samchain/econo-pairs-v1 huggingface dataset:
However, the quantity of money in the form of deposits and banknotes and coins that the general public decides to keep as a liquidity buffer in readiness for coming transactions is also affected by the stability of the value of other assets and how rapidly they can be transformed into means of payment. Having funds in a current account at a bank or keeping banknotes in a mattress does not produce a return. It is therefore better, of course, to, for instance, purchase interest-bearing treasury bills which can be rapidly converted into transaction funds when wishing to make a payment. The ability to borrow money quickly also affects the willingness to keep a liquidity buffer in the form of banknotes, coins and liquid bank deposits. Efficient second-hand markets and access to overdraft facilities have, for instance, affected the needs of the public to keep a liquidity buffer. The public's need for transaction funds for purchase of shares has probably also increased and it is likely that it varies with developments in the stock market. Many factors have thus contributed to changes in the 1 rate of circulation of money and it has therefore become more difficult to predict. To sum up, the role of money for the level of prices in the economy has not fundamentally changed. What has happened is that the trend in the financial markets has meant that it has become more difficult for the central banks to use the quantity of money as an intermediate target for an ultimate price stability objective.

In addition, lower long-term rates would reduce the cost of capital for businesses, thereby fostering higher levels of capital spending for any given economic outlook. In considering the limits to balance sheet expansion, there are two constraints – one major and one more minor. The first constraint is the risk that the balance sheet expansion might cause inflation expectations to become unanchored, leading to higher risk premia. This risk is presumably greater in a period in which budget deficits are high, as they are today. 6  BIS Review 127/2010  If exit concerns were to rise as purchases increased, then a rise in inflation risk premia would offset at least some of the expected fall in interest rates. In contrast, the more credible the ultimate exit strategy, the less likely it is that inflation risk premia would go up and the more effective purchases would be in lowering long-term rates. Also, the more credible the ultimate exit plan, the more confident investors would be about the Fed’s willingness to do what is needed to accomplish its objectives. This is important because it would help stabilize longerrun inflation expectations at levels consistent with the dual mandate. The FOMC should be able to assure investors that it has both the means and the will to exit when – but not before – the time is right. That is because the Federal Reserve has the tools to control financial conditions and credit creation even with an expanded balance sheet.
While measures have been taken to increase housing supply, it will take some time for this supply to come onstream. Second, should demand remain resilient, COE premiums are likely to stay high. This could present upside risks to the 4.0–4.5% forecast for CPI-All Items inflation. In sum, the costs of imputed rentals on owner-occupied homes and private road transport will account for about 60% of CPI-All Items inflation this year. CPI-All Items inflation will also be volatile from month to month. Two factors are significant: one, the fluctuations in COE premiums; and two, the base effects associated with the timing of the government’s disbursement of service & conservancy charges and rental rebates.2 This factor, for example, accounted almost entirely for temporary rise in inflation from 5.0% in  2  S&CC and HDB rental rebates were given out in June, September and December last year, but were discontinued after March 2012. This will result in higher temporary contributions from accommodation cost in the corresponding months in 2012. 2  BIS central bankers’ speeches  May to 5.3% in June. We expect inflation in July to fall to around 4%, in part reflecting the reversal of this base effect. Let me now move on to MAS’ monetary policy. Monetary policy Monetary policy has had restraining effect on inflation and current policy stance remains appropriate The persistence in Headline Inflation has led to some questions about efficacy of Singapore’s exchange rate-centred monetary policy framework. MAS has studied this issue very carefully.

