samchain/econo-pairs-v1 huggingface dataset:
I hope our history will shed some light on those that view the undoing of large interventions as a cause for concern. Shortly after the collapse of Lehman Brothers, the Central Bank of Chile began reducing the policy rate from an initial level of 7.25 percent until it reached the effective lower bound of 50 basis points in July 2009. The rate remained at that level for one year until June 2010. During that period, the Central Bank also took unconventional measures aimed at providing liquidity to the financial markets. For instance, we offered financial institutions access to a term liquidity program (FLAP) at the monetary policy rate of 0.5 percent. During January 2010 we reached a peak of 6.5 billion dollars on the liquidity program, equivalent to 40% of the banking system’s capital and reserves.2 Our exit strategy from this expansionary policy was free from major difficulties. We started unwinding these special facilities in November 2009 by gradually shortening their term. As we finished dismantling our special programs we slowly began increasing the monetary policy rate to a neutral range. The withdrawal of the monetary stimulus at an appropriate pace allowed us to maintain inflation expectations at a two year horizon close to our target of 3 percent.

Caleb M Fundanga: Developing Zambia’s Stock Exchange Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official launch of the BancABC Central African Stock Exchange Handbook, Lusaka, 26 July 2011. *  *  *    The Chief Executive Officer of ABC Holdings - Mr Douglas Munatsi    The Managing Director of BancABC Zambia Limited - Mr Dana Botha    The Managing Director of Lusaka Stock Exchange - Mrs Beatrice Nkanza    Management and Staff of BancABC    Chief Executive Officers and Representatives of various Institutions present;    Distinguished Invited Guests;    Members of the Press;    Ladies and Gentlemen. Let me begin by thanking the management of BancABC for inviting me to this occasion, which marks the official launch of the “Central African Stock Exchange (CASE) Handbook”. I also wish to thank the Managing Director of BancABC, Mr Dana Botha, for sending me a copy of the CASE handbook. The handbook provides a snapshot of various company financial results, share price performance and volumes traded in 2010. The handbook also highlights basic information on investment and borrowing options, which will not only assist investors diversify their portfolios but also assist in reducing transaction costs in our stock market. Ladies and Gentlemen, The stock market is an important avenue for harnessing resources for the financing of development in our country.
To minimise the likelihood of deflation, central banks should err on the lax side and aim at significantly higher inflation rates. With this in mind, the IMF asks whether a permanent inflation target of 4% is appropriate. The proposal is nothing less than asking whether in the pursuit of price stability central banks put macroeconomic stability at risk. I do see the temptation for governments to ask for higher inflation in order to monetise the dramatic build-up of public debt in nearly all advanced economies. This is why calling on central banks to raise inflation rates permanently is most unhelpful. It deflects from the most pressing problem that, currently, macroeconomic stability is threatened by the unsustainable position of public finances in nearly all advanced economies. I can only reject the idea of raising inflation rates permanently. I would not like to imagine the consequences if, on top of the current financial fragilities and in an environment of high public debt, the general public were to lose trust in the purchasing power of money. There is no evidence whatsoever to support that deviating from price stability and aiming at an inflation rate of 4% would enhance economic prosperity or growth. On the contrary, no one would seriously deny that inflation has a detrimental impact. The inflation tax does not constitute just another tax distortion. It greatly exacerbates distortions from existing taxes, contributing to a misallocation of resources and a rise in the tax burden, especially for lower-income households, and ultimately depresses economic growth.

