samchain/econo-pairs-v1 huggingface dataset:
So when Gordon Brown announced radical changes to the Bank of England and the monetary policy framework two years ago they were widely welcomed because they offered the basis for a durable commitment to price stability. What, then, is the substance of the main reforms announced in May 1997? First, there is a clear and unambiguous objective for monetary policy – an inflation target of 2½%, set by the Government, with inflation defined as the increase in retail prices, excluding mortgage interest  1  BIS Review 63/1999  payments, over the previous twelve months – RPIX inflation. Second, decisions on interest rates are taken by a Monetary Policy Committee, or MPC, comprised of nine individuals with expertise in monetary policy – five executive members of the Bank and four non-executives – who operate on the basis of one person one vote. Third, the process is characterised by a high degree of transparency and accountability, both to provide the public with explanations of the MPC’s actions and to hold members of the MPC individually accountable for their decisions. Have these reforms made a difference to the UK economy? My aim this evening is to pose and begin to answer three questions about the MPC two years on. (1) What is the track record of the MPC after two years? (2) What has the MPC learnt during that period? (3) What are the challenges for the next two years? What is the MPC’s track record?

To address the pressing issues facing home and host country relations in this context, the Vienna Initiative was relaunched as “The Vienna Initiative II”. It focuses on fostering homehost authority coordination to support stable cross-border banking, and help protect the economy from disorderly deleveraging. As a member of the Steering Committee of the Vienna Initiative II, I have underlined the need for a more effective home-host coordination, promoting Albania’s position as a host country. Given the geographical proximity and high exposure to recent developments in the EU  BIS central bankers’ speeches  1  financial markets, I am confident that our countries would significantly benefit from developing a regional perspective on risks and opportunities arising from such developments, and major supervisory reforms at the regional level. In this context, Albania’s membership in the Steering Committee of the Vienna Initiative, and the Working Group on Banking Union and Emerging Europe is a solid foundation to build upon and synthesize the common concerns of our countries vis-á-vis EU authorities. Allow me now to summarize the insofar position of the Bank of Albania, articulated in the framework of the Vienna Initiative II, and propose a number of discussion topics, which I am confident will lead to a fruitful exchange of views today. The Bank of Albania has called for effective mechanisms to restore healthy lending to the economies of non-EU countries, where systemic subsidiaries of EU banking groups operate. In this context, EU authorities and EU banking groups should provide their active contribution.
It was clear in September that the labour market had tightened further. The increase in the number of persons employed had been around as large as we were expecting in the June Report. However, the number of people in the labour force had not increased at the same rate we expected then. This meant that unemployment was also lower than we had predicted. Given these signs of a tighter labour market, it was fairly reasonable to believe that wages would increase more rapidly in future than they had done in previous years. But we could note that this was not yet visible in the statistics. The picture painted by the National Mediation Office’s statistics shows very moderate increases. But as I pointed out at our September meeting, it is probable that this picture will change when the new central wage agreements signed in the spring begin to make their mark in their respective sectors. And just as for developments in the labour market as a whole, this is something we follow closely. As I have just noted, it is now clear that an increasing number of people are working. It is normally the case that when many new people obtain work towards the end of an upturn phase of the economic cycle, the work is a little less efficient, that is, productivity growth declines. And this is just what we have seen during the first half of this year.

