samchain/econo-pairs-v1 huggingface dataset:
At this point, I would like to emphasize that we will continue to take the necessary measures to contain the adverse effects of the global financial turmoil on the domestic economy, provided that they do not conflict with the price stability objective. The general framework of the Central Bank’s liquidity management is fairly flexible and wellstructured to fulfill its lender-of-last resort role and meet both New Turkish Lira and foreign exchange liquidity requirement of the banking system effectively. We will not allow any setback in New Turkish Lira money markets and will ensure smooth operation of payment system. In this context, judging that inflation will display a more rapid fall than envisaged before, the Monetary Policy Committee has decided to lower the borrowing rates by 50 basis points on November 19, 2008. In addition, the margin between the lending and borrowing rates was reduced by a further 50 basis points in order to contain the potential volatility in short term interest rates. Dear Guests, The Central Bank of Turkey is aware of the significance of foreign exchange liquidity in the banking system and progressively puts into effect necessary measures in order to get through this period with minimal damage. Accordingly, the Central Bank resumed its activities as an intermediary in Foreign Exchange and Banknotes Markets as of 9 October 2008 and later raised transaction limits in the Foreign Exchange and Banknotes Markets to USD 10.8 billion.

Durmuş Yilmaz: Globalization and monetary policy Speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the conference on “Globalization, Inflation and Monetary Policy”, Istanbul, 21 November 2008. *  *  *  Dear Guests, I would like to welcome you all to the conference on “Globalization, Inflation and Monetary Policy”, organized by the Central Bank of Turkey. This conference will host a select group of central bankers, experts and academics today and tomorrow. It is a great pleasure for us to host this conference and such a distinguished group of participants. During these two days we will have the opportunity to discuss the globalization and monetary policy aspects in the context of current financial turmoil. Dear Guests, We have in the midst of fast changing economic agenda. When invited to an international conference in the Spring of 2008, I was requested to make a speech on inflationist pressures faced by world economies. The title of the session was “Inflation: Is it back to stay?”. In Fall 2008, a few weeks before the start of the conference, the organizers informed me that they had changed the theme of the conference. The new title was “How to cope with deflationary risks?”. In a very short span, the main talking points of the policy makers have shifted from “decoupling”, “high energy prices” and “food inflation” to “deflation”, “recession” and “credit crunch”. Today, international financial system shaped more and more by globalization is on the brink of a crucial stage.
We are happy that during the recent years, our financial sector has also improved in every respect. This is clearly evident when we look around the financial institutions, financial markets and the developments in financial infrastructure. Within the last five years, assets of the licensed banks in the country doubled. Altogether, there has been an addition of over 400 branches of these banks. Other financial institutions including Registered Finance Companies, Leasing Companies, Insurance Companies, Merchant banks, Venture capital firms and Unit Trusts have also grown in sympathy with the banking sector. At the same time, we have also progressed rapidly in the financial infrastructure developments as well. This is particularly visible with the leap forward in the Payment System development as evidenced by the implementation of a Real Time Gross Settlement System in 2003. Now, 84 per cent of the value of country’s payments are settled through the RTGS system. In 2006, we completed the Cheque Image Truncation project, reducing the maximum cheque clearance time to 2 working days, which is another significant achievement. The Colombo Stocks Exchange remains one of the most technically advanced stock exchanges of the world. Soon, we will also have a SWIFT Service Bureau in Sri Lanka and that will help to reduce cost of financial transactions. Together with these infrastructure developments, our banking system has expanded their horizons by introducing several innovative infrastructure facilities and complex financial products as well.

