samchain/econo-pairs-v1 huggingface dataset:
One reason for this is that after the Asian crisis and its repercussions, there is still unutilised capacity in the world economy. Another important factor is increased price competition. In addition, the pass-through from external price increases to prices in Sweden will be dampened by an appreciating krona. In our main scenario, moreover, the barrel price of crude oil is assumed to fall back from the present level around $ to just over $ The stronger international growth has also contributed to an upward revision of the Riksbank’s forecast for the domestic economy. Growth is now expected to be 3.6% this year, followed by 3.8% and 3.0% in 2000 and 2001. The upward revision also mirrors higher domestic demand growth. Firms as well as households are optimistic about the future. Real wages and employment are now rising rapidly and so is household income, particularly as fiscal policy is less restrictive. This is accompanied by rising corporate investment in the coming years. (Figure 2). BIS Review 111/1999  4  One component of the present picture that warrants the Riksbank’s attention is the development of asset prices. Share prices are high and a nationwide increase in house prices has started in the past year. House prices in Greater Stockholm, for example, had already risen substantially before that. This increases the consumption and investment propensities of households and firms.

An improvement in the workings of the economy can show up just as a larger supply of resources, be they capital or labour. To date in 1999, for instance, employment has been provided for more than 100,000 people without any signs of appreciable shortages. To me at least this is a welcome surprise. But one should not make too much of it; if we have in fact seriously misjudged how the labour market is functioning, one would expect wage increases to be lower than has been the case. It is also worth noting that the rate of wage increases in Sweden continues to be higher than elsewhere. Another difficult matter is the effect on inflation from a given level of resource utilisation. This was examined in a box in the latest Inflation Report. The results suggest that the Swedish economy can cope with somewhat higher resource utilisation than before without an acceleration of inflation. There is also a good a priori case for this. Raising prices, for example, should be more difficult in an economy where prices fluctuate less. It follows that firms should then put up more resistance in wage negotiations. It is also conceivable that increased international competition, for instance, has left firms with less room for price increases, at least for a time. Finally, then, what about the role of inflation expectations? They have indeed come down substantially in the 1990s, from 6–8% to 2%.
More importantly, the available evidence suggests that participating banks (both Spanish banks and those in the euro area as a whole) have used a significant portion of the funding received to continue to provide credit to the real economy.2  1  See the speech delivered by the Governor of the Banco de España “The role of the European Central Bank’s monetary policy in the COVID-19 crisis”, October 2020. 2 See, for example, the Bank Lending Survey (BLS) for October. For a summary of the results of the survey for the Spanish banks participating in the survey see Á. Menéndez Pujadas and M. Mulino (2020), «The October 2020 Bank Lending Survey in Spain», Analytical Articles, Economic Bulletin, 4/2020, Banco de España. 2  The second block of measures related to asset purchase programmes. Since late February, financial conditions had tightened in the euro area, with both corporate and sovereign risk spreads widening considerably. This spread widening in the euro area was uneven: countries that started from weaker fiscal positions, with higher debt levels, and those that were most affected by the first wave of the pandemic experienced a much more pronounced increase in their financing costs. This cross-country financial fragmentation was a challenge for the transmission of a single monetary policy throughout the euro area, and even posed a threat of a repeat of the 2012 sovereign debt crisis. In this context, in March the ECB announced the launch of the pandemic emergency purchase programme (PEPP).

