samchain/econo-pairs-v1 huggingface dataset:
Subdued inflation expectations and restrained wage demands pointed in the same direction. In view of a weak development of international activity, it was foreseen that full capacity utilisation in the Swedish economy would not be reached until the end of the forecast period, when inflation was assumed to be marginally above the target. This called for a readiness to undertake some cautious tightening of the monetary stance later in the year. At the same time, the spectrum of risks had shifted, with less risk of inflation exceeding its expected path but a continued risk of development being weaker than in the main scenario. In view of the uncertainty, the Riksbank chose to await future developments. •  BIS Review 81/1998  At the beginning of the summer we observed that inflation was following a lower path than we had assumed in the main scenario in March. Weaker import prices were contributing to this but so were other factors. Transitory effects - lower interest rates and changes in indirect taxes and subsidies - were particularly prominent. Moreover, on account of lower wage increases and stronger productivity growth than expected earlier, it seemed that inflation in the longer run would be somewhat lower than the Riksbank had predicted. With the outlook for productivity, it was likely that some surplus capacity would continue to exist during the whole period. -3All in all, inflation prospects one to two years ahead were accordingly more subdued than before and predicted inflation was below the target throughout the forecast period.

Against this background I shall be discussing the current monetary policy appraisal of the Swedish economy, together with some factors of importance for the final assessment. First, however, I shall briefly outline monetary policy’s line of thought. Forecasts and probabilities Monetary policy’s overriding objective is to safeguard the value of money. The annual rate of inflation, measured as the change in the consumer price index, is to be kept at 2 per cent. As it takes time for the Riksbank’s monetary measures to work in full, our actions have to be based primarily on an assessment of inflation’s future path. The policy horizon - the period in which most of the impact of monetary policy materialises - is around twelve to twenty-four months. The Riksbank’s assessment of future inflation is presented continuously in our Inflation Reports. Since the first Report was presented in October 1993, the content has been developed and the Riksbank has, for example, become increasingly explicit in its assessments. In the first two years the Report contained a more general account of how the inflation indicators and inflationary pressure in the economy were developing. From November 1995 onwards the Riksbank has been attaching numbers to its inflation assessments. In the June 1996 Report the inflation assessment was underpinned for the first time with an overall picture of the cyclical position. A further step was taken in September 1997, when the inflation assessment was supplemented with a path for inflation in the forecast period.
Therefore, the Central Bank cannot make any commitments related to the level of exchange rates in an implicit or explicit manner, nor use the exchange rate as a policy instrument. It is out of the question and is impossible. Under these circumstances, the value of the Turkish lira is determined in the short term by short-term expectations, developments related to foreign exchange supply and demand and the behaviors of market players, while the said value is determined in the medium and long-term by economic fundamentals, the course of structural reforms and the medium and long-term expectations. However, the fact that exchange rates are determined under market conditions does not imply that the Central Bank will not conduct any transactions in the foreign exchange markets. The Central Bank basically conducts transactions with two different aims. The first of these transactions comprises foreign exchange purchase auctions that are held with the aim of building up reserves. These transactions are conducted via daily, transparent and exchange rate-dependent mechanisms in the periods where the foreign exchange supply increases in the market and with no intention of affecting the level of exchange rates. As a result of these transactions, Turkey’s foreign exchange reserves increased by 181 percent in the last four years and reached USD 57 billion as of 25 August 2006. Nevertheless, due to the decline in foreign exchange supply, foreign exchange purchase auctions were suspended on 16 May 2006.

The probable continuation of the current upswing on the mortgage and real estate markets means that risks to financial stability are likely to remain in the spotlight. Containing these risks will continue to require the participation and support of all market players: the authorities, the lenders, and the borrowers. Thank you for your attention.
The clause in the law dealing with the transfer to the Treasury makes some for provision for whether the Bank’s capital has reached a specified minimum relative to the size of the domestic credit system. The Central Bank Act states that an amount equal to two-thirds of the Central Bank’s profit shall be paid annually to the Treasury. However, the Bank pays only one-third of its profit to the Treasury if its capital is equivalent to less than of 2.25% of the amount of lending and domestic securities in the credit system. At present the Bank’s capital is still a long way short of this legal reference level, and its annual profit will not suffice to strengthen it markedly anyway. Growth has not only soared in the Icelandic credit system, but on an increasing scale each year has also been associated with foreign markets, where credit institutions’ activities have expanded enormously. These changes also give grounds for considering other terms of reference for foreign reserves than import levels alone. As the Prime Minister stated in his speech earlier, the government responded positively to the points raised by Central Bank and authorised it to borrow abroad in the name of the Treasury in order to strengthen its foreign reserve substantially, while the government was also mandated by parliament to strengthen the Bank’s capital position. The Board of Governors would like to thank the government for such a good, firm response.

