samchain/econo-pairs-v1 huggingface dataset:
In the face of these developments, we welcome the recent concrete steps, as part of the medium term program in Turkey, towards reducing the dependence on energy imports by shifting to domestically produced and renewable energy sources. These measures will hopefully ease the susceptibility of the current account to commodity prices in the long run. The key question in the short-run is how to smooth out the impact of the commodity prices on the domestic economy in the short to medium term, while there is a heightened degree of uncertainty regarding financial and real factors. In Turkey, ex-refinery fuel prices, in addition to the 18 percent-Value Added Tax (VAT), are also subject to the Special Consumption Tax (SCT). Special Consumption Tax, which is not only a fixed tax but also comprises a major part of the final prices of fuel products, helps to smooth out significant fluctuations in crude oil import prices. Thus, consumers are less affected by such fluctuations. Esteemed Guests, It seems that uncertainties regarding commodity prices will continue to be an important factor to be considered carefully in policy implementations in the forthcoming period, too. I believe that the papers presented in this conference will guide us in overcoming the policy challenges we will face along the road. Thank you very much for your interest and participation. 4  BIS central bankers’ speeches

Especially important in this regard is to moderate and possibly reverse the course of public indebtedness, adopt a framework to capitalize the banking system and ensure a sustainable evolution of household borrowing. The signals of the government regarding the orientation of its fiscal policy, its backing of the new General Banking Act and the reactivation of its search for mechanisms to consolidate borrowers’ financial information are very 6  positive in this regard. Equally valuable in dealing with future turbulences seems to be to strengthen fiscal institutions by enhancing the status and autonomy of the Fiscal Advisory Council, as well as acknowledging the role of institutional investors in the Chilean economy in the face of future reforms. Dear senators, the Chilean economy is progressing in the recovery of growth and the closing of gaps. Rather than a result, this is a good start for a more favorable stage of the business cycle. Many challenges lie ahead. It is important to deepen the recovery of investment, that the labor market be strengthened and that competitive advantages be exploited to make this recovery more self-sustained and shared. Greater long-term growth calls for more structural changes that will help raise productivity. The Central Bank will be there to ensure that imbalances or vulnerabilities do not incubate in the process, which later may require more costly adjustments. Together we also have the responsibility to strengthen those factors that allow us to better withstand external shocks that will sooner or later be felt.
The task is even more daunting when the world is going through significant transformation, with unprecedented policy actions all across the globe, and with yet-to-be- known consequences of such actions and their unwinding. Faced with the uncertainty and the complexity of the environment we are operating in, we need to take a broader perspective and make sure our decisions are robust under different plausible eventualities. At the same time, the Bank of Thailand constantly strives to expand our economic surveillance capability, by collecting up-to-date intelligence on economic and financial conditions through indirect and direct contacts with the market. The insights from direct contact, coupled with the information from surveys like our Business Sentiment Survey sharpen the picture we get from the other available statistics. This is one reason why monetary policy cannot simply follow mechanistic and simplistic rules based solely on any single data. Nonetheless, uncertainties can never be off the table. In this light, a prudent approach is to move in careful and measured steps. That kind of incremental action in what we perceive to be the right direction is likely to contribute more to economic stability than aggressive attempts to fine tune the economy. BIS central bankers’ speeches  3  3. Inability to address supply-side impediments  The third limitation of monetary policy I would like to emphasize today is its inability to address supply-side impediments. Through interest rate adjustment, monetary policy can influence aggregate demand in the economy.