It affects the way financial decisions 2  BIS central bankers’ speeches  are made, including decisions relating to savings and spending, borrowing and lending, investment and profit distribution, and it is relevant to all economic agents, be they households, businesses or governments. Soundness of financial governance is a critical prerequisite for the sustainable growth of any economy. Having said that, we also have to recognise that the process of economic growth itself is an outcome of a system that is highly complex and adaptive, and that a country’s economy, polity and society – and the institutions that underpin each of these – are embedded within a complex network of interdependencies. Therefore, there cannot be a one-size-fits-all prescription of what constitutes good financial governance for all economies. Nevertheless, I do believe that we can recognise the presence or absence of good financial governance based on broad characteristics. In this regard, three key inter-related features are typically present when there is good financial governance. Firstly, effective financial governance ensures that financial decisions take into account all externalities arising from the decisions. Financial decisions often have consequences that are not fully borne by the decision maker. Financial decisions that may appear rational at the individual level, may in fact be collectively unsustainable. For instance, corrupt practices may be optimal for the individual perspective, but they are clearly detrimental to the welfare of society and the economy.
Elvira Nabiullina: Current problems in the post-pandemic economic recovery Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at the plenary session of the Federation Council meeting, 22 September 2021. * * * Good afternoon, Ms Speaker and colleagues. Thank you very much for inviting me to speak today, on the first day of the autumn session. In my speech, I would like to focus on current problems in the post-pandemic economic recovery. Undoubtedly, we are pleased about its rapid pace. Yet, the economic rebound is bringing some side effects that we must counter to ensure the stability of our economy, the financial system, and ultimately, the well-being of our people. The economy has now returned to the growth path it would have been on but for the pandemic. Certainly, central to the successful delivery of anti-pandemic measures have been the Government’s budget support measures alongside the prompt efforts of lawmakers to set up a legal framework for anti-crisis response measures. In turn, we at the Bank of Russia have granted regulatory relaxations to banks to support consumers and businesses, and to restructure and issue new loans in this challenging period. Our monetary policy has been accommodative. It was only after we made sure that the economic recovery was becoming sustainable that we started to raise the key rate. Certainly, I will explain why we are doing this as I know that there are many questions on this subject.

Banks and microfinance institutions are now obliged to disclose to borrowers the total loan cost to rule out situations where borrowers end up paying more than agreed under seemingly clear terms. 2/5  BIS central bankers' speeches  Running ahead, we think that there is a need for more stringent legislation in that area, considering that banks have adjusted and some of their ‘offerings’ circumvent the requirement of disclosing the total loan cost, that is the amount they are required to make clear to the borrower. Against the background of economic recovery, disbursements of unsecured loans have accelerated. As I have said, this is driven by high inflation expectations (when people expect higher inflation, they try to buy goods on credit) and fairly attractive interest rates. Banks like this situation, without doubt. They are looking for ways to circumvent our restrictions. For example, we have seen a rise in the share of consumer loans (I mean consumer loans, not mortgage loans) with more than five years’ maturity (from the pre-pandemic 11% to 21% in the second quarter of this year). On the one hand, by extending loan maturity, banks reduce monthly payments, making a loan seemingly more affordable to borrowers. Yet, the total amount of debt per borrower is increasing. This is normal for a mortgage that is issued for a long period (and with much lower rates), but those long periods for unsecured loans are unreasonable and are set to entail problems. We already see a deterioration in consumer lending standards.
That’s why about two-thirds of the Mainland’s two-way capital flows consistently go through Hong Kong. 25. Some argue that this advantage is temporary. As China’s domestic capital markets open up, the argument goes, surely international capital can bypass Hong Kong and go directly to Shanghai and Shenzhen? 26. It is true that the Mainland authorities are pursuing further liberalisation of the onshore capital markets. This was evident in a series of reforms to the Qualified Foreign Institutional Investor regimes last year. Access to the China Interbank Bond Market has also been enhanced, making it easier for investors anywhere to directly access this 16 trillion US dollar market. 27. And yet Hong Kong’s own portal to Mainland bonds is more popular than ever. Orders going through our Bond Connect link to China’s Interbank Bond Market account for more than half of its turnover by foreign investors. More than 2,400 institutional investors are registered on the platform. And Bond Connect has continued to grow right through the social unrest and pandemic: volumes rose by 82 per cent in 2020. 28. Hong Kong’s two Stock Connect links – with Shanghai and Shenzhen – are also very popular with international investors. Average daily turnover on Stock Connect more than doubled last year. ‘Northbound’ traffic from here to the Mainland rose by 119 per cent. This reflects continued global demand for Chinese securities as their weighting in benchmark indices increases. 29. And investors choose Stock Connect for the same reason they choose Bond Connect.