In 1972, Irving Janis called this tendency for groups to act cohesively “groupthink”. 32 Janis focused on a number of US political decisions to motivate this concept, the most celebrated of which was President Kennedy’s decision to invade the Bay of Pigs in 1961. More recently, groupthink was used to explain the Challenger space shuttle disaster. 33 Groupthink is the collective manifestation of confirmation bias – the tendency to search and synthesize information in ways which confirm prior beliefs. This, rather than alcohol, is why drunks search for lost keys under the lamppost. 34 Confirmation bias is prevalent in uncertain environments, where popular narratives are used to filter uncertainties. 35 Psychologists such as Janis have identified a number of ways to mitigate groupthink or confirmation bias. Actively encouraging dissent in groups is one. Seeking alternative perspectives from outside experts is a second. And having the group chair state their preferences last is a third. 36 Evolution of Bank of England’s policy framework Let me now describe the evolution of the UK’s macro-economic policy framework over the past half-century or so. This is a journey whose starting point was a rules-based regime over which the Bank had little discretion and whose finishing line is a regime over which the Bank exercises significant discretion. For much of its 320-year history, the Bank of England’s role in UK economic policy was as operational agent. The role of policy principal was played by government.
Empirical studies indicate that companies only change the price of goods once or so a year, on average. 2 This could be due to various costs linked to changing the price, for example, printing new price-lists. It could also be due to a fear of losing market shares if the price is raised. 3 If the prices are not changed at all, the effect of the weaker SEK/EUR exchange rate will be that the profit margins for the Swedish cheese importer fall. 4 In this case, sales can be maintained, but profits will fall. The company can also choose something in between these two cases, that is, raise the selling price by between 0 and 15 per cent. The outcome of this will depend on several different factors, such as the currency in which the purchase price is set, to what extent similar substitutes whose purchase price is not affected are available and whether the change in the exchange rate is expected to be lasting or temporary. These factors affect the pass-through of the exchange rate to inflation. What effects can a change in the exchange rate be expected to have on the economy as a whole? The pass-through of the nominal exchange rate on prices is a large area for research. In particular, researchers have studied how much a change in the nominal exchange rate will affect import prices.

But everything is relative and I believe it’s not difficult to spot black holes, mistaken notions and errors of understanding on both sides. While these Tertulias are usually an opportunity to overcome some of these problems, they most importantly allow us to understand our respective stances on current, important or pressing issues. And we also enjoy ourselves. Because, unlike other meetings, the Tertulias are, from my experience, a rather entertaining event. I still have fond memories of the meetings I attended and the discussions we had in the now distant 1990s in Santiago de Compostela, in Seville, in Santander and also in Oxford and in Edinburgh. The Tertulias were instituted at what was a key time in recent European history: the disappearance of the Berlin Wall, German reunification, the collapse of the Soviet Union and the start of the European Monetary Union project. Next came the great economic expansion at the onset of the 21st century, the international financial crisis and the serious economic problems that have affected all of us, Spain and the United Kingdom included. The European Union and the Monetary Union are today at a difficult crossroads. They face a problem which, when the Maastricht Treaty was negotiated, we knew might arise: that the Monetary Union without fiscal integration would be an edifice with weak foundations. And although attempts were made to head off the risk with public deficit and debt rules, it was known that these were merely shoring up the building and that they could not resolve its fundamental weakness.
In the June addendum, the FOMC noted that reducing the Fed’s securities holdings will result in a declining supply of reserve balances, and that it anticipates reducing the quantity of reserve balances to a level “appreciably below that seen in recent years but larger than before the financial crisis.” New York Fed staff projections for possible paths of the Fed’s securities portfolio—constructed using a distribution of market participants’ surveyed expectations for the future size of the Fed’s balance sheet (conditional on not moving to the zero lower bound at any point between now and 2025), along with some staff modeling to fill in details—suggest it will take at least several years for the balance sheet to reach its “normal” size.14 Uncertainty about the time of normalization arises from numerous sources, including future levels and variability of demand for different types of Fed liabilities, the pace at which the agency MBS portfolio will pay down, and of course the economic outlook. Assuming that balance sheet normalization continues uninterrupted, it seems likely that the future balance sheet size will be driven largely by changes in longer-run demand for Fed liabilities —in contrast to the asset-driven balance sheet of the past decade. The FOMC explains in the June addendum that reserve balances will be driven by the banking system’s demand for reserves and the Committee’s decisions about how to implement monetary policy in the future.