At the outset, the fan charts published in the Inflation Report showed that the odds on writing such a letter during the following two years were 3 to 1 on. In the event, no letter was required. Although the probability of writing such a letter has diminished, it remains high. The latest Inflation Report published last Wednesday implies that the odds on our having to write a letter over the next two years are 2 to 1 against, or one in three. Thirty years ago the UK embarked on an inflationary journey, and what a roller coaster ride it turned out to be. During the 1970s inflation averaged no less than 13% a year, with a peak of over 27% in August 1975. During the 1980s inflation averaged 7% a year, and it has fallen to 4% during the 1990s. That period also contained two of the deepest recessions experienced by any major industrial country in the post-war period. Since the inflation target was adopted in October 1992 inflation has averaged 2.8%. The improvement in inflation performance during the 1990s can be seen in Chart 1.1 Inflation has been remarkably stable during the six years since an inflation target was introduced. Indeed, it has been more stable than in any period since monthly RPI figures were first collected in 1947. 1  Charts not included in this Review. BIS Review 63/1999  2  Moreover, the adoption of a monetary regime which produced low and stable inflation has not damaged growth in output and employment.
With regard to money market conditions, the ECB will remain particularly attentive to developments which may have implications for the stance of monetary policy and is ready to consider all available instruments. Further reducing fragmentation of euro area credit markets and improving confidence in the euro area banking sector are essential to ensure an adequate transmission of monetary policy to the financing conditions in the euro area countries and to further repair the credit channel. Financial stability risks have diminished in the euro area. Measures taken by European and national authorities have helped to ease the severe market stress that earlier weighed on sovereigns and banks. The euro area banking sector has made progress in balance sheet repair by improving its regulatory capital ratios, by reducing its leverage since  BIS central bankers’ speeches  1  the outbreak of the financial crisis and by shifting its funding structure towards more stable funding sources. Net inflows of capital from abroad as well as a reduction in excess liquidity conditions continue to be observed, reflecting an improvement in financial market confidence. Repayments of funds taken up in the context of the ECB’s three-year longerterm refinancing operations conducted in December 2011 and February 2012 have resulted in a decline in the size of the Eurosystem’s balance sheet since end-August 2012. We will remain attentive to all developments that influence an adequate transmission of monetary policy to the financing conditions in euro area countries.

Jean-Pierre Roth: The Swiss economy and financial centre – successes and new challenges Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Handelskammer Schweiz-Österreich und Liechtenstein (Foreign Trade Chamber for Switzerland-Austria and Liechtenstein), Vienna, 25 February 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Mid-2003 saw the start of a remarkable, broad-based economic upswing in Switzerland which is still underway, even if business cycle uncertainty has increased in the recent period. A number of factors indicate that the long-term growth outlook, too, has improved for Switzerland. These factors include the increasing globalisation of our economy and the opening up of the labour market to the EU. The Swiss economy is participating in globalisation through increased direct investment as well as growing foreign trade. At the same time, there is more competition on the domestic goods market, although a fair bit still remains to be done in this area to complement the opening up of the labour market to the EU. Globalisation and market opening present companies and economic policymakers with challenges that become particularly acute when setbacks occur – as in the case of the current international financial market turbulence.
This is a long-term possibility, but it would have the advantage of reflecting the strong trade linkages in the region. It would also create bigger and more liquid markets that are less susceptible to manipulation. It would also help address problems of intermediating financial resources within Asia. At present, Asia’s central banks invest massive amounts in foreign securities, particularly U.S. dollar assets, only to see volatile funds flow back to the region from overseas markets. By investing reserves directly in Asian financial assets, this type of costly and unstable recycling through developed markets could be reduced. There are, of course, many obstacles in the way of creating an Asian Currency Unit. The various economies of the region operate under widely differing economic regimes, and are at different stages of development. An institution would be necessary to administer the system, and the politics involved would doubtless be very complex. But I believe that now is a useful time to raise this topic for discussion, at least at an intellectual level: successful implementation in the longer term would go a long way towards addressing the currency instability we have seen in the region over the last year and a half. After all, it has taken the more homogeneous Europe fifty years to bring the euro into existence. A further long-term solution lies in the development of stable and transparent debt markets in the region.

However, the solution to such problems does not lie in opposing the new risk management techniques or Basel II. They will help to promote financial stability. But there is a need for the banks to find ways of handling any effects that arise from an accentuation of cyclical fluctuations. It is important for economic development that credit and venture capital are available even when business activity is cyclically low - and perhaps somewhat less so when activity is peaking. Besides influencing how the banks handle their capital, the more advanced methods for risk management have led to the creation of new financial instruments. Two examples are securitisation and credit derivatives. This enables the banks to divest themselves of the credit risk in their loans by hedging in the credit derivatives market or by simply selling the risk through securitisation of the loans. The credit risks in the economy can then be spread over more agents. That is fundamentally favourable for financial stability and market efficiency. At the same time, the authorities must follow developments closely in order to understand where these credit risks end up. Their departure from the bank sector does not mean that they disappear from the economy; they turn up instead in a different form somewhere else, for instance in insurance companies or mutual funds. Do the new risk management facilities also mean that banking operations will take a different direction? Will banks try to slim their large illiquid balance sheets by selling off loans or securitising assets?
6  BIS Review 11/2005  Let me just take this opportunity to note that my impression is that there has been a convergence process within the central bank world. Countries that have conducted a more ”pragmatic” policy like that in the United States, which is less governed by clearly-described principles have been working on making more information publicly available and establishing a clearer framework for their policy. At the same time, inflation-targeting countries have been discussing in greater depth the various problems that sometimes prevent policy from following the simplest principles. The Riksbank’s approach to new monetary policy issues or problems is, as has been pointed out earlier, that we keep to a relatively well-specified framework. This is our starting point when considering the monetary policy stance to be taken. If, for instance, we wish to deviate from the usual policy rule, we can do so, but we then make the requirement of ourselves that we can motivate this on the basis of the framework we use and the flexibility we apply. It is difficult to see any reason to change this system. In my opinion, it has served us well and forced us to improve our thinking with regard to tackling the various problems that arise. The new analysis and forecasting methods do not change the framework for our monetary policy. We still have the same target, the same ambition to achieve this target in two years and the same arguments for taking real developments into account when deciding the details of the policy.

