samchain/econo-pairs-v1 huggingface dataset:
The Inflation Report that we published today shows that the economic and inflation outlook on which the Riksbank based its monetary policy in 2002-2003 was in no way significantly different from that held by other leading forecasters of the Swedish economy during this period. (Figure 3). If anything it seems that the Riksbank was one of the most successful forecasters, or perhaps rather one of the least unsuccessful, although it also has to be remembered that our forecasts, unlike others’, had been based on the assumption of an unchanged repo rate. Part of the recent monetary policy debate has seen our forecasts compared with those of the National Institute of Economic Research (NIER). It turns out, however, that the NIER’s view of the appropriate repo rate path has not differed more than marginally from the Riksbank’s. (Figure 4). On average the NIER recommended a repo rate that was barely 0.2 percentage points lower. Given the effects that one generally expects from monetary policy, inflation in 2004 would only have been marginally closer to the target if we had followed the NIER’s recommendations. Nor would we have had more than a very slight impact on employment. The point is that the differences in opinion regarding future inflation and the stance of monetary policy have been small in relation to the drop in inflation and the rise in unemployment.

It is not because the Riksbank has considered deviations below target to be less serious than deviations above target; instead, it is partly because we have undergone an adjustment from a high-inflation to a low-inflation regime, which affected policy in large measure during the first of those three episodes, and partly because inflation on different occasions has been depressed by supply factors that neither we nor others have been able to predict. Allow me to conclude the retrospective part of this speech by underlining that I value an open, lively debate on monetary policy. I have previously pointed out before the Committee that we would be happy to come here more often and that we are open to other forms of discussion than this one. If the Committee’s members have ideas to improve the material that we present, we would be interested in hearing them. The Riksbank is also considering initiating an annual forum for monetary policy debate, where our assessments and policy can be discussed against the background of regular independent evaluations of the forecasts that we – and other participants in the general debate – have produced. The current assessment Cyclical upswing continuing With that I shall now look forward and briefly discuss the assessment of economic and inflation prospects in our latest Inflation Report and the decision we took yesterday regarding the repo rate. BIS Review 18/2005  3  As usual I shall begin with a brief look at the international situation. Economic growth abroad has remained high.
Such a rise in prices cannot and may not be corrected with monetary policy measures as long as no wage-price spiral is set in motion. First, we do not know whether this price rise is a permanent or merely a temporary phenomenon. Second, the change in oil prices impacts directly on the price level, whereas monetary policy changes act only indirectly and after a considerable time lag. Third, higher oil prices constitute a cost shock that cannot be countered by means of monetary policy. Experience shows that a monetary policy which attempts to counteract the effects of a one-off increase in oil prices on the price level can cause considerable damage to the national economy. Furthermore, it must be noted that the present price increase is modest in a historical comparison. For example, during the second oil price shock at the end of the 1970s, oil cost approximately twice as much as today calculated at current prices. Our interest rate decision of today is thus not aimed at combating the effects of the oil price rise on inflation. The increase in oil prices nevertheless casts a shadow over the prospects for the economy, which are optimistic overall. We are not of the opinion, however, that the upswing is threatened by this. Model calculations have shown that higher oil prices would slow growth in Switzerland only moderately.

