samchain/econo-pairs-v1 huggingface dataset:
Conclusion  The Bank of Zambia and the Government will continue with efforts to deal with challenges from the global economic and financial crisis, which still remain significant and continue to threaten macroeconomic stability and the long term growth path of the economy. In this regard, focus will be on attainment of the following objectives: •  Maintaining macroeconomic stability;  •  Maintaining fiscal prudence to ensure that it does not become the source of instability;  •  Increasing or consolidating public and private sector investment in infrastructure that builds the long term productive capacity of the economy and helps to diversify the economic base;  •  Improving the business climate by lowering the cost of doing business; and  •  Harnessing regional markets as an alternative source of demand for exports as well as source of supply for goods and services, including energy. 6  BIS Review 161/2009

BIS central bankers’ speeches  7  In a speech last month, I set out the reasons why this might be the case.6 First, the relationship between spare capacity and inflationary pressures may be much more complex than the simple model suggests – particularly in the services sector which now dominates the UK economy. Second, the very accommodative policies we pursued in the depths of the recession allowed companies to pass through cost increases and may have encouraged companies to believe they have more pricing power than in the past. We have seen further evidence of this today in the very strong price expectations which are continuing to be registered by manufacturers in the CBI survey. And, third, the UK is a very open international economy. Global price pressures and the value of the pound appear to be having a greater impact on our inflation rate than the domestic margin of spare capacity. There are other criticisms which can be made of the “output gap” view of the world. Measures of the “output gap” are frequently revised, partly because of GDP data revisions and partly because of changes in our view of where the trend or capacity level of output truly lies. For both these reasons, the “output gap” is notoriously difficult to measure in real time.7 Indeed, there have been quite significant revisions to the GDP profile of the early 1990s recession from the initial estimates.
This is very low compared with other countries. 12  BIS Review 139/2009  The decline in employment has been less marked than the fall in activity would imply. Unemployment may be low partly because it may have taken time for enterprises to adapt their workforces to the sharp fall in production, and partly because some enterprises have decided to maintain their workforces in anticipation of a pickup in demand. In many sectors, the level of employment is nevertheless high in relation to output, and productivity in the past year has been at its lowest level since 1988. The projections are based on the assumption that productivity will gradually improve, reducing the pressure on firms’ costs somewhat. The projections are also based on improved profitability through an increase in prices. If firms instead reduce employment more rapidly and markedly in order to improve productivity, that will lead to higher unemployment and lower wage and price inflation than projected. The interest rate may then be kept lower for a longer period than currently envisaged in order to ensure that inflation returns to target. Wage growth is projected to decrease to around 4 per cent in 2009. Weak manufacturing profitability as a result of both a fall in product prices and a low productivity level suggest moderate wage growth ahead. At the same time, wage growth among trading partners is low. As a result, the competitiveness of internationally exposed industries may weaken further in the period ahead. In isolation, this may contribute to curbing wage growth.

Imported inflationary pressures remain subdued; inflation in Albania’s trading partners and the rise in commodity prices are at low levels, while the exchange rate is stable. Inflation expectations and the liquidity situation in the economy are in line with the low inflation rates for the period ahead. Indirect available data on economic activity signal for positive growth rates in the first months of the year. Aggregate demand improved, driven by both private domestic and foreign demand, while the consolidating fiscal policy pursued during this period did not contribute to an increase in demand. Incoming data for June have not changed our assessment on the performance of private consumption and investments. While these important components of aggregate demand were upward during the period, their performance remains weak. Their steady recovery continues to be impeded by uncertainties faced by households and businesses and reflected in the greater risk aversion of the real and financial sectors of the economy. The Bank of Albania expects further improvement in private consumption and investments for the rest of the year, reflecting, among others, its easing monetary policy. The pace of recovery of these two indicators will determine the short and medium-term dynamics of the country’s development. Data on public sector performance show a consolidating fiscal policy over the first five months of the year. This policy materialised in a budget deficit of about 68% lower than the previous year. The tightening fiscal policy is evident both on the revenue and expenditure side.
The UK economy exhibits none of these traits – annual broad money growth is around 1%, growth in regular pay is close to 2% and money spending growth is around 3%; all of which are significantly lower than the average growth rates recorded before the crisis. And a range of indicators point to spare capacity in the economy rather than excess demand. Perhaps most obviously, unemployment is around 8%, three percentage points above the average levels before the crisis – a million fewer people in work. The Monetary Policy Committee judges that it is likely, though not certain, that this spare capacity will press down on inflation. That seems to be happening in both the United States and the euro area where underlying inflation is falling. No one should take this as a sign of complacency. The MPC is conscious that there are always risks to the upside, and the apparent rise in inflation expectations is one that concerns us. We have always explicitly recognised that there is a significant chance that inflation may turn out to be above target. A forecast is not a single number; it is an assessment of risks. In our May forecast, the MPC judged that, under prevailing market interest rates, the odds were in favour of inflation remaining above target over the next year,  BIS Review 84/2010  1  whereas, looking two to three years ahead, the odds were on inflation being below the target.