At the same time, the forecast based on the market’s assessment of the future repo rate shows that there didn’t have to be any hurry to begin to hike rates. A repo rate path consistent with implied forward rates led in this example to inflation never reaching the target. Examples like this can of course never give an exact answer to when the repo rate should be adjusted. What they can do is increase our understanding about the consequences of different options. In this case they can help us to narrow down a number of reasonable scenarios for policy a few quarters ahead. And in this particular example an unchanged repo rate was certainly one such reasonable option for a period. Allow me for safety’s sake to emphasise that the conclusions for monetary policy of both the alternative forecasts – the Inflation Report’s usual main scenario and the estimates based on implied forward rates – can generally be expected to be the same. Regardless of whether we reason on the basis of the simple policy rule, which relates the forecast of inflation one to two years ahead – under the assumption that the repo rate is held constant – to the current decision, or whether we study forecasts based on implied forward rates, for example, we can reach the conclusion that it was reasonable to leave the repo rate unchanged in December and that the repo rate sooner or later will need to be raised.
In this respect, our committee can be compared to the Governing Council of the ECB. Our external members are part-time members, and are employed in posts outside the Bank while serving as Board members. If we were to publish voting records, the members would have to be individually accountable for their votes and assessments. This would place a workload on the external members that would not be consistent with being part-timers. The Eijffinger-Geraats index does not take into account how different types of committees can communicate. Alan Blinder and Charles Wyplosz emphasize that “the appropriate volume and methods of central bank communication depend crucially on the nature of the monetary policy committee.” 8 To get the highest score on the Eijffinger-Geraats index, one needs to have an individualistic committee. However, one should not forget that the rationale for being transparent is to provide relevant information to the public. Communication is about providing the information as clearly as possible. To my knowledge, the research on committees and communication does not show that communication is necessarily better with individualistic committees than with collegial committees. Even if individualistic committees can go further in publishing the individual views of the members than collegial committees, it entails a certain risk. To quote Alan Blinder 9 : “A central bank that speaks with a cacophony of voices may, in effect, have no voice at all”. Although Norges Bank does not publish voting records or minutes that report the views of the individual members, we publish the Executive Board’s monetary policy statement.

The first two ingredients provide efficiency in monetary policy, in the sense that private agents knowing the central bank’s assessments and reaction function can respond appropriately to economic developments. The third ingredient contributes to a better understanding of the objectives of monetary policy and the link between objectives and policy. This could underpin the credibility of the reaction pattern, and is also important for democratic accountability. In addition, the reaction function could change over time, for example due to a change in how the economy works or an improvement of the understanding of economic mechanisms. The criteria could then give some guidance to the public on how and why the reaction function might change. Let me briefly explain how Norges Bank communicates the three ingredients of our communication, and let me start with the forecasts. Chart 1 shows the forecasts of the key variables. The uncertainty bands are based on model simulations and reflect estimated variances of the different shocks. (Note that there is also a fan chart for historical values of the output gap, since there is also uncertainty about potential output in retrospect.) Communicating uncertainty through fan charts in the inflation reports was introduced by the Bank of England in 1997. While the fan charts for inflation illustrate that inflation cannot be controlled perfectly by the central bank, this argument does not apply for the policy interest rate.
Sharing the burden, as the cost of addressing the current crisis is more than a single party could bear on their own. The state shall not compensate parties for lost opportunities for profit, nor for losses due to preventative measures imposed to fight Covid-19; it is not possible to avoid losses or damages completely. Financial support is extended with the limited goal of surviving this current period and is only extended to economic entities and companies that enjoyed a strong position, ran with efficiency, and were contributing to the economy prior to this crisis. Ensuring that the economic cycle keeps running, so that companies that had suspended business may resume their activity as soon as life goes back to normal. Protecting the different segments of the national economy against damage sustained due to interdependence of economic sectors. Solutions and remedies provided through the stimulus package are based on currently available data and present conditions. Should the crisis stretch much longer into the future, other remedies would be presented that better correspond to new data and conditions. To come up with a balanced and comprehensive approach, the committee specified the issues that must be addressed and for which stimulus is needed within four main segments: the household, business, banking, and government sectors. Twenty-two measures had been presented to stimulate the economy, 11 of which were included in Council of Ministers Resolution (455).

