samchain/econo-pairs-v1 huggingface dataset:
In this period there have been only two occasions when the krona has fluctuated more than 2 per cent against the German mark. Managing transitory effects The subject of the Riksbank’s attitude to the inflation target is also raised from time to time in the media. It has been claimed that the Riksbank shows less concern about inflation moving outside the tolerance interval’s lower limit than it does about the upper limit being exceeded. That is not the case. A couple of years is too short a period on which to base arguments that deviations from the targeted rate are a sign that policy has not been symmetric. Monetary policy work involves a lot of uncertainty, which is no doubt inevitable when the interest rate has to be set on the basis of forecasts that extend several years into the future. At present, moreover, assessments are particularly difficult so soon after the changeover to a low-inflation regime, with all that this may involve in the form of altered behaviour by households and firms. Another complication is that in recent years, inflation throughout the world has been lower than expected. Another aspect of this issue is the Riksbank’s choice of a target variable. Every conceivable indicator of inflation has its shortcomings and these have to be weighed against the advantages when choosing monetary policy’s target variable. The consumer price index (CPI) has the advantages of being well-known and established among economic agents and people in general as a measure of inflation.

In fact price stability, in the sense of an inflation rate overall of around 2½% a year, is likely to mean that the prices of manufactured goods will, on average, not rise at all. Faster productivity growth in manufacturing than in services, averaging around 2% over the last twenty years, means that the prices of services will rise faster than those of manufactured goods. And the rise in sterling over the past five years increased the difference between inflation rates in the two sectors. Table 5 shows the inflation rates for goods and services in the major economies. Positive rates of inflation for services, which account for around half of consumer spending, show deflation in most of the world economy is still some way off. In all countries over the past decade the gap between goods and services price inflation reflects productivity differences. That gap has widened somewhat in recent years as increasing competition from new producers has driven down prices of tradable goods. But the striking feature of the table is the extent to which the difference has increased to no less than 5.7 percentage points in the UK, much more than in the US where in turn the gap is larger than elsewhere. Exchange rate movements are largely responsible for these differences. The extent to which services inflation has risen relative to goods inflation is another manifestation of the imbalance within the UK economy.
In 200 and 500 Lekë banknotes, the portraits of Naim Frashëri and Ismail Qemali have been notably improved. 1/2  BIS central bankers' speeches  The designs on both the obverse and the reverse of the banknotes have been reconfigured and enriched with new or improved security features. The dominant colours have been preserved, but they have been given a fresh look, with more vivid and balanced colours for the eye. The design composition of each banknote is in harmony with the rest of the series. The overarching goal was to create a series of banknotes that are modern and easy to use, still in balance with tradition. The personalisation, versus unification, of some of the security features for each denomination is a new approach. The reduced dimensions make the banknotes more user friendly. Special attention has been paid to features for the visually-impaired. The nominal value on each side of the banknote is easier to read, the dimension of each denomination are different, and the raised print that may be felt on the edges of banknotes has been kept to help identify different banknotes. For the first time in Albania, the new series introduces polymer banknotes. This plastic material, which is more durable than cotton paper, was selected to be used for the 200 Lekë banknote, taking into account the higher frequency of changing hands and a lower paper quality evidenced in this denomination over the years.