Constantinos Herodotou: The Significance of being financially literate and national strategies for achieving it Introduction (virtual) by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, in the Cyprus Economic Society seminar, 21 October 2021. ***  Introduction I would like to thank the Cyprus Economic Society for offering me the opportunity to introduce today's seminar, which I believe timely addresses an extremely important economic and social theme. The issue of promoting financial literacy and the role of National Strategies to achieve it are of course, relevant not only to Cyprus but also globally. Dr Chiara Monticone, a senior policy analyst of the OECD and a practitioner in the field of financial literacy with global expertise and Professor Dennis Philip, who teaches Finance at Durham University Business School, an acclaimed academic in financial literacy and close collaborator of the Central Bank of Cyprus, will have, I am sure, excellent contributions on the subject. According to a definition associated with the OECD, financial literacy is the ability of an individual to combine appropriate knowledge and skills, rational behaviour and attitudes necessary to make sound economic and financial decisions and ultimately achieve individual financial wellbeing. As more individuals operate prudently and comprehend the workings and functioning of the financial system, including how to use its services and products appropriately and efficiently, the broader economic system and society, as a whole, benefit.
With no reciprocity, although 𝜙𝑠𝐻 = −6, the foreign banks’ market share and leakage are calibrated jointly as 𝜙𝐹 𝑓  1  𝑠 ( 𝐻 (1−𝑓) = − ), a leakage of one-third, in line with the estimate of Aiyar et al (2014). And 𝑘1𝐹 = 0, so that the  𝜙𝑠  3  13  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  13  increase in resilience is proportional to the amount of domestic credit provided by domestic banks: this is set as 𝑓 = 0.11, also in line with Aiyar et al (2014). Both channels make the CCyB less effective without reciprocity. The credit leakage makes the leaning channel one-third smaller, while the assumption that resilience is lower when foreign banks hold less capital against domestic credit makes the resilience channel 11% smaller. In both the models with and without reciprocity, both countries are assumed to minimise loss functions analogous to those in appendix 2, containing only their own national objectives of inflation and output deviations, and the domestic crisis probability. 1  9)  𝐿 = (𝜋12 + 𝜆𝑦12 ) + (1 − 𝛾1 )𝛽𝐸1 𝐿2,𝑁𝐶 + 𝛾1 (1 + 𝜁)𝛽𝐸1 𝐿2,𝐶  10)  𝐿∗ = (𝜋1∗2 + 𝜆𝑦1∗2 ) + (1 − 𝛾1∗ )𝛽𝐸1 𝐿∗2,𝑁𝐶 + 𝛾1∗ (1 + 𝜁)𝛽𝐸1 𝐿∗2,𝐶  2  1 2  Domestic loss function Foreign loss function  Each policymaker takes the setting of the other’s policy as given when optimising according to their own individual loss function.