But monetary policy cannot solve deeper structural problems or lift growth potential of the economy. That needs to come from real progresses that increase productivity and relax supply-side constraints. Sure, demand stimulating can buy time by cushioning the economy from short-term economic shocks. But this may possibly delay necessary adjustments of the economy to longer-term challenges. For example, keeping interest rate too low for too long and keeping exchange rate undervalued, beside encouraging risk taking and storing up financial instability problems for the future, may also temper incentives for businesses to improve efficiencies, and may slow the reallocation of capital and labor to more productive uses. In the context of Thailand, one of the most important structural issues facing the Thai economy at the moment is that of the labor shortage. Through our business contact and recent surveys, the labor shortage has scored one of the top concerns by both domestic and foreign businesses operating in Thailand. Underlying causes of labor shortage include the demographic change and education and skill mismatch. Clearly, there is little monetary policy can do to solve this supply bottleneck. It can help foster macroeconomic stability conducive to business investment, but most of the efforts to address supply-side impediments still need to come from a broader and more balanced set of economic policies including fiscal, industrial, technology, and labor market policies.
In any event, it ought to be borne in mind that the budgetary cost of the crisis has also been very high. The government debt-to-GDP ratio stood at 118.4% at end-2021, 1.5 pp lower than in 2020, but over 20 pp higher than the pre-pandemic level. Meanwhile, the budget deficit fell from 10.3% to 6.9% of GDP in 2021, yet it remains over 3 pp of GDP above its pre-crisis level. The outlook for the Spanish economy: the impact of the war in Ukraine The outbreak of war has prompted a worsening of growth prospects in the short term and stronger inflationary pressures. There are various transmission channels for this new shock. First, Russia and, to a lesser degree, Ukraine are major producers of certain energy and non-energy commodities. The outbreak of the war has given rise to a significant increase in many of their prices. A second channel derives from the direct trade exposure to these countries, in addition to the indirect exposure via a fall in demand from other, more exposed countries. Additionally, there is the possibility of the global production chain disruptions being compounded, particularly amid the sanctions imposed on Russia. A third channel is through the negative effects on uncertainty and confidence. A fourth channel is the financial implications, insofar as escalating inflationary pressures result in a tightening of the monetary policy stance.

Removing a portion of the excess reserves from the system ahead of increasing the rate paid on reserves is a cautious approach, as it should improve the Fed’s control of short-term interest rates when it comes time to tighten monetary policy. 4 To be sure, even at today’s reserve levels, we would expect the interest rate paid on excess reserves to exert considerable pull on other short-term interest rates such as the federal funds rate or repo rates. However, we are unsure of the exact relationship between these rates and believe that it is likely to be tighter when the banking system is not as saturated with liquidity as it is today. Thus, it may be prudent to remove some portion of excess reserves before raising the interest rate on reserves. Note that the policy tightening in this scenario will still likely be taking place in an environment of large excess reserve balances, and the main workhorse of the tightening cycle will still be the interest paid on reserves. However, the draining tools can be used to best ensure the success of that framework. Market conditions: at risk on exit? Finally, let me turn to conditions in financial markets and discuss whether there may be vulnerabilities related to the Fed’s exit from the current monetary policy stance. I think there are two potential areas of concern. The first potential concern is that the exit strategy could simply cause confusion among market participants, prompting volatility in asset prices.
In an age of greater demands for performance and in an environment of increased scrutiny and transparency, the transition to such leadership positions has not been based on gender. Indeed, it is based on the capability as administrators, policy makers and thought leaders. Power sharing is therefore the shared power to contribute to the nation rather than on the power that is wielded. My presentation today will therefore start on the role of the public sector and its accountabilities before discussing women and leadership in the public sector, its challenges and some strategies for success. Accountabilities of the public sector The role and accountabilities of the public sector differs markedly from the private sector. Unlike in the private sector, financial measures are generally not the indicator of the performance of agencies in the public sector. In addition, actions taken by the public sector have far reaching implications on the economic well being of the public at large and entire spectrum of businesses. Such actions may even have implications on other countries given the greater international interdependence that prevails in the current environment. The responsibility and accountability is therefore immense. History has shown that mismanagement can greatly damage a nation resulting in high costs to the people of the country. In contrast, well managed nations have brought great prosperity to its people. Being in the public sector is all about bringing value and benefits to its citizens. Such benefits can include improved housing, education, health and transportation.

