samchain/econo-pairs-v1 huggingface dataset:
Exports to EU and EU’s Final Domestic Demand 15  160 EU's Final Domestic Demand (billion €  14  140  Exports to EU (2010=100, right axis)  13  120  12 100 11 80 10 60  9  2017*  2015  2016*  2014  2013  2012  2011  2010  2009  2008  2007  2006  2005  20 2004  7 2003  40  2002  8  * Forecast. Source: Eurostat, IHS CBRT. 4  Another factor that will lead to an improvement in exports and current account balance is the depreciation of the Turkish lira. As of January, the real effective exchange rate index has fallen to 88.2, which is the historically lowest level in the past 15 years (Figure 7). The most recent data show that export growth has been outpacing import growth and we expect this picture to become more evident during the first half of 2017. Figure 7. Real Effective Exchange Rate (CPI Based, 2003=100) 140  130  120  110  100  90  01.17  01.16  01.15  01.14  01.13  01.12  01.11  01.10  01.09  01.08  01.07  01.06  01.05  01.04  01.03  80  Source: CBRT. Regarding external finance, current account deficit is financed predominantly by FDI flows and long term borrowing (Figure 8).

When the building was planned and constructed during the early part of the twentieth century, the gold was seen as a real vulnerability. It was conceivable that someone would try to rob the Bank and steal the gold. The only time that’s happened was in the Bruce Willis movie Die Hard 3, which, to be clear, was only a movie! A lot of that owes to the skill of the architects of the building, and the law enforcement who protect it. But the other reason is that the risks we face today in 2019 look very different to the ones we were planning for in 1921. For a thief today, it’s easier to use a laptop to buy some stolen credit card details online and commit fraud than it is to plan a Hollywood-style bank heist. And that’s what I’m going to say a few words about—the changing nature of risk—before handing over to this evening’s keynote speaker, John Dugan, Chair of Citigroup. In previous decades it was easier to identify risk and what to do about it. You could see it, measure it, and fortify against it. But, as the world has changed, so have the risks that demand our attention and our resources. The new risks are harder to predict and inherently ambiguous: Steel and concrete can do little to protect us. Our reliance on technology means we need to think differently about cyber risk. The importance of innovation and intellectual property means we need to look for new approaches to talent and culture.
"Measuring the Natural Rate of Interest," Review of Economics and Statistics 85, no.4 (November 2003): 1063-70.

Of this, about a quarter have piloted or are preparing to pilot their solutions in the sandbox, with some already having graduated to offer their solutions in the broader financial system. The insights gained have led to adaptations of existing regulations as well as the development of new frameworks for firms that exit the Sandbox. They have also informed the Bank’s thinking on regulating innovation, with lessons taken in the development of the digital bank framework which will be issued for consultation very shortly. The idea of the sandbox has since been replicated internally within the Bank as an avenue for staff to prototype new solutions that will improve the way the Bank works. This includes new technological applications in regulation and supervision, surveillance, data analytics, communications and in the delivery of the Bank’s public services. The third imperative has been to ensure alignment in the Bank’s governance and culture with our digital objectives and priorities. At the Bank, we are keenly minded that it’s the people and the risk culture, or “the way we do things around here” that ultimately matters. 2/4  BIS central bankers' speeches  This arguably remains the most difficult part of our journey. Digitalisation is driving disruption, and the digital world is inherently complex – in its logic, design, development and delivery. We have put in place strengthened and more integrated governance arrangements to direct our digital strategy, policy and standards.
My own interpretation was that this guidance helped to signal the greater dependence of policy on the labour market, at a time of greater uncertainty about supply. Whatever one’s view, it’s clear, I think, that this was not designed to engineer above-target inflation – nor was 7% unemployment a hard trigger for a rate rise (it was only a necessary pre-condition). In February 2014, the Committee commented about future policy in the context of a low “neutral” rate of interest. While the MPC would always in practice do what was necessary to keep inflation stable over the medium term, it was unlikely that this would require interest rates to rise to levels seen in the first few years of inflation targeting (let alone the 1970s and 80s). What might then have counted as a “loose” level of interest rates could now be “tight”. However, we were conscious of the risk that people might see this as some sort of commitment to keep interest rates low, come what may – it wasn’t that – and therefore added that, whatever one’s expectations, actual policy would depend on the economic outlook at the time: “The actual path Bank Rate will follow over the next few years is, however, uncertain and will depend on economic circumstances. Bank Rate may rise more slowly than expected, and increases in Bank Rate may be reversed, if economic headwinds intensify or the recovery falters.