By creating the petroleum fund, Norway has managed to save the revenues and keep them separate from its domestic economy. Furthermore, the fund managed by Norges Bank is now seen as a model showing the way for other sovereign wealth funds. 2  BIS central bankers’ speeches  Even though monetary policy in Norway – and Sweden – is geared towards an inflation target, the development of the exchange rate cannot be ignored. It is also worth noting that both the Riksbank and Norges Bank pursue their monetary policy in the shadow of the ECB. Both central banks have to take into ac-count the effects on the exchange rate of its monetary policy, since the value of the krona greatly influences import prices and ultimately inflation. This may imply a monetary policy stance that is not optimal in terms of stabilizing the domestic economy and its financial system. In fact this is one of the main issues in economic policy in Sweden and Norway these days. Central banking is not limited to finding and optimal strategy for monetary pol-icy. What central banks can and need to do is shaped by the developments in the whole world economy, and largely influenced by political circumstances, in-side and outside our own countries. Both formal cooperation and informal ex-changes of ideas is now intense between central banks in many countries, and in particular between Norges Bank and the Riksbank, who continue to face very similar challenges.
The Bank’s primary one is, of course, to ensure that the UK financial system serves UK households and businesses. This includes protecting the UK real economy from being sideswiped by global developments. As much as possible, we must do so in a manner that keeps cross-border markets open. When these responsibilities come into conflict, we have to work with others to build resilience at home and abroad in the most efficient and cooperative way possible. The pillars of responsible financial globalisation eroded prior to the global financial crisis. Regulation became light touch and ineffective. Looming risks in the financial system were ignored. Markets were fragile and unfair, plagued by numerous instances of misconduct and limited market discipline on large firms. And few participants were exposed to the full consequences of their actions as governance and compensation arrangements focused on the short term. 1  For example, Britain accounted for nearly 20% of the world’s manufacturing by the mid-19th century. At the end of the 19th Century, the UK accounted for as much as a quarter of world trade and produced around a tenth of global GDP. Today, those shares have both fallen under 5%. For details on how the historical estimates are calculated, see ‘The UK at the heart of a renewed globalisation’, speech given by Mark Carney, 24 October 2013, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2013/speech690.pdf. 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  The resulting cost to our citizens has been tremendous.

As the Vice Chair of the Supervisory Board of the Single Supervisory Mechanism recently stressed, for example, “both banks and supervisors must prepare for any potential scenario”. 12  12  ‘Introductory statement to the press conference on the ECB Annual Report on supervisory activities 2016’, remarks by Sabine Lautenschläger, Vice Chair of the Supervisory Board of the Single Supervisory Mechanism, 27 March 2017. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Under one scenario, negotiations could result in a new statutory and regulatory regime with a large number of firms – currently either physically based in the UK or providing services within the single market via passporting arrangements – coming directly under PRA authorisation and supervision. In that case, we would need to form our own judgments, rather than relying exclusively on those of others. As our continental colleagues have observed in the analogous case of UK firms operating in Europe, these judgements could affect whether the firm operates as a branch or a subsidiary, as well as the range of services it can supply. Consistent with our current approach, and the PRA’s stance towards non-EEA branches, any judgements would reflect:   the cooperative and information sharing arrangements in place;    our confidence in the standards to which others are adhering; and    any assurances we have on arrangements to address circumstances when things go wrong.
On a conceptual level, digitalization is blurring the frontier between the market and informal economy, and leading to the development of “C to C” services; for example, many of us now directly buy our holidays on-line. This disintermediation of services has been accompanied by a significant improvement in their quantity and quality. Yet, travel services are now in large part ‘home production’, and the measured market value added of travel agency services is declining. On a practical level, with the rise of digitalization, new kinds of services can be imported, notably through e-trade, and the location of activities is less easy to determine. Moreover, the fact that 1/3  BIS central bankers' speeches  these services are not standardized and evolve quickly makes it more difficult to estimate the deflator for service output in national accounting. The concern over output mismeasurement is therefore serious. Yet mismeasurement alone cannot explain all of the slowdown, as it did not suddenly appear in the mid-2000s. 2. Is it also a demand phenomenon? I am very much inclined to say it is. Negative demand shocks are particularly pernicious when interest rates are already low, as there is limited room to spur demand by cutting interest rates. In central banking jargon, we say that short-term interest rates cannot be reduced to the “natural rate”, which is the level where demand equates to potential output and inflation is stabilized.