This will therefore involve balancing the trade-offs and managing the risks to the different interests of the different segments of society. Sixth, is a skill that is increasingly important in the current environment. It is the management of crisis. Unlike previously, when conditions were relatively stable, the current environment is  2  BIS central bankers’ speeches  frequently plagued by crisis. During such times of distress and instability, the public sector is at the forefront in providing a response, in providing a solution to the crisis. In making decisions, during such times, any delays, inaction or wrong policies can produce widespread damage to the entire country. Seventh, is the ability to effectively manage under intense pressures. Such pressures can emanate from the high expectations of the different stakeholders, the crisis conditions or from the failure of other parts of the public sector that have implications on your performance. However, being strategically focussed and having the ability to stay on course avoids being derailed by such pressures. Eighth, is then courage and bravery to undertake the responsibilities. At the extreme it requires having nerves of steel. This is to enable sound decisions at the time of high level of distress and ensures that the organisation remains calm and cohesive during such times. Ninth, is having the drive and unwavering perseverance to pursue the vision. The agenda of public sector which is to ultimately improve the well being of its citizens is a long haul business which therefore requires perseverance.
We do not think, act or communicate in the same way today as we did when the inflation targeting regime was new. The driving force behind the changes has come partly from practical experiences, both in Sweden and other countries conducting an inflation-targeting policy. Academic research has also played an important role. Before I go into greater detail on how the Riksbank’s way of conducting monetary policy has developed, I intend to begin by describing the background to the establishment of an inflation target in Sweden. The background to Sweden introducing an explicit inflation target Today the Swedish krona has been floating for fourteen years and two months. 19 November 1992 will always have a special significance for the Riksbank. This was the day when we were forced to abandon the fixed exchange rate, under very dramatic circumstances and after a stubborn defence of the Swedish krona. At that time we were in the middle of the most serious economic crisis in Sweden since the 1930s – a tragic end to almost 20 years of stabilization policy problems. The idea behind the fixed exchange rate policy was to ensure that inflation in Sweden would be in line with that in the countries that were our most important trading partners, and that the fixed exchange rate would function as a nominal anchor. But for various reasons the economic policy conducted in the 1970s and 1980s tended to be too expansionary.

Monetary policy based on an inflation target was a relatively new phenomenon at that time. There was also great uncertainty about how this would work in Sweden. For those of us who were around during the crisis years, it is particularly pleasing to see how well the Swedish economy has developed over the past ten years, compared with the previous two decades. Naturally, one cannot ascribe all success to the changeover in stabilization policy – the general economic developments have also been favourable. However, there is no doubt that the new regime with an inflation target for monetary policy has given a steadiness and stability to economic policy that was previously lacking. A stable fiscal policy has also been very important. A lot has happened to the monetary policy framework since the inflation target was introduced. This includes much of the learning process I mentioned in my introduction. As deputy governor during the years 1994 to 1998, I was involved in setting the course, so to speak, and when the work on building up competence and analysis tools for the bank’s main tasks - monetary policy and financial stability began. Other important tasks included improving communication and increasing transparency, both internally and externally. It was necessary to win confidence in monetary policy as quickly as possible and this required openness and clarity. Since I returned to the Bank at the beginning of last year, I have been able to note that the Riksbank’s work procedures have continued to develop and modify.
Monetary stimulus is more effective if, in a deflationary environment, other policies can also give households and firms the confidence that global reflation is in prospect. And structural reforms can boost long-run wealth allowing monetary policy to bring forward spending from future incomes that are real and not ephemeral. All must recognise the imperative of avoiding the global liquidity trap. Not to beggar-thyself via beggar-thy-neighbour. Not to obsess over process at the expense of productivity. But by building resilient domestic demand and sustainable cross border capital flows, we in the G20 can redeem an unforgiving world. BIS central bankers’ speeches  15  Annex  Chart A1 Secular drivers of lower real rates – quantification  Source: Taken from Rachel and Smith (ibid.). 16  BIS central bankers’ speeches