when it moves the whole yield curve, or when it affects the exchange rate and other assets prices. There might be several channels through which the policy rate can affect asset prices or asset valuations: ·  first, changes in interest rate modify people’s expectations about future economic growth, and thus their profit expectations;  ·  second, monetary policy decisions may change the set of discount factors economic agents apply to their profit expectations or to the future stream of services or revenues from the asset they hold (housing for instance);  ·  finally, interest rate changes may induce portfolios’ shifts amongst assets that may in turn affect their relative prices. BIS Review 28/2002  1  Besides this, and for the sake of simplicity, I will call it the “interest rate channel”, changes in asset prices also generate wealth effects that may have a significant impact on several components of aggregate demand, namely consumption and investment. These wealth effects feed through to the economy via various channels, such as a direct increase in net wealth, which may lead to a rise in consumption because of households’ inter-temporal smoothing behaviour; via Tobin’s Q, which activates firms’ investment; or via an increase in the value of collaterals, which may reduce agents external financing constraints and enhance final spending, in accordance with the “broad credit channel”. Although the evidence is mixed about the effectiveness of the wealth channel, even in the 1 United States , it is likely to have increased over recent years.
Spain has been one of the first European countries to have incorporated a balanced budget requirement into its constitution, with broad Parliamentary backing. A more recent example is labour-market reform. This is of great importance, because Spain had not taken such a significant step in this area since the 1984 reform. If the 1984 reform allowed Spain to create millions of jobs and to increase the welfare of Spaniards during upswings, the reform approved this year should put an end to a situation in which dismissal and an increase in unemployment are the only way of adjusting the economy. This reform leaves workers and employers free to agree to increase competitiveness by increasing productivity and/or adjusting wages, with the only obstacles or impediments being those laid down by law. It is sometimes said that all this has been done too late. Should labour-market reform have been carried out five years ago? It certainly should have. Or ten years ago in 2002, when we were enjoying the long upswing? It would certainly have been better for Spain. The same can be said about financial reform. Why were savings banks not reformed during the good times? Why were bank resolution schemes, such as the FROB, not drawn up ready to resolve the banking problems created by the upswing? These questions merely lead to gloominess and, moreover, ignore the fact that, not only in Spain, but almost worldwide, key reforms are introduced at the worst times.

The Initiative includes studies on issues such as new securitised debt instruments, issuance of debt by international financial institutions, regional credit guarantees and enhancement facilities, and the establishment of local and regional credit-rating and credit-enhancement agencies. Another initiative, known as the Asian Bond Fund project, represents collective efforts of the Executives' Meeting of East Asia-Pacific Central Banks, or EMEAP, to broaden and deepen the bond markets in the region. The ABF project will bring about many benefits. First, it introduces and promotes new fixed-income products to the Asian markets. Secondly, it helps improve market infrastructure. Thirdly, the initiative has helped accelerate tax and regulatory reforms in both the regional and domestic markets. The Bank, with its mission as the region's development bank, is well positioned to assist emerging market economies in Asia to cope with the challenges of globalisation. In the past year, the Bank has contributed to the issuance of local currency-denominated bonds in India, Hong Kong, Malaysia and Singapore. The Bank is also providing valuable support to the Asian Bond Markets Initiative through the former Regional Economic Monitoring Unit, which is now known as the Office of Regional Economic Integration. Mr President, your decision to expand this Office and dedicate it to regional cooperation matters is most timely and welcome, as a well defined agenda for the Bank on regional cooperation will enhance financial stability by strengthening regional surveillance and cooperation. Despite these efforts, developments, and - dare we say it - successes, there are many challenges lying ahead of us.
Moreover, such a contraction and even the closure of some firms in the industry can be understood, in some cases, as efficient outcomes on purely economic grounds. While concepts like full efficiency or maximum social welfare are “too grand” to be operative, I think we can still make some progress on this issue by posing the question in relative terms: will Basel II unduly exacerbate the tendency towards procyclicality inherent in banks’ business? In response, I find it helpful to focus on certain key determinants of bank capital supply and demand, for their interaction will ultimately determine the conditions under which banks may gain access to capital markets and withstand a general downturn. On the demand side, under Basel II higher overall uncertainty about debtors’ solvency during a recession will admittedly tend to put upward pressure on the regulatory capital. But we shouldn’t view this effect as economically artificial, since we know from basic contract theory that lenders, i.e. depositors, will optimally require a larger amount of own resources from investors, i.e. banks, whenever the former perceive higher risk in the projects to be funded. In plain terms, while regulatory capital is rising in such a situation, economic capital goes up as well. I firmly believe that the latter is the most relevant variable for understanding banks’ decisions about the amount of credit to be extended and its price. Nowadays, well-managed banks already allocate economic capital and take decisions on the basis of incurred risks.