I very much doubt it given the usual time lags observed in the diffusion of past technologies and the differences in productivity levels between firms. The second type of lag, space-lags, refers to the uneven diffusion of technology across firms. Frontier firms usually enjoy stronger rates of productivity growth than imitators in the same sector. In France, the productivity growth of frontier firms has remained steady – or even increased – throughout the slowdown [slide 7]. This may reflect winner-takes-all phenomena. For example, in the digital economy, due to network externalities, one firm with a marginal comparative advantage can seize the whole market and benefit from the low marginal cost of production of additional units of its product. However, these phenomena may be specific to ICT-producing sectors. Productivity growth in frontier firms mostly reflects the actual pace of technological advance and supports techno-optimists views. I’ve shared with you a few thoughts on these three promising hypotheses. To conclude, let me share with you what I see as priorities in order to exit the low growth trap and prevent the risk of secular stagnation. We must obviously accelerate domestic reforms in order to foster innovation and an entrepreneurial spirit. But at the European level, we need to tackle the persistent “investment crunch” which followed the financial crisis. Thus, we first need a “Financing and Investment Union” in Europe to steer abundant savings into investment and provide adequate financing for innovation.
At present, with less than one percent of outstanding bonds globally being “green”, the G20 is considering initiatives to catalyse this market, including: • Developing a “term sheet” of internationally recognised standardised terms and conditions to make issuance more efficient; • Creating voluntary certification and validation frameworks to give certainty to issuers and investors that a project is “green”; • Integrating environmental risk and green certification into credit ratings; • Developing green bond indices to unlock the potential power of passively managed investments; • Standardising and harmonising principles for green bond listings to promote resilient and efficient trading and adequate liquidity; and  10  The IPCC estimates that additional investment of $ is required annually in the energy sector alone if the rise in average global temperature is to be capped at 2C. www.ipcc.ch/report/ar5/ Mercer estimates that additional cumulative investment in efficiency improvements, renewable energy, biofuels and nuclear, and carbon capture and storage could be in the range of $ trillion by 2030. www.mercer.com/insights/point/2014/climate-change-scenarios-implications-for-strategic-asset-allocation.html  11  See the Task Force on Climate-related Financial Disclosures “Phase 1 Report and Public Consultation” available at www.fsb-tcfd.org/phase1report/  BIS central bankers’ speeches  3  Evaluating mechanisms for consistent, transparent dispute resolution processes. •  We all know the paradox that, as climate risks are a function of cumulative emissions, earlier action will mean less costly adjustment. Better climate disclosure and an effective green bond market will mean more investment with foresight and less regret in hindsight.

I must hasten to mention, however, that in striving to meet these demands, banks must always comply with the regulations as stipulated in the Banking & Financial Services Act of 1994 as amended in 2000, to ensure the safety of customers’ deposits and stability in the financial sector. Any activities by banks, which do not meet the minimum standards provided for in the law, will invite close scrutiny and possible sanctions from the Bank of Zambia to bring the banks in line with the legal framework. Mr Chairman, following implementation of sound macroeconomic policies, the economy is relatively stable as shown by various indicators: •  Inflation is under control;  •  The Kwacha is stable; and  •  Interest rates are going down, although not yet as low as we would like them to be. The cost of borrowing has remained high in spite of the progress that has been made in the monetary and fiscal management of our economy. This high cost has, in turn, stifled the growth of the productive private sector, in particular the Small and Medium Enterprises (SME) sector, which should be the engine of economic growth of our country.
For those of you familiar with Chapter 11 in the United States for non-financial corporates, this amounts to applying those techniques in a very accelerated way and under the discretion of the resolution authorities rather than through a negotiation mediated by a judge. As I have described it, it is a resolution tool. There is no good reason of public policy why resolution should always involve closing the firm, provided that shareholders, uninsured creditors, the board and management pay the appropriate price. Whichever combination of tools is incorporated into resolution regimes, we should expect them to induce changes over time in behaviour of banks and their creditors. There might, for example, be greater incentives to lend to banks against security or at short maturities. As we reintroduce the disciplines of capitalism back into the heart of the financial system, we might have to think carefully about regulatory policies on the encumbrance of assets and on the maturity structure of liabilities. The third point I would make is that even if we were equipped with a decent set of tools for the domestic context, we must be able to cope with the cross-border element of a financial firm failure. Within the EU, this should not be the hardest thing in the world and I hope that the Commission will be able to develop proposals that will lead the way for the rest of the international community in identifying how we can do this.