We are assured that monetary policy framework remains effective and the current policy stance remains appropriate. Monetary policy in Singapore has been tight for more than two years now. Since April 2010, MAS has put in place a modest and gradual appreciation path for the trade-weighted Singapore dollar policy band. In April this year, MAS tightened monetary policy by increasing the slope of the policy band further. This exchange rate policy stance has had a restraining effect on inflation through two channels: first, by filtering import prices; and second, by moderating economic activity. First, a stronger exchange rate has helped to filter import prices. Take, for instance, oil prices. Since April 2010, global oil prices have risen by an average of 15% year-on-year, but domestic petrol pump prices have only increased by 8%, reflecting the effects of the exchange rate. Second, the stronger Singapore dollar has had a restraining effect on activity in the economy, especially through the export-oriented sectors. This has helped to dampen business cost pressures. These two effects have been quite significant in helping to dampen inflation. Since April 2010, the trade-weighted Singapore Dollar has appreciated by 3.3% per annum, reflecting MAS’ tighter monetary policy stance. Our simulations show that if this appreciation had not taken place, CPI-All Items inflation this year would have been 6.5–7.0%, rather than the 4.0–4.5% we have projected. But there is a limit to how far we can use exchange rate policy to contain inflation.
These are the two “key battle fields”. Regarding climate-related risks, there are two essential levers to win the battle: (i) disclosure of present data and their standardisation; and (ii)  forward looking assessments – the stress tests. The “snapshot” of the risks, and their “video”. Disclosure will help markets to appropriately price climate-related risks and ensure efficient allocation of capital. That is why disclosure should become mandatory, at least as a first step for financial institutions, as it is already in France, and for large corporates. The EU, here too, leads by example, having decided standardised mandatory disclosure from next year on. Because of data gaps and still a lack of clear transition policies, assessing individual or sectoral exposure to climate risks remains nevertheless a thorny issue, as highlighted in the latest NGFS report published last weekiii on bridging data gaps. Hence, setting up an ambitious international reporting framework for climate-related financial disclosure is another key priority. This means achieving a common framework – basic but already significant – for all jurisdictions with the possibility to be more ambitious for those who want to. In addition, we should bring on board the “double materiality” promoted by the European Commission: consider both the risks that affect the reporting entity itself and the impact it has on the environment through its activity, and also encourage a broad coverage of ESG topics, not limited to climate change.

After depreciating at the beginning of 2004, the króna remained fairly stable until it appreciated noticeably towards the end of the year. It continued to appreciate in the New Year and is currently higher than it has been since early 2000. The exchange rate of the króna has a widespread impact on the Icelandic economy. It directly affects the prices of imports and exports of goods and services. The combined value of Iceland’s imports and exports in recent years has been equivalent to 75-80% of GDP. The real exchange rate may be defined as the development of domestic prices or unit labour costs relative to trading partner countries, based on a given reference year and measured in the same currency. A rise in the real exchange rate implies that prices or labour costs in Iceland have increased by more than among trading partner countries after adjustment for changes in the exchange rate, i.e. the competitive position of domestic sectors has deteriorated. When it was decided to launch the large-scale investment projects for the aluminium industry that are currently under way, it was perfectly clear that the real exchange rate of the króna would rise considerably, as the Central Bank repeatedly pointed out in its public statements. In particular, the real exchange rate would be driven up by a rise in the nominal exchange rate caused by heavy capital inflows. If inflation could not be kept under control, the real exchange rate would also increase as a result.
The economy has now regained much of its dynamism. The key economic numbers are providing the confirmation. Economic growth has been impressive. The unemployment rate has been coming down, albeit slowly. Deflationary pressure has been easing. The external sector has been active and we are running a substantial current account surplus. The residential property market, on which the wealth of many in our community depends, has bottomed out from a falling trend that had lasted for over five years. Domestic consumption has been picking up. Of more direct interest to us in the HKMA, the risks to monetary and banking stability, which had been worrying us for some time, have receded. The very fast dissipation in the number of cases of personal bankruptcy and negative equity mortgages is very welcome indeed. The turnaround in the Hong Kong economy and, consequently, the improvement in the asset quality of banks, were made possible by the more favourable global economic environment and by measures taken to strengthen economic ties between Hong Kong and the Mainland. Indeed, banks in Hong Kong have also benefited directly from two of these measures. The first is the granting of easier and greater access to the Mainland banking market under CEPA from 1 January 2004 and the second is the introduction of personal renminbi business in February. These will in time help to broaden meaningfully, I am sure, the scope of banking business for banks in Hong Kong.