Increased awareness of the risks and early reaction to problems is likely to lead to a smoother adjustment to new conditions or to the correction of mistakes, making decisions less abrupt and time-lags perhaps shorter. This early reaction will be supported by the supervisory second pillar and again by the transparency of the third, which will also reduce the temptation of supervisory forbearance. Let me add a few words on transparency. History has also taught us that some of the worst financial crises were ultimately unleashed by sudden bank crises, during which an upsurge of collective panic led individuals to withdraw their funding to banks. A vast amount of analysis and research on these issues has underlined the role of information asymmetries in financial intermediation. Indeed, it is no overstatement to say that the presence of asymmetric information between lenders and borrowers in financial markets can explain much of their inherent instability. Higher transparency in the information provided by banks on their balance-sheet and risk position, along the lines of that set out in Pillar 3, must undoubtedly alleviate such asymmetries, thus reducing the likelihood of an episode of profound disintermediation and, by fostering the public’s confidence in the banking system, easing the recovery of the financial pulse in the event of a downturn.
Analysts are of the view that the cost of competition will drive greater consolidation in the U.S. and Europe. Once this wave of growth opportunities mature, the mega-exchanges will look to Asia as the next frontier of growth. Regional exchanges need to gear up for the competition and find ways of staying relevant to the international network of traders and investors. Shutting out competition and maintaining the status quo is not a viable option. More companies will seek alternative pools of liquidity and investors if domestic exchanges cannot satisfy their need for greater liquidity and connectivity to a larger network of traders and investors. Investors will also bypass local exchanges to invest overseas. Engaging in deeper regional collaboration What can governments and exchanges do? There are several initiatives that we should consider. Capacity building Firstly, capacity building in the region. Regional capital markets, particularly Asian bond markets, have made significant progress in recent years. There is however, scope for us to continue to explore ways to further grow and develop our capital markets. Capacity building plays a critical role in this respect. Concerted efforts to enhance the skills and sophistication of market players and regulators will not only strengthen markets but also provide an essential pre-condition for closer collaboration amongst the regional capital markets. To this end, ASEAN finance officials have agreed to collaborate on a training initiative to enhance regional expertise in capital market development.

Apart from ensuring that our regulatory framework is progressive and our infrastructure is world class, MAS is also taking an active approach to promoting industry best practices in risk management. The guidelines that we have introduced are steps in this direction. This Risk Conference is another such initiative. The objective of organising such a conference is to highlight emerging fields in risk management by bringing together risk practitioners and academics, to share their experiences and exchange ideas. Such a forum will help the industry and regulators keep abreast of the latest developments in financial risk management I hope you will find this first Risk Conference that MAS has organised useful and fruitful. Thank you. BIS Review 7/2002  3
We cannot afford over the long run a new “whatever it costs” phase if we want to preserve our capacity to invest in decarbonation and energy sovereignty in the future and not to overload future generations. To put it clearly, as a benchmark, the public share in the distribution of the cumulative burden in 2022 and the following years should not exceed current levels and reverse towards zero within let’s say two to three years. The remaining share of the burden should be distributed fairly between firms and households according to their energy consumption shares. It seems logical that a more significant share falls on firms since they are the largest ex ante consumers of energy. But the issue remains of the distribution of the burden between in particular the energy companies on the one hand and the other sectors on the other, starting with the most energy dependent. Households cannot be completely and permanently exempted from their share in this distribution. This is not easy to say, and even less easy to do; and it is essential to address the difficulties of the most disadvantaged, in particular households in rural areas who consume relatively more energy. So we need to quickly better target those who need it most. And we need to gradually but steadily reduce general support schemes which we cannot afford and do not give the right incentives over the long, or even medium, term.

This latter factor causes the current “premium” observed on electricity prices in France that are expected in the future markets for next winter. The bottom line is that it is not really possible to disentangle domestic and external factors in the rise in electricity prices, and thus to compute the additional “external tax” due to electricity. II. The ex-ante and ex-post distribution of the external tax Let me now turn to the second key issue: the question of the distribution of the external tax, or in other terms the burden sharing of the shock. I will illustrate this issue in the case of France for the energy bill only, for which more data is available at a granular level. Analysing this question involves three logical steps. First, how the increase in the energy bill is distributed “ex-ante” (as economists say) among households, firms and the general government, based on their respective volumes of energy  Page 9 of 14 consumption in the year before the price shock. In a second step, we need to take into account the fiscal measures put in place in 2021 and 2022 by the government in order to limit the energy bill of households and businesses – since they modify the distribution of the external tax. The third step should involve taking into account all the macroeconomic adjustments, in particular the pass-through of cost increases by firms in their sales’ prices and the response of wages to prices.
Insurers can be highly influential in bringing the realities of climate change into mainstream financial decision-making. To do so, we need a step change in three areas: reporting, risk management and return. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  Reporting Better corporate disclosure of climate-related financial risks is essential and the next few years will be decisive. On the demand side, current supporters of the Task Force on Climate-related Financial Disclosures (TCFD) are responsible for assets totalling $ trillion and include the world’s globally systemic banks, top 10 global asset managers, leading pension funds and insurers. Not surprisingly, supply is responding. Users of capital are providing increasingly sophisticated decisionuseful information. Four-fifths of the top 1,100 G20 companies surveyed in a recent TCFD report are now disclosing climate-related financial risks in line with the recommendations. Now is the time to get involved. The IAIS and UN Sustainable Insurance Forum are monitoring developments in disclosures closely: with a systematic survey of TCFD adoption by insurance firms and they will be publishing a paper on this early next year, including recommendations for any changes. The Climate Change Research Initiative (CCRI) will do the same. The next step is to make these disclosures mandatory. The UK and EU have already signalled their intents. But it’s time for every country to get involved because the world won’t get to net zero if the financial sector doesn’t know how our companies are responding. To watch we must be able to see.