In this context, despite many burning issues, we have managed to keep the focus on more structural issues such as digitalization by working on the first national fintech strategy, and on green finance by becoming a member of the international Network for Greening the Financial System and conducting the first survey on the current status of the green finance. All these should ensure sustainable and inclusive recovery, while confirming our strong commitment to adopting the EU standards and best practices that should enable faster convergence. Thank you! 2/2  BIS - Central bankers' speeches
The recent example of the Facebook data scandal, where personal data of up to 87 million people was improperly shared, strongly illustrates the point that there are social repercussions to the actions of multinational companies beyond just the bottom line. In my view, international banking is no different. Beyond the traditional goal of providing financial capital, there is a very compelling case for international banking to also develop socialcapital. In this way, finance, often thought to be destructive, can be a very transformative force as well. 2/3  BIS central bankers' speeches  Regionalisation and digitalisation are changing the rules of the game So where does this leave us? As highlighted, the future of international banking is not necessarily bleak. With further calibration and evolution, it can continue to have a prominent role in serving global interests. The good news is this evolution is already taking place. Previously dominated by the elite few, in this case large global banks, international banking is now increasingly open to a larger group of market participants. On one hand, the circle of banks is expanding, from large global banks to smaller regional banks. This is an important point that is also highlighted in the Global Financial Development Report, reflecting the growing extent of banking relationships between developing countries, particularly in this region. On another front, digitalisation is ushering in a new era, expanding the borders of international banking to now include non-bank fintech players. These players have the distinct potential of transforming global banking as we know it today.

Abdul Rasheed Ghaffour: Bankers without borders Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Report Launch for East Asia and Pacific Region - Global Financial Development Report 2017/2018: Bankers without Borders, Kuala Lumpur, 12 April 2018. * * * Thank you for inviting me to speak at the launch of this very important report. The issue of globalisation has featured very prominently in the headlines, especially in recent times. In fact, it has been very trendy over the past decade to herald the end of financial globalisation and international banking. However, the fact that this topic keeps recurring, to me, is a testament that various issues remain unresolved. As such, I am pleased that we are able to have an informed discussion on this issue today. For my brief remarks, I will focus on the theme of the report “bankers without borders”. Finance and globalisation have been an important part of the ASEAN story The title of the report, lends to a very specific definition of the word borders, the conception of finance unrestricted by national boundaries. Conventional economic theory posits that capital will flow from capital rich to capital poor countries to fulfil the productive needs of the economy. This implies that any form of boundary is not only undesirable but may hinder growth.
However, many countries have gone further than these requirements, Switzerland among them. Why does it make sense for us to set high standards in this area? Switzerland has a particularly large financial centre relative to the size of its economy. The banking sector is directly responsible for around 5% of value added in Switzerland, and employs more than 115,000 people. Moreover, in its role as a financial intermediary it is essential for the efficient functioning of the economy. It is therefore of major importance to the economy as a whole. Efficient and internationally active banks play a key role in this context. A break-up of systemically important banks would therefore not be in Switzerland’s overall economic interests, making it all the more crucial that these banks be sufficiently robust. For this reason, the Swiss regulations require systemically important banks to hold a larger capital buffer than the minimum standard laid down in the international framework. You might argue that higher capital requirements are detrimental to the financial centre. In the case of Switzerland in particular, however, such requirements must not be viewed solely as a cost driver. In today’s world, a robust banking system is a significant advantage for a business location in the face of international competition. It attracts clients and businesses, and is therefore desirable not only in the interests of financial stability, but also from the perspective of the banks themselves. Furthermore, Swiss regulators have opted for a streamlined regulatory approach compared with other countries with major financial centres.

In 2012, the Chilean economy will grow in the 3.75%–4.75% range, after growing 6.2% in 2011 (table 2). In this scenario, headline inflation will drop to around  BIS central bankers’ speeches  3  3% in the first half of 2012, and will hover around that figure through the end of the projection horizon, this time the fourth quarter of 2013 (figure 7). These projections use as a working assumption that the real exchange rate will be fairly unchanged over the next two years, based on our assessment of its current level, which is within the range that is thought to be consistent with its long-term fundamentals. The appreciation of the dollar in the global market has also affected the Chilean peso. The peso/dollar parity has depreciated around 10% between the statistical cutoff of this and the latest Monetary Policy Report. Over the same period, the level of the real exchange rate has also risen, almost 4%. This behavior of the dollar has eased to some extent the exchange rate pressures that were being felt in emerging economies by mid-year (figure 8). Regarding monetary policy, in a baseline scenario where the effects of external uncertainty over our economy are bounded, the working assumption used is that the MPR will follow a path that in the short term is comparable with what can be inferred from the various expectations surveys (figure 9).