I’m not sure it would cut much ice with parliament’s Treasury Committee if I said I was voting not on the basis of what was going on in the economy right now but instead because of some guidance a few years ago by an earlier MPC. The interpretation of guidance and the potential costs of mistaking the conditional as unconditional I picked out a moment ago a couple of key bits of guidance by the MPC. There were several others. But all of them contained the message that the outlook for interest rates would be dependent on that for the economy and inflation at the time. However, I think it’s clear from the reaction to these episodes that the points we were trying to get across – including this critical point about conditionality – were not universally understood. One particular problem was that, in response to the September 2013 guidance, many commentators appeared to see the 7% unemployment threshold as a sufficient, not just a necessary condition for the tightening policy. We would apparently be “forced” to raise interest rates if unemployment fell below this level, whatever the outlook for inflation at the time. As for the general point about conditionality, it was only two days after the February 2014 Inflation Report that the BBC said: “What is forward guidance?
We have come a long way from the time when the first two heads of the IMF were Swedes. It is against this background - our weaker international position - that we should evaluate the importance of becoming full members of the European cooperation. Globalisation has strengthened the significance of the European Union. Of course, I can make direct contacts and conduct a dialogue with my colleagues in, for instance, South Africa or Argentina, and argue for a particular line in an international economic policy issue, which I actually often do. They listen to my arguments, but when it really comes to the crunch on an important and sensitive issue, they always wonder what Europe thinks. To an increasing extent - and here there is a tangible difference compared with ten years ago - countries in other parts of the world are regarding Europe as a whole unit. Thus, if we do not have a strong influence in Europe, we will not be heard very far. The discussion of influence focuses too much, in my opinion, on the value of sitting on the ECB's Governing Council and determining interest rates. Of course, as members we would do all we could to ensure this functioned well, but there is no opportunity here to take into account specific Swedish interests; the rates are set for to the good of Europe as a whole. More important from a Swedish perspective would be the discussions on developments in and regulation of the financial system.

Is EMU membership important for Sweden to gain influence? Finally, I intend to discuss what I personally consider to be the most important aspect of the EMU issue - how Sweden's opportunity to take responsibility and exercise influence in an international economic policy context will be affected by the result of the referendum. Here I am speaking not primarily as Riksbank governor of six months but on the basis of my experiences over almost 20 years, as civil servant in the Ministry of Finance under three finance ministers and later as deputy governor of the Riksbank, representing Sweden in numerous international forums. My first reflection concerns Sweden's influence now, compared with before. As I see it, Sweden's influence has declined considerably, which is not always made clear in the general debate. The most important reason for this erosion of Sweden's position is that we, as I mentioned earlier, have declined in economic strength in relation to almost all of the other industrial nations. In addition, there is a more positive aspect here, namely that a number of former developing countries have made considerable economic progress and are now important players in the international economic policy game. The result is that we now sit at fewer decision-making tables than at any other point during the post-war period and we carry less weight at those tables where we have retained a place. One expression of this is that an ever-declining number of Swedes now hold central positions in economic policy and financial contexts.
Inflation was projected to stand at 1.2% in 2019 and, following a notable downward revision of 0.4 percentage points, 1% in 2020. In 2021, inflation is expected to stand at 1.5%, clearly below the monetary policy target. These developments have been accompanied by a reduction in long-term yields on sovereign debt markets, which have reached historic lows in most euro area countries and in the United States, as a consequence of the weakness of the macroeconomic environment and market expectations of the central bank response to this scenario of reduced economic momentum. In short, the macroeconomic context is characterised in the euro area, first, by a downward revision to growth forecasts, which were already relatively weak, which remain subject to downside risks, owing to the persistence of trade tensions and other geopolitical 4/13  uncertainties, such as those relating to the final outcome of Brexit, and which in some countries of the area even point to a risk of imminent recession; and second, by mediumterm inflation projections that have also been revised downwards and are well below the levels that could be considered compatible with the ECB’s price stability mandate. The measures adopted by the Governing Council of the ECB at last week’s meeting should be understood against this background.