Over the next two years, the current process of disclosure by the users of capital, reaction by the suppliers of capital, and adjustment of these standards will be critical to ensure that the TCFD standards are as comparable, efficient and as decision-useful as possible. Risk management With better information, the frontier will be to upgrade risk management and optimise returns. As the supervisor of the world’s fourth largest insurance industry, the Bank of England knows that general insurers and reinsurers are on the front line of managing the physical risks from climate change. Insurers have responded by developing their modelling and forecasting capabilities, improving exposure management, and adapting coverage and pricing. In the process, insurers have learned that yesterday’s tail risk is closer to today’s central scenario. And leading insurers also understand that the breadth, magnitude, and foreseeable nature of climate risks— mean the biggest challenge will be to assess the resilience of firms’ strategies to transition risks. That’s why, the Bank of England just set out our supervisory expectations for banks and insurers regarding their governance, risk management, strategic resilience and disclosure of climate-related financial risks. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  And in June the Bank announced that we will be the first supervisor to stress test our financial system for resilience against different climate transition pathways: ranging from early and orderly to late and disruptive.
As in Puerto Rico, the fiscal woes of many of our largest cities have been closely related to long-term economic transformations—essentially, changes in the industrial specialization that occurred in those particular places. In the case of New York City, the transformation was from manufacturing to services, and it took a generation to complete. The city’s management of that transition was far from perfect, and the fiscal crisis was the major manifestation of that failure. The institutions set up to respond to the crisis were crucial to ensuring that fiscal policy didn’t continue to amplify the problems associated with the economic transition. For a city to turn its circumstances around, it must navigate this economic transformation, identify what will define its comparative advantages going forward, and then build 2/4  BIS central bankers' speeches  anew around those sources of strength. The road to recovery A successful fiscal reform first requires a regime in which local officials recognize and accept the reality of the changing economic situation, and set spending budgets accordingly. This part is fairly straightforward, because it produces the simple policy dictum that borrowing—in all its forms—must be strictly limited. Of course, knowing what to do and actually getting it done are different things, especially when politics are involved. As a result, the record suggests that it can be extremely helpful to have some kind of independent fiscal monitor in place on an ongoing basis.

Since 2012, we have released two major reports and several shorter analyses—most of which appeared in our Liberty Street Economics blog— presenting ideas that, if implemented, might help to make the Island more competitive and reverse its economic decline. These ideas have ranged from the very narrow and technical to the very broad—from improving the quality of Commonwealth financial reporting to bolstering growth through education and job training to build the Island’s human capital. Since I’ve identified managing the ongoing economic transformation as a major component of a successful plan for Puerto Rico, let me summarize a few themes on that front. Most of these feature an important role for the Commonwealth’s government, underscoring the fundamental importance of getting public policy right as a means of restoring economic growth. First, it is important to reduce the cost of doing business on the Island as a way of encouraging business growth and increasing the demand for labor. We have put forward many ideas to consider here, ranging from ones targeted at hiring—such as giving Puerto Rico more autonomy over setting its minimum wage policy—to more general ideas like streamlining regulation. One thing that we’ve repeatedly emphasized is the need to find efficiencies in the Island’s energy industry. Commercial customers on the Island pay roughly 20 cents per kilowatt hour for electricity—nearly double the mainland average. Island residents and businesses, as you are well aware, are also burdened with exceptionally high water utility bills.