Another significant factor for Switzerland is the marked improvement of the economic situation in Europe, in particular in Germany. For 2006, growth forecasts in our neighbouring countries have been gradually revised upward; for 2007, development is expected to be more muted. Economic activity in the United States, however, has slowed at a somewhat faster pace than anticipated. In 2007, the US economy is set to expand in the area of potential growth again. Asia will continue its dynamic growth pattern. Economic situation What does the situation look like in Switzerland? As anticipated at the last monetary policy assessment, the economic situation has continued to improve. It is both balanced and broadly based. As the latest employment figures reveal, the momentum in the economy has spilled over into the labour market. A great many new jobs were created in the third quarter, and unemployment continued to decline. The number of gainfully employed persons rose by approximately 100,000 from Q3 2005 to Q3 2006. The unemployment rate is likely to fall below the 3% mark at the beginning of 2007. The brighter outlook on the labour market has improved job security and strengthened consumer confidence. Expenditure by private households is soaring. Companies appear upbeat as well. Many  BIS Review 123/2006  1  industries, such as manufacturing, construction and the hotel trade, report full employment. According to our assessment, this translates into unchanged growth in real gross domestic product (GDP) of just under 3% in 2006. For 2007, we predict a decline in economic momentum.
If this analysis suggests that monetary developments are a threat to future price stability, monetary policy will respond in a manner appropriate to counter this risk. In parallel with the monitoring of monetary aggregates, the ECB also pays close attention to various other indicators which may signal inflationary risks or tensions: this is the second pillar of the monetary strategy. Indeed, while inflation is a monetary phenomenon over the long term, it is useful in the short to medium-term to detect those inflationary tensions in the economy - reflected in various real and financial indices - which are not captured by monetary aggregates. With these two pillars and the various indicators, monetary policymaking in the euro area may appear complex, but this reflects the complexities and uncertainties which surround the transmission mechanism of monetary policy in modern economies, and, even more so, in the new economic environment created by the changeover to the euro. Against this background, the Eurosystem must rely on a whole range of indicators and on a variety of models which help to sharpen and crosscheck the analysis. The efficiency of monetary policy does not rely only on a careful analysis of the monetary, financial and economic situation, but also on the ability to explain monetary policy decisions to the public in a convincing manner.

In this regard, I wish to congratulate the banking institutions for completing the chip-based ATM cards migration, and introducing EMV-compliant credit cards and terminals to combat fraud, a technology leap that was indeed a challenging task. While the conversion of the credit card infrastructure to be EMV-compliant is an ongoing effort, I wish to commend the industry players, the issuers, acquirers and the affected merchants, particularly the petrol industry, for their positive response towards meeting the migration deadline. Ladies and Gentlemen, The desired migration to an electronic payments environment will not only be engineered through secured system architecture and active promotional programmes, but also induced by greater transparency. Banks need to be more transparent in the delivery and pricing of financial services, and highlight the underlying motivation and activities that banks undertake in prescribing financial services. Pricing will affect consumers’ preference and behaviour. In this regard, banks need to understand their own cost structure and price the payment services accordingly, to provide the incentive for the shift to electronic payments to take place. To foster greater efficiency in the payments system, its charges relative to other means of payments need to be structured accordingly to encourage greater use of the electronic channels as the preferred mode. These moves also need to be complemented with ample provision of electronic payment methods that are comparable to the other means of payments in terms of its reach and convenience.
Against this background, the fact that inflation in the euro area remained persistently below the ECB’s target level during the period that ran between the global financial crisis and 2020 made clear that a comprehensive review of our monetary policy strategy (which was last revised in 2003) was appropriate. 2  To understand why inflation in the euro area remained below target for more than a decade, despite the fact that the ECB maintained a rather accommodative monetary policy stance, one must necessarily take into account the secular decline in the natural interest rate and the limitations that such a decline imposes, through the interest rate lower bound, on the conduct of monetary policy. The equilibrium or natural interest rate (r*) is defined as the real interest rate that simultaneously maintains output at its potential level and inflation stable at its target level. This rate, which cannot be observed directly, can only be estimated, with some degree of uncertainty, using econometric techniques. According to available estimates, the natural interest rate appears to have progressively declined in recent decades in advanced economies and, in the case of the euro area, estimates even place it at negative levels.1 This secular drop in r* is attributed, among other factors, to the decline in trend productivity growth, certain demographic developments and widening inequality. All of these are factors that will have changed the balance between the supply of savings and the demand for investment. And, why is this important for monetary policy? Well, the answer is clear.