The latest information shows that global activity slowed across the board in the second quarter and the highest frequency indicators point to persistence of this weakness over the coming months. Meanwhile, the decline in world trade appears to have steepened, against a background of heightened uncertainty regarding the trade policies of the United States and China and intensification of geopolitical risks. Although the decline in activity has been particularly strong in manufacturing, the slowdown in recent months in the global services output PMI, which remains in expansionary territory, is indicative of an increase in the risk of a greater slowdown in global activity. Given its degree of openness and the existence of certain idiosyncratic factors, the euro area economy has been one of the most affected by these international trade developments. Specifically, there was a significant slowdown in the euro area from the beginning of 2018, mainly due to the sharp moderation in its exports. As a result, in 2018, GDP grew at an average rate of 1.8%, 0.7 percentage points less than in 2017, while year-on-year growth fell to around 1% in late 2018 and early 2019. The latest information shows that euro area GDP growth in the second quarter, adversely affected by export weakness and sluggish investment, was only 0.2% quarter-on-quarter, down from 0.4% in the first quarter. By contrast, private consumption continued to grow, driven by the relative strength of the labour market. On the supply side, industrial activity contracted in this period, while services continued to behave more favourably.
We announced the outline of the monetary and exchange rate policy for 2015 through a press meeting on 10 December 2014. We also launched new macroprudential policies to limit macro-financial risks and to support prudential borrowing at this meeting. In this scope, to encourage the extension of maturities of external borrowing, we raised the required reserve ratios applied to non-core foreign exchange (FX) short-term liabilities of banks and financing companies. Additionally, we embarked on the remuneration of TL required reserves to encourage core liabilities in January 2015. Moreover, we implemented technical adjustments in reserve option tranches and coefficients to meet the FX liquidity to be required due to the changes in required reserve ratios. We envisage that the automatic stabilization feature of the Reserve Option Mechanism (ROM) will gain strength with these adjustments. Through these policy measures we announced, our final aim is to limit macrofinancial risks and contribute to balanced growth by supporting prudential borrowing. The rate of increase in the loans extended to the non-financial sector in the last quarter of the year maintains a reasonable course owing to the CBRT’s tight monetary policy stance and the macroprudential measures. Supported also by the actions of the Banking Regulations and Supervision Agency (the BRSA), consumer loans grew slower than past years, while commercial loans displayed a higher rate of increase (Charts 7 and 8).

According to the GDP data of the third quarter of 2014, economic activity was relatively weaker compared to the outlook presented in the October Inflation Report. In the third quarter, the GDP rose by 1.7 percent on an annual basis, while growth remained limited compared to the previous quarter with 0.4 percent (Chart 13). Analysis of national income components on the production side indicates that the contraction in agricultural value-added led by adverse weather conditions is an important factor in the low growth of the national income (Chart 14). Data on the expenditures side reveal that in the third quarter, final domestic demand compensated for the fall in the first half and stood slightly above its level in the last quarter of 2013 (Chart 13). Following an interval of two quarters, private consumption expenditures recorded a robust recovery. In addition, the languishing trend in private investments, which lasted for a long time, reversed due to the increase in machinery and equipment investments. These two factors supported quarterly growth. However, the relatively weak course of exports limited the growth in this period. We expect industrial production, which fell below its previous-quarter average during October-November 2014, to decrease on a quarterly basis in the fourth quarter in line with the decline in December’s PMI and BTS survey indicators. Yet, data for the fourth quarter of 2014 point to a quarter-on-quarter pickup in consumer demand, a moderate course in machinery-equipment investments and some recovery in construction investments.
The Fund’s chief weapon is persuasion, exerted through a combination of channels: private advice, peer pressure, and public debate. But is this enough? Excellent analysis can frame the issues that policy makers focus on; and it can shape and inform the public debate, domestic and international, that leads to action. Ideas and analysis, widely and wellcommunicated, can be very powerful in the modern world, especially in the largest democracies. As Keynes reportedly remarked ‘Ideas shape the course of history’. The Fund can also facilitate dialogue between countries on issues where unilateral or even bilateral decision-making may not be the best way forward. On the biggest global issues, policies need to be designed with some depth of understanding about how others will act. But ultimately much turns on members’ confidence and trust in the Fund, and on the depth of their continuing commitment to its original first purpose: ‘to promote international monetary co operation through a permanent institution’. The support and commitment of those countries whose policies have the greatest impact on the world economy is clearly critical. So the Fund’s ability to shape and facilitate the debate is intimately bound up with its legitimacy. All countries need to feel they have a real stake in the governance of the Fund and an effective voice in shaping its activities and the decisions taken by its Board. This is why the governance agenda is so important and why there is a close link between the surveillance agenda and the second stage of quota reform.