Joseph Yam: Banking sector risks and challenges Luncheon talk by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Institute of Bankers, Hong Kong, 16 June 2004. *  *  *  The turnaround Thank you for inviting me to talk to you today. It is a pleasure to be here and I am delighted to see such an enthusiastic attendance. I was recently looking over past speeches (not, let me assure you, with the aim of recycling them), and I noted that the last time I spoke at one of the Institute’s lunches was on 24 October 2001. This has prompted me to reflect on how much we have all been through over the past 32 months - both as a financial community and in the larger community. When I last spoke to you the world was just six weeks on from the 9-11 attacks. There was a strong sense that we were heading for difficult times, with a worsening global environment, and with deepening deflation, unemployment, a budget deficit, falling asset prices and a rising number of negative equity mortgages within Hong Kong. Conditions were likely to get worse before they got better, I concluded. Well, after a period of great difficulty, in which things got considerably worse than I think any of us had imagined, conditions are now at last improving. Since around the middle of last year Hong Kong has been enjoying a strong and broadening recovery.
With this requirement, my wish is that it will provide an impetus to the attainment of the chartered banker qualification. Second is Character. If competence represents the ‘head’ of a professional banker, then character must surely be the ‘heart’. Over the last decade, the ethical scorecard of the financial sector was blemished by irresponsible risk-taking and opaque practices of bankers in the lead up to the global financial crisis. Ethical lapses and conduct failures in more recent years have compounded matters. Far too often, we witness the rise of bankers who are highly competent but ethically deficient. Worse, we allow and tolerate such practices. This is unsustainable. It also tarnishes the reputation of the many who spent their lifelong careers in the industry, and who hold the profession with great dignity and regard. Another principle worth attention in the Hippocratic Oath is the adage, “Do no harm”. There is a lot of richness in this ethos. It is worth emulating. Considering that consumers come into contact with banking personnel far more frequently than they visit their doctors, one may even argue a higher expectation ought to be applied for the banking industry. The Bank has actively worked towards reinforcing this objective over the years. The Bank believes that when the right set of fundamental principles is followed, it can positively shape the 2/4  BIS central bankers' speeches  actions and behaviour of people. Therefore, the Bank, in consultation with the industry, is due to publish five universal ‘Principles for a Fair and Effective Financial Market'.

A sharp pick-up in the rate of growth of the money supply in 1995 provided an early indication that demand growth was likely to accelerate. And money supply growth has remained strong throughout the whole of the past year. Faster growth of consumer spending became evident in the first half of 1996 and has been sustained. And from the middle of last year this began to feed through into output - which was initially held back, and is possibly still being affected by a run-down of stocks. Now the fact is that no-one can tell you with any great confidence just when the increase in demand is likely to begin to create economic imbalance and spill over into rising inflation. But we can be reasonably certain that money supply growth at around 9-10% a year, as we have seen it now since the beginning of last year, and growth in consumer spending at nearly 4% a year, as we have seen over the last year, cannot be sustained for long consistently with the Government’s inflation target in the medium term. And there are signs in the recently more rapid tightening of the labour market and in the gathering recovery in the housing market, for example, that demand may be strengthening. BIS Review 5/1997  -2-  That, essentially, is why the Bank has been arguing that we will need at some early stage a modest pre-emptive tightening of monetary policy.
Lastly, specific remunerative arrangements have also played a significant role in encouraging short-termist behaviour. One rather controversial novelty, especially in investment banks, has been to introduce ceilings on and restrictions to credit institutions’ remunerative policies, the aim being to correct or, at least, mitigate certain perverse incentives. Supervisory changes Yet despite all these regulatory changes, we must be aware that no rules can stand in for proper supervision. The role of supervision remains essentially the same: it is preventive. It is usually said that July and August forest fires are controlled and extinguished in the preceding months of March and April. At this earlier time, scrub is cleared and firewalls are set in place, enabling the future advance of the flames to be controlled. If the homework is not done in the spring, we pay the consequences in the summer. Likewise, the fundamental role of the supervisor is to prevent. This means ensuring that, during upturns in the economy, the lending granted by banks has been correctly analysed and its price set so that the risks assumed are covered. That prevents excessive growth in lending that may lead to bubbles emerging. Sadly, one of the lessons from the crisis is that our ability to act as supervisors is limited once the banking crisis has broken, and the solutions are always costly and painful. New perspective: macroprudential supervision So far I have referred to the so-called microprudential perspective of supervision.

8  When the Desk conducts a reverse repo transaction, it sells securities held in the System Open Market Account (SOMA) under an agreement to repurchase the securities at a predetermined price. The difference between the sale price and the repurchase price, together with the length of time between the two legs of the transaction, implies a rate of interest (the reverse repo rate) paid by the Federal Reserve to its counterparty. The transaction leaves the size of the SOMA securities portfolio unchanged but shifts some of the liabilities on the Fed’s balance sheet from bank reserves to reverse repos while the trade is outstanding. A repo (as opposed to a reverse repo) is the opposite. Before the crisis, repos were more common than reverse repos. The eligible collateral for the Desk’s repo and reverse repo operations is set forth in the FOMC’s Authorization for Domestic Open Market Operations. 9  Autonomous factors are those components of the Federal Reserve’s balance sheet that affect reserve balances but are not directly under the central bank’s control. The largest of these, by far, is currency in circulation. Others include U.S. Treasury deposits, Federal Reserve Bank “float,” and overnight reverse repos conducted with foreign central banks. See, for example, Hilton (2008). 10  The 2005 speech by then-Governor Bernanke that I noted earlier provides great detail on a day in the life on the Desk prior to the financial crisis.
When I joined in 2001, the output gap concept which underlay the MPC’s judgements was a short-run estimate of the difference between the present level of output and full capacity (full capacity was defined as currently employed labour and capital being utilised at normal levels). This implied that there was also a medium-term output gap in which capacity was measured assuming employment was at its natural level. 6 During 2003, the MPC’s thinking moved on to estimate potential output as what would be produced at the natural rate of employment with normal levels of factor utilisation (average hours, labour productivity and capital utilisation all at trend). 7 In 2004, some modification of this concept was introduced in order to account better for the impact of the government sector during a period of rising public spending. The government sector’s impact on aggregate demand is most appropriately assessed by considering the government’s demand for private sector output and the opportunity costs of employing labour in the government, rather than the market sector. During periods of rapidly rising public spending, this tended to increase estimates of the level of activity in the economy, and so reduce the level of spare capacity. 8 A subsequent judgement was made in 2007, to use the NAIRU, or short-term measure of equilibrium unemployment, rather than the longer-term natural rate in assessing present capacity pressures.

