning urbanisation, infrastructure development, and cross-border trade will drive demand for commercial and specialty insurance. •  A growing middle class and rising affluence will underpin a steady increase in life and health insurance penetration rates. Second, Asia is getting older. Asia is facing declining fertility rates, increasing life expectancy, and a rapidly ageing population. •  The United Nations projects that, by 2030, Asia’s old age dependency ratio will be 16%, up from today’s 11%. •  Against this demographic backdrop, public retirement and pension systems in Asia remain inadequate. The retirement gap between savings and retirement needs can be as high as 13 years. •  This will spur greater demand for private health insurance, annuity and other retirement security products. Third, Asia is becoming more aware of catastrophic risk. •  Over the last 30 years, Asia has borne the brunt of natural catastrophe losses, accounting for almost half of the world’s estimated economic losses from natural disasters. Yet less than 5% of the losses were insured, compared to 40% in advanced economies.
Savings in the USA 12  12  10  10  8  8 6  6 Savings ratio Sparkvot  4  Forecast Prognos  4  2  2  0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003  0  Source: US Department of Commerce  2. Unemployment in the USA, the euro area, Germany and France 14  14  USA Euroområdet Euro area Germany Tyskland  12  12  Frankrike France  10  10  8  8  6  6  4  4  2 1993  2 1994  1995  1996  1997  1998  1999  2000  2001  2002  Sources: Bureau of Labor Statistics, Eurostat, Federal Labor Office, National Employment Office  3. Euro area inflation Percentage 12-month change 3.5  3.5  3.0  3.0  2.5  2.5  2.0  2.0  1.5  1.5  1.0 0.5  1.0  HICP  0.5  Underlying inflation (HICP excl. energy and unprocessd food)  0.0  Ap r- 0 0 Ju n00 A ug -0 0 O ct -0 D 0 ec -0 0 Fe b01 Ap r- 0 1 Ju n01 A ug -0 1 O ct -0 D 1 ec -0 1 Fe b02 Ap r- 0 2  0.0  Source: Eurostat  8  BIS Review 37/2002  4. Number of employed in total, excl.

These include the rise of non-bank financial intermediation, and the deep pockets of opacity and interconnections with the banking system – as we have seen in cases such as Archegos, Evergrande, Greensill and Huarong. In addition, medium-term structural trends such as the ongoing digitalisation of finance and increasing climate-related financial risks are so cross-sectoral and global in nature that they can only be effectively addressed through greater cooperation across sectors and across jurisdictions. 2/3  BIS - Central bankers' speeches  My third point is that cooperation can, and should, take different forms. While regulation – most notably the Basel framework – is perhaps the most visible product of global cooperation, there are a number of other, equally important, dimensions. Supervisory principles and guidelines, while often high-level in nature, are a powerful tool to help raise the bar when it comes to the quality and effectiveness of risk management practices and supervision, and to help provide a common global baseline. Supervisory cooperation, including through the sharing of supervisory intelligence and best practices, is a vital channel for authorities to assist and learn from one another. Indeed, merely having a continuous and ongoing channel of communication among authorities is perhaps one of the most important levers available to us. Equally, cooperation should be multi-faceted in scope, and should encompass both microprudential and macroprudential financial stability dimensions.
Since then, the support to the level of activity from asset purchases has likely been waning. At the same time, the value of the £ stock of purchased assets has declined relative to nominal GDP (from 22.5% to 20.1%) as the latter has increased. 2  Over the period 1971 to 2008 the correlation between unemployment and inflation was –0.2. 3  As best we can tell around ½ percentage point. 2  BIS central bankers’ speeches  seemed slow to pick up. The early signs were that 2015 would be more promising, but the rate of wage growth seems to have levelled off again in the most recent data. Wage data can be volatile in the short run, and this recent pause may prove to be more noise than signal. But there are several plausible explanations for why wage growth might have levelled off more recently. •  The first is quite simply that the number of hours worked per person per week has levelled off in the most recent data, and even started to decline. This could have a temporary flattening effect on the growth rate of wages earned per week. •  The second is the nature of the growth in employment that we have seen. It has been unusually skewed towards employees with less experience and educational attainment and in occupations that tend to attract lower levels of pay. These compositional effects tend to push down on starting salaries, though that shouldn’t affect future wage growth prospects.