The financial equivalents include trust and pension funds, Christmas Clubs and pre-nuptial agreements. Some economists have called these “golden egg” investments – investments which cannot be realised quickly, so that temptation is constrained. 44 Pre-commitment can also work for non-financial contracts. For example, job contracts could be based on longduration performance measures. These contracts may require a public policy “nudge”. 45 For example, savings schemes might require people to opt out rather than opt in. (d)  Institutional arrangements, and policy frameworks, are another such pre-commitment device. They are a means of resisting the temptation to place shortover long-term policy objectives. Government’s policy preferences, which are derived from people’s preferences, can be hyperbolic too. That is the essence of the policy time-consistency problem. A solution to that problem is to delegate policy to a patient, low discount rate agent. Because central banks have very long horizons, they fit the bill. Increasingly over the course of the past century, central banks have been chosen to safeguard the long-run objectives of price and financial stability, as a means of leaning against short-termist temptations. 42  The Aspen Institute (2009). 43  For example, Securities and Exchange Commission (2010). 44  Laibson (1997). 45  For example, Thaler and Sunstein (2009). BIS Review 114/2010  13  To illustrate some of the benefits of pre-commitment and long-duration investment, imagine having placed that $ stake in 1967 with an investment firm whose motto was “our favourite holding period is forever”.
A bank can also profit if it is more competent than its competitors in some areas, for instance in offering certain services or if its organisation runs smoother and more efficiently or if it is regarded as being more reliable or customer-friendly than other banks. For various reasons, Swedish banks have rapidly gained market shares in other markets. It has proved more difficult for foreign banks to gain inroads into the Swedish market, with the exception of the Danish bank I mentioned. The main challenge from cross-border operations comes from the new risks to the bank. It will start operating in a new legal environment and in a new customer market. If the bank has not prepared itself carefully, it may run into unexpected problems because it approaches the new situation in an erroneous way. A challenge for the cross-border banks as well as the authorities is to monitor the activities on a consolidated basis for the whole bank group in all countries where it operates. It is important for the head office and the supervisor to identify early any indication of problems in the entities abroad and to take the necessary measures. If this does not take place, the problems may grow and threaten the  4  BIS Review 111/2006  survival of the bank. In a crisis situation, the bank together with the authorities must decide on the appropriate course of action. This can lead to difficult questions such as whether a bank branch or subsidiary abroad should be closed or rescued.

William C Dudley: Why financial stability is a necessary prerequisite for an effective monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Andrew Crockett Memorial Lecture, Bank for International Settlements 2013 Annual General Meeting, Basel, 23 June 2013. *  *  *  This panel is entitled Monetary Policy and Banking.1 That takes in a lot of territory. Rather than try to cover the waterfront, I am going to start with a single premise: Financial stability is a necessary prerequisite for an effective monetary policy. There is a critical chain of linkages from monetary policy to banking and onwards to the real economy. Financial stability is a necessary condition for those linkages to operate effectively. Thus, it is a necessary condition for monetary policy to be able to achieve its economic objectives. I will then outline briefly what I see as some of the major implications that stem from that premise. These include that the central bank has a major role to play in ensuring financial stability and should evaluate the stance of monetary policy in light of problems in the financial system that may impair the monetary policy transmission mechanism.2 In my mind, the biggest lesson of the financial crisis has been that monetary policy cannot work properly when there is financial instability. When financial instability occurs, it disturbs market functioning and can also impair bank balance sheets.