These generally did not foresee the periods of strong house price increase in the first half of the 2000s. This suggests that there could have been some offsetting error, and in terms of the underlying assumptions used by the MPC one candidate is a frequent overprediction of  6  Bank of England (2000). 7  Harrison et al (2005). 8  Hills et al (2005) sets this issue out fully. BIS Review 27/2010  3  growth in earnings. It would not be right to suggest that this had automatically led to a systematic overestimate of inflationary pressure, since, as explained above, the published projections are also based on overall MPC judgements. But it is notable that despite frequently-expressed concerns by the MPC about periods of higher inflation leading to higher wage inflation, the relationship between earnings growth and RPI has become weaker over time. Chart 2 does not suggest a consistent relationship. Indeed, since 1995 the correlation between RPI (lagged by one quarter) and average earnings has been just 0.3, compared with 0.8 over the 1977–95 period. These comments on the past, however, clearly do not exhaust the range of potential uncertainties about the size and interpretation of the output gap. These include mismeasurement in the data, incorrect calibration of the relationship between demand and supply, and changes in the implications for inflation of any particular estimate of excess capacity. How might these difficulties affect the outlook at the present time?
The effective implementation of the acquis communautaire is not only a  8  BIS Review 2/2003  legal prerequisite for accession to the EU. It also implies the effective transformation of accession countries’ economic framework, which should facilitate their integration into the EU and, later, the euro area. In this context, it should be ensured that there is no discrepancy between the central banks’ formal status in the legislation and the implementation of that legislation. It is of utmost importance that all present and future Member States respect this economic and institutional ground rule of the European framework. –  Sixthly, let us not forget the present and future contribution of Central and Eastern European countries to the economic prosperity of Europe at large. It seems that this contribution might be sometimes underestimated, while the relative influence of the US economy, for instance, might be sometimes overestimated. In fact, transition economies, as a whole, are as important as the US in terms of external demand addressed to the euro area: they both enjoy the same share, i.e. 13% of our exports. And, during the last two years, transition economies contributed for two-thirds to the overall growth of our total external demand, while the US contributed for less than 0.1%. More generally speaking, Central and Eastern Europe countries are already major contributors to the overall growth on the European continent. In 2001, despite the international context, they remained at quite high a level of growth, around 2.8%.

The development of cheap and innovative digital payment solutions is leading to a decline of the use of cash in transactions, and an increase of cashless payments, which leads to a wider use of commercial bank money. Besides, our European ecosystem has become critically dependent on non-European players – already major global card-schemes, and more and more Bigtechs – with little control over business continuity and data protection. Meanwhile, the development of crypto-assets and socalled “stablecoins” aims to create a new category of settlement assets. Stablecoins may compete against both commercial and central bank money, even though they do not offer the same guarantees in terms of credit risk, liquidity, service continuity, and neutrality. Indeed, current digitalisation triggers at least two important risks: (i) the risk that BigTechs will build private financial infrastructures and “monetary” systems, competing with the public monetary sovereignty; and (ii) the symmetric risk that some jurisdictions judge that the only way to respond to the overwhelming private payments’ wave would be to issue and spread on a domestic but also a global basis, “their” CBDCs (Central Bank Digital Currency). 2/4  BIS central bankers' speeches  I already called – including here at Europlace – for a holistic European payments strategy. The good news is that in the last months we made decisive progress in designing it, thanks to the commitment of the Commission and the ECB. Christine Lagarde as President, and Fabio Panetta as Board’s member in charge of payments changed the game through their personal involvement.