The impact would continue to grow as the crisis persists, since the cash flow crunch would force companies – including those previously in a good liquidity position - to shut down for failure to secure financing; either due to increasing financing costs or the banks’ reluctance to finance amid fears of growing default risk during the crisis. This could lead to companies’ bankruptcies, which, due to the chain effect between economic sectors could thus result in a contraction in non-oil GDP. The Committee’s Mandate To counter the impact and repercussions of the crisis on the national economy, the Higher Steering Committee for Economic Stimulus (The Committee), formed by the Council of Ministers Resolution (455) on 31 March 2020, and chaired by the Governor of the Central Bank of Kuwait, adopted a proactive approach to realize economic stability throughout the crisis. It laid down and initiated economic stimulus measures to prepare for the economic recovery stage that shall  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -3-  follow once we overcome this crisis. Immediately afterwards, a national economic and structural reform plan needs to be launched and adopted by all the relevant stakeholders. The Committee listed several measures and governing principles to serve as a framework for all its activities, and they are as follows:  -  -  -  -  Introducing immediate remedies that provide practical and swift solutions to protect the national economy supporting economic reform and best possible resource allocation.
The fact that an apparently national problem has global effects to the extent that we have seen is due in this case very much to the fact that the loans have been "repackaged" into fairly technically complicated securities and sold on to investors around the world. And the unrest that has arisen has largely been concerned with the fact that it is difficult to see who is bearing the credit risks, and to what extent. These events have had several effects. There has been a more general reassessment of risk in the financial markets. The general uncertainty has led to an increase in demand for liquid and safe assets such as government securities. The interest rate on government securities has fallen, while the unwillingness to take on risk has contributed to rising interest rates on  6  BIS Review 132/2007  loans and investments between banks; interbank rates (slide 11). But all in all, it nevertheless appears as though the financial turbulence has so far not had as large repercussions on the financial markets as, for instance, the Asia crisis in 1997 and the IT crash in 2000. What effects can we expect on the Swedish economy? Perhaps the most important effect will arise in that growth in the United States will slow down when housing investments there fall and households consume less. The lower demand in the United States to some extent slows down international economic activity and there will be a slightly slower increase in Swedish exports.

In general, Czechs despise inflation, and the central bank needs to explain repeatedly why it uses the worldwide standard of a 2% inflation target instead of targeting literal stability of the CPI level, or 0% inflation. Already many decades before the era of independent monetary policy, in the early 1920s, Czechoslovakia pursued a strategy of deliberately strengthening the national currency. This policy resulted in deep deflation, in strong contrast to the hyperinflations seen at that time in neighboring countries (Austria, Germany, Hungary, and Poland; see Sargent, 1982). So, it comes as no surprise that the Czech National Bank is rarely applauded for cutting interest 1/2  BIS central bankers' speeches  rates, while hikes are often welcomed by a majority of the population. An important publicrelations test arose for the Bank in 2013, when interest rate cuts proved insufficient to return inflation to the target. Inspired partly by one distinguished member of today’s panel, the Czech National Bank adopted an exchange rate commitment to keep the currency from appreciating. The commitment was terminated a year ago. Since then, studies by the IMF and academics alike have pointed to large benefits of the policy in terms of reducing unemployment, lifting GDP growth, and preventing deflation. Within two years after the commitment’s enactment, the Czech Republic – at least in part thanks to the commitment – turned from a de facto sick man of Europe to one of the fastest-growing economies with the lowest unemployment rate in the entire EU.