It is important to realise that once the crisis has occurred, the losses cannot be hidden and must be dealt with in one way or another. In this respect Swedish institutions worked well. Party politics were clearly separated from business realities. And the politicians did a good job, realising that bygones were bygones, setting up a fair framework to sort the crisis out. From a political perspective it was important that the banks’ owners were not rescued. People at large had to take substantial cuts in living standards - at least temporarily. Letting the “big guys” go unhurt under these circumstances would have jeopardised the whole operation. 4. The macroeconomic policy mix for crisis management can differ. In our case, there was obviously not much room for fiscal stimulation of the economy. Considering the much lower BIS Review 65/1998  -7-  public debt, there could be more room in some Asian countries but the potential budget effects of the financial losses also need to be taken into account. Monetary policy has a difficult dual role: it has to strike a balance between stimulating the economy so as to ease the burden on the banks and on their borrowers and at the same time ensuring the capital inflows that are needed to rebuild the depleted foreign currency reserves. 5. On top of this - and perhaps the most important factor - there was political consensus. The government sought and received backing from the main opposition party.
•  And when subsequently questioned by their superiors or regulators, they offered an array of self-justifications, chief of which is “everybody does it”. But everybody does not do it. I believe the vast majority of people working in the financial industry are committed to serving their clients or customers fairly and with integrity. But the unethical actions of a few have undermined trust and created instability. Reform of the financial industry will not be complete until this issue of trust and ethics is addressed. This requires “getting the culture right”. And by culture, I mean the shared values, attitudes and norms that guide actions. There is increasing international regulatory guidance to improve risk governance and align compensation schemes with long-term sustainability and customer interests. This is necessary but not sufficient. There are limits to what externally imposed rules can do to promote the right values in financial firms. •  Because culture develops from within a firm, it invites a certain resonance from the members of that firm – in a way that will be difficult for an externally imposed set of rules to achieve. •  For the same reason, the behavioural norms that a firm’s culture and value system promotes are more amenable to internal governance and self-policing than rules that rely on external enforcement. In short, rules tell us what we can do, but values tell us what we should do.

Compensation structures must motivate not only high performance but also high ethical standards. •  Some jurisdictions have placed restrictions on bonus payments – how much can be paid or over how long a period. MAS has put in place rules and guidelines that are consistent with the Financial Stability Board’s principles for sound compensation practices. They require the compensation of a bank executive to be aligned with not only the risks that the bank undertakes, but the time horizon of those risks. But we have chosen not to cap bonus payments or be overly prescriptive in our rules. Such measures may have unintended consequences or could be easily circumvented. Instead, MAS has stepped up its supervisory intensity of financial institutions’ overall compensation policies and practices. •  We assess the effectiveness of the firm’s compensation system, its relationship with the firm’s governance framework, and its impact on risk-taking behaviour. •  We intend to conduct deeper-dive reviews, to examine how a firm makes compensation decisions in practice, as well as the extent to which the firm’s board and management deal with issues relating to compensation and risk culture. A second area of focus is fair dealing: are firms dealing fairly with customers? MAS has issued guidance on fair dealing principles and outcomes that financial firms should achieve. •  We assess whether the board and management have put in place initiatives to foster a corporate culture of fair dealing.
A quick pace of rate normalisation also creates a safety buffer to tackle possible disruptions in the markets that may ensue as the balance sheet of the Eurosystem is gradually adjusted to the new macroeconomic environment. Indeed, while policy rates currently represent the primary tool to normalise monetary conditions, their interaction with the balance sheet of the central bank matters to gauge the overall degree of monetary support to the economy. In conclusion decisiveness in tackling high inflation must come with the flexibility to address the possible side-effects from policy normalisation. Fiscal policy should be deployed to support the most vulnerable by means of targeted and temporary measures so that central banks' effort to restore price stability is not jeopardised. At the international level, there is scope for greater cooperation to prevent financial stability risks from materialising and to bring inflation down without jeopardising economic and social development. Thank you for your attention. 4/4  BIS - Central bankers' speeches

Meanwhile, our decisions have to rely on as much as possible sound basis. Drafting the confidence indices, as indicators of economic expectations, does not substitute the lack of statistical information on the current situation of an economy. These indices enable monetary markets and authorities to rearrange in time the strategies that preserve balances of related goals. Confidence indices enable a central bank adjustment of monetary policy stance in the right time in order to preserve price stability, while the economy grows at a potential pace. The developed countries are in frontward regarding the preparation of confidence indices as indicators of expected performance of the economy. Integration of the markets and the globalizing process increase the necessity of preparing these indices in our region, because the objective of monetary policy, the price stability, reflects stability and economic openness towards regional countries and further. It has already been 4 years that Bank of Albania has started the evaluation of business and consumer confidence indices. These surveys are being run on a quarterly basis, with the help of INSTAT, and involve over 600 businesses of production, construction and services sectors and about 1500 consumers. The information collected covers the performance of prices, consumption, income, production, employment, investments and some other indicators, which support the decision-making on the monetary policy stance. In this important process, the Bank has from the beginning been assisted by the experts of Ifo Institute for Economic Research, witch is internationally renown in the field of business confidence indices.
At the same time and not withstanding their role in increasingly integrated global value chains, growth in imports has been sluggish, meaning that net trade has provided support to GDP growth. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Taking all of these together leads me to conclude that, although the resilience of growth in the wake of the referendum has been welcome, the broad channels through which we would have expected demand to adjust to a vote to leave the EU are now operating. As a result, GDP growth has slowed from average quarterly rates of 0.7% in 2014 and 2015 to 0.4% more recently. For those of you who, like me, have had to assess and categorise past UK slowdowns as either U- or V-shaped, I consider what we are witnessing as more of a saucer-shaped slowdown and pretty unusual for that (Slide 6). Given the long horizon over which the effects of Brexit could play out, we are likely to be on the flat part of the saucer for some time – as embodied in the MPC’s forecast for GDP growth which remains at 0.4% per quarter over the 3-year forecast horizon, conditional on households and companies basing their decisions on the expectation of a smooth adjustment to new trading arrangements. If realised, that will leave the economy about 2% smaller by 2020 than the May 2016 MPC forecast would have implied.