Operational systems and controls, including mechanism to protect consumers’ interest and prevent criminal activity, can vary considerably between entities and jurisdictions. With typically hundreds or more money services entities in most countries, such diversity presents a unique set of challenges for money services businesses and regulators seeking to put in place the necessary frameworks to manage and mitigate risks associated with the business. In the more recent period, money services businesses have been confronted with increased challenges from heightened global concerns with crimes committed cross-border and  BIS central bankers’ speeches  1  transnational money laundering. The cash-based nature of MSB transactions, global reach of remittance networks, and customer verification processes, if not properly managed would render MSBs susceptible to money laundering threats. Heightened regulatory scrutiny over money laundering controls and heavy penalties meted out by regulators might prompt banks to review their relationships with MSB companies. Some banks have withdrawn banking facilities provided to MSB companies, creating significant difficulties for large numbers of MSB companies that are doing legitimate business. On the other hand, as the bar is raised for MSBs to strengthen AML procedures, there is a concern over the unintended consequences that this might exclude certain segments of society from access to the formal financial system. Worse, it pushes more transactions to the informal or illegal channels. I raise these observations to highlight two points which I thought are relevant to this Conference.
Central banks that also supervise core financial institutions would have the clear benefits of immediate access to vital information and expert assessment from supervisory staff about the health of individual institutions and their systemic implications. This could greatly help reduce the likelihood of any unnecessary delay or even misinformed decision that might hamper efforts to stem a financial crisis. For emerging market economies, the case for central banks to supervise the core financial institutions may be even stronger. This is because, financial markets in these countries are typically not well developed enough to serve as an efficient channel for the transmission of monetary policy. Market interest rates and even commercial banks’ prime rates react only sluggishly to changes in central bank’s policy rate, and often with a long time lag. In these circumstances, the traditional tool of monetary policy alone is unlikely to be enough to maintain economic and financial stability. Since in most emerging market economies, commercial banks are by far the most dominant players in the financial system, central banks with supervisory responsibilities could and should make use of targeted prudential policy to tackle financial imbalances and excessive asset price movements, both of which lie at the heart of all financial crises. This was what we did in 2003 to successfully contain incipient speculative bubbles in the property sector by imposing a ceiling on banks’ loan-to-value ratio of high-end housing loans.

Modest public debt gave the government significant fiscal space, and the outbreak and restrictive measures were moderate. The structure of the economy, on the other hand, with tourism-related services being the largest sector, created a large potential demand for fiscal accommodation to compensate affected firms and households, as discussed above. As in other countries, both fiscal and monetary policy were applied to respond to the pandemic with substantial easing, and the size of the fiscal measures taken were close to the average in OECD countries. Fiscal measures in response to the pandemic  Iceland’s monetary space was also substantial, with domestic interest rates being significantly above zero at the outset of the pandemic. However, the size of Iceland’s monetary space should not be overestimated. The combination of relatively illiquid currency markets, fairly strong exchange rate pass-through to prices and a long history of monetary instability limit how much the interest rate differential visà-vis abroad can narrow without a risk to inflation. Nevertheless, the Central Bank of Iceland’s policy rate was reduced to a historical low, greatly softening the blow to the domestic economy, especially the construction sector. As it turned out, the economy recovered very strongly as COVID restrictions were lifted and the Central Bank needed to withdraw the monetary stimulus and start raising interest rates earlier and at a faster pace than most advanced countries. From accommodative to tightening policy  Reversing the stance of fiscal policy has been a more gradual process.
Mr Clementi elucidates the core purposes of the Bank of England and gives his thoughts on the UK economy  Speech by Mr David Clementi, Deputy Governor of the Bank of England, to the Cardiff Business Club Dinner, Cardiff, on 28 February 2000. *  *  *  Ladies and Gentlemen, it is a pleasure to be here in Cardiff. I last visited the city in November for the final of the Rugby World Cup. I admired the new stadium, loved the atmosphere and enjoyed the game. Of course the big match is coming up this Saturday, where the men in white will be seeking revenge for the damage done to them last year in the unlikely setting of Wembley Stadium. We can safely leave the debate on the match to the newspapers, sure in the knowledge that they will cover huge amounts of column inches on the likely outcome by the time we get to kick-off. Instead this evening I would like to outline the changes in the Bank since independence in 1997. The Bank may trace its origins back to 1694; but it has been through a period of profound change since 1997 when the Labour Government was elected: the arrival of monetary independence and with it the Monetary Policy Committee; the transfer of debt management to the new Debt Management Office; and the merger of the Bank’s banking supervision department into the Financial Services Authority.

On the face of it, these add up to a substantial change to the Bank’s responsibilities; and to our operations and staffing needs. But in fact our underlying objectives as a central bank - what we term our three core purposes - have remained remarkably unchanged. These are, first, maintaining the integrity and value of the currency; secondly, maintaining the stability of the financial system; and, thirdly, seeking to ensure the effectiveness of the UK’s financial services. I would like to say something about each of the three core purposes in turn. Core purpose: monetary policy As regards monetary stability, as you all know, the Bank was given monetary independence in May 1997 when the Monetary Policy Committee was established to set interest rates. The structure of the Committee was later set out in the Bank of England Act 1998 and the Bank’s independence in pursuit of monetary policy is enshrined there. To quote directly, our objective is “to maintain price stability and, subject to that, to support the economic policy of HM Government including its objectives for growth and employment”. The balance implied in this objective is important. First,although the Bank has operational independence, the inflation target - RPIX (that is, retail prices excluding mortgage interest payments) of 2.5% - is set by the Government and confirmed in the Budget each year. And this target is symmetrical. We on the MPC are as concerned about inflation being below 2.5% as we are about it being above 2.5%.