Irma Rosenberg: Monetary policy and the Riksbank’s communication Speech by Ms Irma Rosenberg, First Deputy Governor of the Sveriges Riksbank, at Swedbank, Stockholm, 8 October 2007. *  *  *  Introduction In recent decades there has been a clear trend for central banks to strive for greater openness in their monetary policy. Central banks are now publishing an increasing amount of background material in the form of analyses and forecasts for inflation and other economic developments. The number of countries introducing explicit inflation targets is also growing. Something that is being discussed to an increasing extent, but which not so many central banks have dared to carry out yet, is the publication of the central bank’s own forecast for its policy rate 1 . At the beginning of this year the Riksbank decided to take this step. The purpose was to become even more open and clear regarding the way we conduct our monetary policy. I will begin today by discussing this new system and how it affects our communication. I will also give some reflections on the experiences of the two occasions on which we have published our own interest rate path in connection with the Monetary Policy Reports published in February and June this year. I will then conclude with a few words on the most recent monetary policy meeting in September. The Riksbank’s communication with an own interest rate path Advantages of an own interest rate path What are the advantages of publishing our own forecast for the repo rate?
2  BIS central bankers’ speeches  investors in critical nonbank markets, such as the Commercial Paper Funding Facility (CPFF) and the Term Asset-Backed Securities Loan Facility (TALF).3 Since the federal funds rate target reached its effective lower bound late in 2008, the FOMC has considered additional ways of providing further policy accommodation. At the direction of the FOMC, the Desk has designed and implemented asset purchase programs that have greatly expanded the balance sheet of the Federal Reserve and changed the composition of the types of assets it holds. Market monitoring and the knowledge of market functioning has been crucial for the effective translation of broad policy directives for these purchase programs into concrete operational plans. In the case of agency mortgage-backed securities (MBS) purchases, initially the Federal Reserve used external investment managers, acting at the direction of the Desk, as a means of implementing MBS purchases. This was necessary because the Desk had not transacted in MBS prior to the crisis and thus did not have either the systems or the market knowledge needed to execute purchases efficiently. As the Markets Group staff developed the operational capacity and analytical expertise, partly by working closely with the investment managers, it began to execute MBS purchases and assumed full trading responsibility in March 2010. Prior to assuming their trading role, staff gained an in-depth understanding of the fundamental aspects of the MBS market and technical trading conventions. This expertise allowed the staff to effectively synthesize numerous market indicators and apply them to its trading.

If the rules proved to be flawed, they should still be enforced, for credibility’s sake; but later changes should be made to the rules. BIS central bankers’ speeches  1  •  Animating spirit of ‘prudential supervision’ is completely different. Impossible to write down a complete (or even adequate) set of binding rules on the financial health of a bank (or on the substance of the professional competence of bankers). Instead, things like capital ratios or liquidity ratios are really indicators of financial health. •  This is reminiscent of an old debate in monetary policy. Thirty-odd years ago, policy was meant more or less mechanically to follow targets for broad or narrow monetary aggregates. It didn’t work: the economic world was not sufficiently stable. Since we adopted inflation targeting, central banks have had an eclectic approach to indicators. We are constrained by a clear medium-term objective (2% CPI target), but do not use a set of supposedly fool-proof core intermediate indicators. •  No more can we write down hard and fast rules on bank balance sheets. •  Nor, consistent with Parliament’s wishes, is the Prudential Regulation Authority seeking to achieve a zero failure regime. The failure of individual firms has to be an acceptable outcome so long as they can be wound down in an orderly way.
In addition, through the supervisory process, we will continue to look for weaknesses in our supervised institutions that expose them to potential fraud. While the Bank of Thailand is here to support institutions in this manner, please keep in mind that the primary responsibility for fraud prevention remains with the board of directors and management. I would be remiss in not addressing the upcoming launch of the revised Basel Capital Accord. Basel II, as it is more commonly known, establishes expectations for financial institutions’ risk management processes. In addition to requiring an explicit calculation of capital requirements for credit and operational risk, Basel II requires institutions to have robust consolidated risk management processes. Institutions are expected to ensure that they have adequate capital for all other risks as well. Through the supervisory process, regulators may also require additional capital for institutions whose risk management processes are not fully compliant. Institutions can best address the expectations of Basel II by maintaining or establishing sound risk management processes. In Thailand, the implementation of Basel II will start at the end of this year, and the preparation for its implementation is progressing on schedule. As our institutions complete  2  BIS Review 52/2008  the implementation of Basel II, I firmly believe that we will see a commensurate improvement in the quality of risk management among our banks, particularly in the operational risk area.