© Swiss National Bank
The increases in official interest rates scarcely fed through in 2005 to longterm interest rates, which led to the forceful flattening of the yield curve, an unusual occurrence at this  BIS Review 60/2006  1  stage of the cycle, although the rise in long-term yields in the opening months of 2006 is contributing to lessening the scale of this discrepancy. Finally, the increase in household wealth, stemming from the rise in the value of financial and real-estate assets, eased the drag on real income arising from dearer energy products in the oil-importing countries. Yet there has been a significant contrast between this optimism on financial markets and the wariness of companies, mirrored by slack investment in the real sector which is particularly striking if regard is had to the favourable trend of corporate profits. Several explanations have been offered for the muted performance of business investment in recent years, such as the difficulties in valuing investment in intangible assets appropriately, over-investment in the second half of the nineties (which caused surplus capacity in recent years), the ongoing reduction in corporations' financial leverage, the uncertainty generated by globalisation and companies' caution following the recent changes in the legislative and accounting framework in the wake of the corporate scandals in some countries. Insofar as some of these factors are probably transitory, greater investment momentum may be expected in the coming years.

That led in December 2005, and in March and June 2006, to respective quarterpoint rises in official interest rates from the historically low level of 2% at which they had held since  BIS Review 60/2006  3  June 2003. Despite these rises in official rates, the Eurosystem's monetary policy stance has remained propitious to the firming of the pick-up in activity and job creation. Nonetheless, the ECB is closely monitoring developments in the euro area to ensure inflation expectations remain in line with price stability over the medium term. Budgetary policies adopted a moderately contractionary stance in the area as a whole, although the persistent fiscal imbalances in several Member States continued. Consequently, the current firming of higher growth rates should drive more resolute action to correct these imbalances, the persistence of which may, in some Member States, have dented agents' confidence and may thus affect their spending decisions. The reform of the Stability Pact appears to have successfully concluded a phase of uncertainty over the application of regulations relating to the fiscal policy discipline of the euro area countries. However, preserving the credibility of the new framework requires an unequivocal and ongoing commitment by the national authorities to strict compliance with the Pact. The recent persistence of sluggish growth rates, despite highly favourable financial conditions, highlights the pressing need to see through the European structural reform agenda with firmer resolve. The revision of the Lisbon strategy in 2005 may contribute to driving this process.
7  BIS Review 121/1999  Chart 8  Norges Bank’s key rates  12  12  10  10  8  8  Overnight lending rate  6  6  1-week rate  4  4  Deposit rate  2  2 0  0 1996  1997  1998  1999  Source: Norges Bank Legg inn filadresse her  6. The mandate  Let us turn to the mandate for monetary policy and how Norges Bank interprets its role and responsibilities. The political authorities formulate Norges Bank’s mandate for the conduct of monetary policy. The mandate is laid down in the Exchange Rate Regulation, adopted by Royal Decree of 6 May 1994. Section 2 of the Regulation states:  Chart 9  The Regulation of May 6, 1994  • “The monetary policy to be conducted by Norges Bank shall be aimed at stable exchange rates against European currencies, based on the exchange rate maintained since the krone was floated 10 December 1992.” • “In the event of significant changes in the exchange rate, policy instruments will be oriented with a view to returning the exchange rate over time to its initial range.

Others have suggested that the event window on October 15 is a byproduct of regulatory changes that have reduced traditional dealers’ ability to serve as shock absorbers during periods of volatility by accommodating large net order flows. In particular, some market participants argue that recent regulatory changes have increased the cost that dealers face when expanding their balance sheets, leaving them less willing to do so for relatively lowmargin businesses, such as making markets in Treasury securities. If true, it may help explain how an unwinding of large positions, as may have been observed in the sixty minutes after retail sales on October 15, could have had such a large impact on yields. But it is far from clear that such changes, on their own, can explain the round-trip in prices during the event window itself. That said, it is possible that the dominance of electronic and automated trading and the changing composition of participants in the Treasury market have interacted with changes to dealer behavior – whether the result of regulatory incentives or other reasons – in a manner that makes unusual intraday price moves more probable. While it is precisely the intention of many recent regulatory initiatives to ensure that financial firms hold sufficient capital to support the size of their balance sheets and risk taking activities, there could be unintended consequences of these regulatory changes, including the possibility that sharp intraday price moves become more common.
Ladies and Gentlemen, At this moment, high oil prices have put both advanced and developing economies alike in a very tough spot. Unfortunately, for Thailand, when it comes to oil shocks, we are not as resilient as many other economies as our economy depends heavily on oil. In fact, Thailand’s oil dependency ratio, although has been falling, remained among the highest in the world since our logistic system has been neglected for sometime. Prior to the recent hike in oil prices, Thailand was on the path to recovery. Indeed, economic growth picked up since the third quarter of last year with an expansion from 4.7 percent to 5.7 percent and 6.0 percent in the subsequent quarters, respectively. Domestic demand strengthened; consumption, investment and imports, all accelerated while exports performed rather well. This was a clear recovery pattern. Up to the end of the first quarter, the sentiment was lifted to a better prospect for Thailand, with many expecting average 6 percent growth for this year. Unfortunately, the story did not end there. Oil prices soared again, passing the 120USD mark in May. Despite some correction last week, oil prices remain much higher than where they were the beginning of this year. Compounding this negative external shock was the return of street protests.