It came care of fixing the exchange rate – first to gold under the Gold Standard and latterly in the post war period to the dollar. With the demise of the dollar standard in the early 1970s, however, the exchange rate anchor had been tossed overboard. At the Bank of England, as elsewhere, the search was on for a new nominal anchor. Into this vacuum stepped Andrew Duncan Crockett. Crockett joined the Bank in 1966 as a graduate entrant, just before the break-up of the Bretton Woods dollar standard. He set to work on the biggest problem of the day, locating a new nominal anchor. In so doing, he began working alongside another young(ish) new Bank entrant, Charles Goodhart. The result was a joint paper published in the Bank’s Quarterly Bulletin in June 1970. It was titled “The Importance of Money”.11 Re-reading it now, it was a prophetic piece of work. In the UK, it laid some of the analytical foundations for what, during the late 1970s and 1980s, became monetarism. More than that, the paper placed commercial bank money and credit at the centre of the macro-economy. It could as well have been titled “The Importance of Credit” or indeed “The Importance of Banks”. After a successful spell at the IMF, Crockett returned to the Bank of England in 1989. In 1994, he then became General Manager of the Bank for International Settlements, the central banks’ central bank. In central bank circles, change was in the air.
Philipp Hildebrand: Setting the course for the Swiss economy – challenges for the Swiss financial centre and outlook for the future Summary of a speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, to the Zürcher Volkswirtschaftliche Gesellschaft, Zurich, 17 May 2010. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss banks face two major challenges. First, sooner or later, they will have to carry out their core business – asset management for foreign customers – in a tax-conform environment. Second, the big banks will be required to operate under more stringent regulatory requirements. These challenges are likely to lead to structural changes in the financial centre. How are such changes likely to affect the Swiss economy? An empirical analysis shows that, although the financial centre plays an important role in the Swiss economy, it also entails considerable risks. In the case of cross-border asset management, the relationship between the risk to the economy and the income earned is acceptable. However, this is hardly the case for the banks’ own trading activities. Consequently, current regulatory efforts could not only improve the stability of the financial sector, but also increase both the profitability of banks and the benefit which the Swiss economy derives from the financial sector over the long-term period.

Ladies and gentlemen, Non-bank financial institutions are a significant component of the financial sector as their assets constitute a significant proportion of the total financial sector assets in most countries in the region. Similarly, microfinance institutions play a critical role in poverty alleviation and economic empowerment of marginalized communities in our region. As such these institutions are systemically important as they can exacerbate the fragility of the financial system particularly where there is lack of effective regulation. Over the past few years, we have seen a trend where these institutions have increased in numbers in our region; some have been established as part of financial conglomerates while others are on a standalone basis. Sadly, our supervisory and regulatory structures for this sector in the MEFMI region have remained rather incoherent and somewhat underdeveloped to handle the challenges that have been identified with this sector. The trend makes it more important than ever for supervisors in the region to get together and talk about matters of common interest. I am pleased to note that over the past few years, the region has taken a proactive stance towards promoting harmonisation of regulatory and supervisory frameworks and the integration of financial systems. Through MEFMI, SADC, COMESA, the East African Community (EAC) and the West African bloc, member central banks are working together to promote effective supervisory standards geared towards achieving long term goals of financial inclusion and financial stability.
Such a prudential regulatory design would further complement concurrent efforts that are underway to develop Islamic financial markets and Islamic financial instruments. This architecture will contribute towards the development of a robust and resilient Islamic financial system that can effectively preserve financial stability and contribute to balanced growth and development. Ladies and Gentlemen: In recognition of this need, a proposal was made two years ago to establish an organization to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the Islamic financial services industry internationally. This proposal was crystallized and endorsed during a consultative meeting of a group of Central Bank Governors, and officials from the Islamic Development Bank (1DB), the Accounting and. Auditing Organization for Islamic Financial Institutions (AAOIFI) and the International Monetary Fund (IMF) in Prague in September 2000 during the occasion  BIS Review 64/2002  1  of the lMF-World Bank Annual Meetings. The endorsement set in motion the formation of a preparatory committee, with officials from Bahrain, Iran, Malaysia and Sudan, and representatives from the IMF, IDB and AAOIFI, to develop the terms of reference and operational structure for the Islamic Financial Services Board. In a meeting of Governors in April this year, Malaysia was mandated to lead a Steering Committee for the establishment and inauguration of the Islamic Financial Services Board in Kuala Lumpur. Today's historic event is the culmination of this extensive two-year consultative process.

Ladies and Gentlemen: A greater understanding of Islamic banking and finance on the international front would contribute towards our efforts to reinforce the on-going international initiatives towards fostering greater global financial stability. In this regard, the participation of other financial supervisory and regulatory authorities, and other international standard setting organizations would facilitate this process to achieve our shared interest of preserving the soundness and stability of the Islamic financial system. Ladies and Gentlemen: It has been said that Islamic banking and finance is a "mirror of the sea" for until and unless we have the courage to explore its depth, we would never be able to uncover the treasures that reside within. Islamic banking as a new sphere of finance promises vast opportunities and benefits for all. Its integration into the global financial system will contribute towards achieving our shared aspirations for financial stability to ensure balanced growth in the global economy. BIS Review 64/2002  3