In principle, the three-pillar structure of the New Accord provides more precise directions to regulators to strengthen bank supervision and incentives to banks to become more sophisticated in risk management. Implementation of Basel II eliminates “one size fits all” methodology to assess risks and offers instead a wide range of methods to evaluate risks based more on failure likelihood. But the supervisory authorities in several emerging markets and many developing economies are concerned that Basel II puts a challenge they cannot meet. Probably our greatest concern relates to the need of the standardized approach to rely on external rating agencies for calculating minimum capital requirements. Currently domestic rating agencies are totally absent in Albania and not well developed as in many other non-OECD countries. On the other hand, in most of our economies many small enterprises cannot afford to be clients of international rating agencies. Since borrowers unrated from rating agencies will be assigned a 100% risk according to Basel II, initially most domestic credits may end up under this 100% category. This could reduce risk sensitivity of the new system brining it close or similar to that of Basel I. On the other hand, Albanian banks hold a significant share of government treasury bills and notes. Actually, under Basel I to this exposure of the banking system denominated in local currency is assigned 0% risk independently whether credit risk of the sovereign debt is rated or not.
This includes considering a fiscal union and even a political union, which are difficult topics and ones that I have not touched upon today. Let’s remind ourselves that Europe’s Heads of State or Government already “laid the foundation for completion of the European Union” with the Maastricht Treaty. This Treaty,  BIS central bankers’ speeches  5  according to former German Chancellor Helmut Kohl, marked “a new, decisive step in the process of European integration that in a few years will lead to the creation of what the founding fathers of modern Europe dreamt of after the last war: a United States of Europe.” 7 It is time that this affirmation resulted in action. A completed Union would not mean that Member States give up their national identities. Quite the contrary: they bring their national identities with them into the euro area. That is why we speak of “unity in diversity”. The Euro Exhibition illustrates this: while one side of our coins all share the same design, each Member has its own country-specific design for the reverse side. These designs often bear symbols of national identity, such as Milda, the symbol of freedom, who features on the Latvian euro coins. But go and take a look for yourself! I hope you will enjoy the exhibition. My thanks go to the Deutsche Bundesbank and the City of Osnabrück for inviting me to today’s opening event. 7  6  Kohl, H. “Zielvorstellungen und Chancen für die Zukunft Europas”, speech given on 3 April 1992.

Our price stability mandate has not constrained us from responding forcefully and successfully to the biggest disinflationary shock experienced in generations. With inflation rates in the euro area currently projected to be slightly above 1% in the short to medium term, deflation risks continue to be absent, and price stability has been maintained. Most importantly, of course, price stability has not compromised macroeconomic stability. Thank you. 4  BIS Review 22/2010
In Europe, the reform of IAS 32 and 39 represents an attempt to improve the comprehensiveness of banks’ disclosure requirements. In recent years, banks’ risk exposure has shifted to instruments that have, up to now, not been reported as assets. What is maybe most important is the increased reliance of financial institutions on derivatives contracts, which has resulted in growing disparities between the information contained in financial statements and the true risk profiles of the reporting entities. The new accounting standards to be finalised next year will introduce a definition of financial instruments. They will also cover derivative instruments, which will have to be reported on balance sheets. As a consequence, information quality and coherence will be improved, providing a more accurate reflection of the new financial environment. However, the framework that is emerging is still far from satisfactory. The revised accounting standards will most likely include an option for banks to measure any financial asset or liability at fair value. This means that instruments for which a market price is not available could also be valued on the basis of an estimate of a fair value. Several serious concerns arise from this approach. Comparability of financial statements could be affected, as the same transaction could be carried out at different values by competing financial institutions. Moreover, if the reliability of the valuation of nontraded assets is limited, the quality of the information contained in financial statements is going to deteriorate, thus allowing imbalances to build up without the possibility of activating correcting mechanisms.

Consequently, cooperation efforts are being  BIS Review 53/2003  1  made by central banks and supervisory authorities to overcome the problems caused by the fact that supervision and oversight primarily remain a national responsibility. The ECB - and the Eurosystem as a whole - is also enhancing its activities in the field of European financial stability. One part of these activities is visible through the regular articles and reports. Many other activities are less visible and take the form of discussions concerning financial stability in the ECB Governing and General Councils and ESCB Banking Supervision Committee, or our regular contribution to the strengthening of cooperation among relevant European authorities and our participation in international discussions. I would like to organise the rest of my remarks around the three themes I have identified. First, I will look at what evidence is provided by past crises about the severity of the market frictions. Second, I would like to discuss the changes in the policy framework which have been made and, third, are being made in order to preserve financial stability. B. The three themes and financial stability  Past crises could give us some hints about what could also be important financial stability concerns in the future. One should not go too far back as the financial system is rapidly changing and one must always be prepared for surprises. Often the new crises come as complete surprises.