Fraud can occur in a variety of ways: the inappropriate actions of a rogue employee can cause huge losses; hackers can access a bank’s mainframe or databases, which in the past few years, has resulted in increasing losses due to the theft of confidential customers’ information. Depositors affected by ATM or Internet banking fraud also continue to increase. Although fraud is impossible to fully prevent, financial institutions can reduce the probability of fraud occurrence and minimize losses with stronger oversight and tighter controls. This leads me to the Bank of Thailand’s views on the critical elements for fraud prevention. There are three critical elements that all institutions must possess to most effectively combat fraud: Strong corporate governance, up to date systems and processes, and effective internal controls and risk management. The first and most important element is strong corporate governance. Today, more than ever, boards of directors and senior management must provide close monitoring and oversight as the business activities of their institutions are increasingly complex and as the level of sophistication of their customers continues to increase. In almost every case where fraud has resulted in huge losses, ineffective corporate governance was identified as one of the primary causes. Boards and top management must set the “tone at the top” by creating an organizational culture that places high priority on risk management, compliance with policies and regulations, and high standards of ethical behavior at every level.
The Slovak economic miracle: It is, of course, impossible not to make comparisons with our eastern neighbour Slovakia, the only member of the Visegrád club to have adopted the euro, which it did in 2009. Unfortunately, here more than anywhere else it holds that the data say nothing and 2/4  BIS central bankers' speeches  interpretation holds sway. So how about this? For years before and after introducing the euro, the Slovak economy has constantly been catching up with the wealthier countries, including us. We, meanwhile, are constantly catching up with the countries to our west. Economics rather relies on the poorer catching up with the wealthier. And the richer a country is, the harder it is to catch up. Looking at the numbers, Slovakia is still 10% behind the Czech Republic in terms of economic output and above it in terms of the price level. It’s a poorer and more expensive country. Yet tens of thousands of Slovaks still travel from this euro paradise to the Czech Republic to work and study. An equal but opposite flow is nowhere to be seen. 7. The Prague-Copenhagen connection: I have to add with some bitterness that many in the Czech Republic like having their own currency but not necessarily their own monetary policy. This magical contradiction can be seen in the pleiad of ostensibly conservative political opponents of the euro in the revitalised euro debate.

Referring back to the performance of inflation, INSTAT data reveal that consumer prices rose on average 2.5% in the first quarter of 2013. Inflation continues to be determined by food prices; their contribution accounts for about 90% of headline inflation. Moreover, food inflation was offset by the lower inflation of non-food consumer goods. Inflation of this category reflected the downward oil price, following its decline in international markets. Also, the price fall of long-term consumer goods provided downward effects, whereas prices of other consumer goods did not change significantly. From the macroeconomic perspective, inflation continues to reflect the weak pressures from the aggregate demand-side and the absence of supply-side shocks. Below-potential growth of aggregate demand leads to underutilisation of production capacities and generates weak pressures on increasing wages, producer prices and profit margins. Under these circumstances, internal pressures on consumer prices appear weak, as reflected by the low core inflation. On the other hand, imported inflation was subdued due to the low inflation in Albania’s trading partners and the stable exchange rate. The most recent data on the real economy are as at 2012 Q4. According to these data, the Albanian economy grew 1.7% driven by expanded activity in the services, industry and agriculture sectors. The activity of the construction sector continued to shrink. Data on economic activity for the first quarter of this year remain limited. Based on indirect indicators, our analyses point to low economic growth, relying mainly on foreign demand, while the domestic demand components continue their sluggish performance.
This is hardly the picture of an economy in a state of recession or crisis. Low inflation difficult to predict – for the Riksbank and others But what about inflation? It has become very low and prices have even fallen at times, at least when measured in terms of the CPI. Is this not a sign that the policy has failed and that the repo rate should never have been raised? It is important to understand two things here. Firstly, it should be clear from what I have just described that the low inflation is not a result of an economy that has been brought to its knees. The picture of high interest rates causing a more or less recession-like state that has in turn resulted in low inflation, and sometimes deflation, is thus incorrect. Secondly, as I have also mentioned, a lot has happened in recent years that has had an effect on inflation. Remember the National Institute of Economic Research’s forecast in the middle of 2011, which I mentioned earlier. In this, the repo rate was expected to continue to rise, from the 2 per cent level it was at then, to around 4 per cent in 2014. This policy was considered compatible with an inflation rate of around 2 per cent in 2013–2015.