A second potential explanation for how the supply side data have evolved is that since the referendum workers have responded to uncertainties about the outlook by showing even more flexibility in their wage demands. People’s willingness to accept lower real wages would encourage firms to hoard labour, and shift away from capital expenditure toward more labour input for a given unit of output. Such a further increase in labour market flexibility would imply that part of the recent renewed weakness in productivity growth is cyclical, meaning there is a bit more room for the economy to grow without generating above-target inflation in the medium term. I attach some weight to the idea that workers have responded to the changing outlook by showing greater flexibility in their wage demands. This would be consistent with a trend I have observed throughout my career and in successive cycles in which peaks and troughs in unemployment have been lower in each cycle since the 1980s. Since the crisis, real wage flexibility has been particularly notable, and it may have intensified further since the referendum as the unemployment rate has fallen further to 4.3%. As supporting evidence I would point to the fact that the weakness in private sector real wage growth relative to the MPC’s May 2016 forecast has been greater than would be required just to match the weakness in productivity 3  growth , and that is in spite of the additional pressure on real income growth from higher import prices over 4  the same period .
The global challenges to the financial system I mentioned at the beginning include rapidly advancing non-bank financial institutions and the emergence of  10  BIS central bankers’ speeches  new types of financial intermediaries. These spell the need for a cross-sectoral approach of the regulator. And, developing such cross-sectoral approaches is one of our priorities. We plan for our tomorrow’s discussion to centre on this first cross-sectoral document of ours – the Guidelines for the Development of the Russian Financial Market. The document is sure to be of interest to representatives of all financial institutions. And, to conclude, I would like to brief you on the current efforts to develop the national payment infrastructure. You will know that this autumn we are launching Mir, the national payment card, full scale. It is essential that this payment instrument is easy to use. Hence our objective to ensure that of all cards it is Mir that would enable the operation of social media applications as developed in many regions. In this connection I am pleased to announce that in a few minutes on this stage the Bank of Russia and the Government of St Petersburg are going to sign the agreement for Mir to operate as a platform for the citizen of St Petersburg card. And that brings me to the end of my presentation. I appreciate your time. Let me wish all of you every success in your endeavours. Presentation by Bank of Russia Governor Elvira Nabiullina  BIS central bankers’ speeches  11

Our calculations also indicate that households with debts on average have a relatively good safety margin for interest rate rises and reductions in income. We therefore do not at present envisage any major problems for the household sector as a whole, even if interest rates rise significantly. However, this does not mean that problems will not arise for individual households in the case of higher interest rates. It is important that borrowers include rising interest rate expenditure in their calculations and carefully consider what level of indebtedness they can manage when interest rates sooner or later begin to rise. For this reason, we have emphasised in connection with our monetary policy decisions over the past six months that interest rates are at present low in a historical perspective and will need to be raised in the long run. With regard to house prices, the calculations we have made so far do not indicate that prices for housing in the country as a whole are substantially unbalanced. The developments can be explained fairly well by factors such as disposable income, living costs, construction costs and the fact that there is relatively little new building, despite strong demand. Supply is expected to increase at a slightly slower rate than demand over the coming years. My assessment is that at present no imbalances have been built up that could risk leading to a sharp fall in prices further ahead. However, the rapid increase in house prices and indebtedness occurring now is something we shall monitor closely.