The key to high-performance economy inevitably lies in supply-side policies that raise the economy’s potential growth. BIS Review 98/2008  5  The fact that supply-side policies take time should urge the government to hasten such policies. However much conflict of interest between a fixed-term government and long-term policies may be, it is important to realize that raising productivity, and hence the economy’s potential output, is ultimately the key to raise economic performance without provoking subsequent instability. As mentioned earlier, Thailand needs to be more resilient to oil shocks. For example, it is now a good opportunity to shape up our logistic system. Much integration needs to be done to coordinate the use of rail, road, river, and air transportation. Ladies and Gentlemen, My main message for you this evening is that the key for a successful economy is to preserve competitiveness and to grow at the potential rate as well as raising the potential output. This is to ensure both the performance and the sustainability of an economy. Many central banks are doing this through inflation targeting. At present, the risk of political uncertainty not only lies in terms of consumers and businesses’ confidence, but also in the efficiency of the government to pursue policies that raise productivity. As negative supply shocks persist, the better the job done by the government to enhance productivity, that is, to secure our potential output, the lesser the cost of economic stabilization. Thank you very much for your attention. 6  BIS Review 98/2008
This is what has been happening in Chile since the prices of foods and fuels began soaring in an unprecedented way in early 2007. Constraining the monetary policy in the presence of a commodity price hike has its costs, but as we have stated a number of times, failing to tackle the inflationary problem opportunely leads to much higher output costs in the future, because inflation becomes much more entrenched. On the contrary, when facing demand shocks the inflation targeting regimes are particularly useful, and that is the scenario we are seeing today. To rein in inflation, it is necessary to slow down growth via a more contractionary monetary policy. However, if output slowdown is caused by forces outside the monetary policy, the policy rate dosage should be small compared with that where the external scenario does not contribute to the deceleration,  5  For details on the European case, see Berger and Stavrev (2008). In Chile, there is no evidence, either, indicating that monetary aggregates improve inflation forecasts. For discussions on money and monetary policy, see papers in Cuadernos de Economía’s December 2003 issue (De Gregorio, 2003; García and Valdés, 2003; Vergara, 2003). BIS Review 150/2008  3  meaning that monetary policy conduct is countercyclical, reducing inflation and containing the demand slowdown. Financial stability Although more often than not, central banks have an explicit financial stability objective, for many years, and within a context of strong GDP growth and sound balance sheets of banks and firms, this was a second-class issue.

The high level of public debt is harmful to the economy’s financing conditions, it restricts the countercyclical leeway of budgetary policy and it means a high volume of resources must be set aside to pay the interest burden. There is room, moreover, for the fiscal consolidation process to be compatible with a revision of the structure of public revenue and spending, making it more efficient and  3/5  enhancing its contribution to growth. And, at the same time, a greater degree of fiscal coresponsibility should be promoted across the different tiers of general government. It is likewise a priority to pursue further reductions in unemployment and its persistence among specific groups, especially the lesser-skilled. The high level of joblessness is also closely related to the notable increase in inequality that came about during the crisis. Achieving this will require not only labour market measures but also, more broadly, actions targeting employee skills and training, to encourage their greater adaptability to a new environment marked by technological progress, the automation of productive processes and the knowledge economy. In parallel, despite the significant progress in recent years, the financial sector continues to face deep-seated challenges. These include the need to tackle the effects of the farreaching changes in regulation, technology and competition, to improve low profitability levels and to complete the ongoing reduction of problem assets. Looking ahead to the medium and long term, population ageing is probably the main challenge the developed societies face.