I would now like to address the objectives that we are yet to complete. The most pressing problem is lending to business owners. The standard N25 restricting financing of one’s own projects was introduced this year but is still only applied in a preferential mode. Lending to owners is dangerous for two reasons. First, the bank will turn a blind eye to risks linked to its own company when issuing it a loan i.e. the risk of non-return. Second, our practice has shown that if the owner’s project really experiences difficulties the last place it returns money is the affiliated bank. These are not marketable loans but loans extended by unwritten rules. Banks cannot refinance or resell them. In the end, this is the cause of bankruptcy for many banks. It is one of the factors that led to the collapse of relatively large banks, whose licenses we revoked. We want the banking community to know that our intentions in this field are serious and we will continue to take a tighter stance. Therefore, I advise those whose business model is built on lending to owners to seriously consider finding alternatives. Yet another problem is the quality of banks’ capital. We need to be confident that our banks have real, not borrowed, capital. Therefore, as of this year we will be introducing tighter regulation on the quality of capital. When calculating a bank’s capital, we will not take funds from nontransparent sources into account. There is another whole host of problems associated with collateral.
Issuers that are rated, in comparison, also gain access to a broader investor base, as many institutional mandates invest only in rated bonds. To encourage rated issuances, rated issuers will be eligible for a larger grant quantum under the Asian Bond Grant. 21 Ratings can also benefit bond issuers. In the Singapore Dollar bond market, we have been encouraging frequent bond issuers to obtain credit ratings. The Housing and Development Board (HDB) is an example of a frequent domestic issuer that recently obtained a rating and benefited from tighter issuance spreads. About 40% of outstanding Singapore Dollar bonds are rated 15, and we would like to see this share go up. To give this another boost, we are considering ways to nurture a healthy and sustainable credit rating culture in our bond market. For instance, under the Asian Bond Grant scheme, for Singapore Dollar bonds, only rated issuances would be eligible. Another possibility we are considering is to help existing issuers offset the costs in obtaining a credit rating. 22 Even as we encourage more rated issuances, I must caution against basing investment decisions solely on ratings. Regardless of whether a bond is rated or not, investors need to make their own credit assessments. Perhaps more importantly, and as the saying “do not put all our eggs in one basket” goes, the key to long-term investing is diversification and avoiding concentrated exposures to any one security. This approach is inherent in the way institutional investors manage portfolios – broad diversification across asset classes, sectors and securities.

ASIFMA has supported that journey over the past ten years by improving transparency through market surveys, advocating innovative solutions through white papers and roadmaps, and building consensus on best practices through events like these and collaboration with other industry bodies. 28 The economic opportunities in Asia are immense, and despite the cyclical slowdown, the region’s financing needs will continue to grow. Asia needs to continue strengthening its capital markets, especially its bond markets. Singapore will support Asia’s bond market by introducing a new Asian Bond Grant scheme, encouraging rated issuances, and supporting secondary market liquidity. 29  Please enjoy the rest of the conference. Thank you.
The opening up of the economy did not only not lead to the disappearance of industry and agriculture; it also raised Spaniards' standard of living significantly. In short, what was apparently a singular system protecting us was leading us down the road to disaster. It was not until an acute crisis hit us hard at the end of the 1950s that we realised  4  BIS Review 18/2009  that what distinguished us from other countries and what we thought was protecting us was actually achieving the opposite. It is now precisely in Spain, where employment protection purports to be in good health thanks to the high unemployment severance packages on top of government benefits, where labour shedding in the face of the current economic crisis is proving fiercer than in other countries. For this reason we should study the experience, for example, of Austria and Denmark, whose labour market reforms can offer us some ideas for reform at home. In Denmark, where the unemployment rate is 4.1%, the authorities opted to improve regular benefit payments and to practically eliminate redundancy payments. In Austria, where the unemployment rate is 3.8%, firms set up an individual fund for each worker which becomes available if workers loses their job, acting as a top-up to government unemployment benefits. When workers find employment in another firm, the unused portion of the fund goes with them and starts growing once again with the new firm’s contributions.

And that might feed the illusion that, once the recession is behind, all countries will recover in the same way. But that will not be so. Each country has singular features that will prove pivotal when defining the path to follow once the crisis is over. Accordingly, my reflections will focus on what distinguishes us from others. The Spanish experience shows that, from 1985 to 2008, growth in the economy was outpacing the EU average, with the sole exception of 1992 and 1993. This spectacular growth over the past 23 years has allowed us to draw closer to the welfare levels enjoyed by the most prosperous EU countries. But what will happen to the Spanish economy when we emerge from the current crisis? Will we witness such satisfactory growth as in the past? The reply, as always in economics, is that "it depends". If we do what we have to do, if the necessary reforms are made, we will once again grow above the European average. But if  BIS Review 18/2009  1  we do not reform we will probably grow at or below the EU average, with convergence with our main economic partners being checked. Yet if we have been able so far to advance without these reforms, is it absolutely vital to adopt them now? Before answering that, let us look at the causes of growth in the Spanish economy in recent decades.