The Bank of England cannot effectively perform its role as lender of last resort without first-hand knowledge of the health of the banks to which it might provide support. In peacetime, regulation can be conducted outside the central bank. But in a crisis, decisions must be made quickly and decisively and the central bank, working with government which is always responsible for any use of public money, needs to be in charge. That was one of our painful lessons. In approaching our new responsibilities we shall build on the real improvements to its regime of prudential regulation made over the past three years by FSA. But the Bank will bring its own central banking culture. The focus of regulation needs to be on maintaining stability of the banking system as a whole. We shall be looking not just at those aspects of a bank that make it look unsafe in comparison with other institutions, but even more so at whether there are common features that threaten the stability of the system, such as the dangerously high leverage prior to 2007. We shall aim to avoid an overly legalistic culture with its associated compliance-driven style of regulation. That is an important reason for the separation of consumer protection and market conduct from prudential regulation. We will need to exercise discretion when setting capital and liquidity ratios for individual banks. And to do that properly will require changes to the current legislation and rule book. We must reverse the seemingly inexorable trend towards more regulation and more regulators.
He made a substantial contribution to the development of accounts for the nation as a whole – national accounts. When economists worldwide discuss concepts such as gross domestic product, private consumption and investment, this can to a large extent be attributed to Frisch. Together with Trygve Haavelmo, also a Nobel laureate in economics, Frisch contributed to giving the Department of Economics at the University of Oslo a proud past. Frisch was sceptical as to whether market forces alone would ensure an efficient distribution of resources. Equipped with new tools, he saw the economist as a sort of social engineer who, with the help of mathematical models, detailed accounts and proposals for regulation, management and control, could assist government and parliament in improving living standards and welfare. Confidence in government planning and management marked Norwegian economic policy in the 1950s, 60s and 70s. Self-confidence among economists was considerable, as was their influence on economic policy. The work was led by former students of Frisch, such as Erik Brofoss who became finance minister and later also central bank governor. The following quote from his presentation of the central government budget in 1946 reflects his ambitions: “People have gradually managed to free themselves from the oppression of the forces of nature through scientific and technical progress. They have succeeded in breaking the chains of nature that have restrained humanity.

That would be a positive effect of the crisis. Why study economics? The British economist Arthur Cecil Pigou once noted what he considered to be the true purpose of economics in society: “The complicated analyses which economists endeavour to carry through are not mere gymnastics. They are instruments for the bettering of human life. The misery and squalor that surround us, the injurious luxury of some wealthy families, the terrible uncertainty overshadowing many families of the poor – these are evils too plain to be ignored. By the knowledge that our science seeks it is possible that they may be restrained. Out of the darkness light! To search for it is the task, to find it perhaps the prize, which the “dismal science of Political Economy” offers to those who face its discipline”. 1 Most of us may find these words rather grandiloquent. Economics is a subject that makes positivistic attempts to explain the interaction between firms, households and government. But the subject can also in more normative terms be used to indicate how society and markets should be organised. It took many years for economics to gain its own department at the University of Oslo. In the 1800s, political economy, as it was called at that time, was initially placed under the faculty of law. It was not until 1932 that the University Institute of Economics was established as a department in its own right. Many attempts have been made to define economics.
As central bankers, we might enjoy this visibility, but we must be cautious on not getting carried away. We must always remind ourselves of what monetary policy can and cannot achieve: we can ultimately affect nominal variables in the economy, i.e. the price level, but we can affect neither long-term growth nor general prosperity in the economy. To that extent, I think we must always remind politicians on carrying out their duties on structural reforms and make best use of the breathing space provided by monetary policy. Thank you for your attention! BIS central bankers’ speeches  3

The folklore sometimes exaggerated this, so much that some observers attributed every decision of the SES to the mysterious ways of the MAS. But the hidden hand of the regulator was not ideal for developing a mature and dynamic capital market. Now that the SGX has been demutualised and listed, a new set of potential conflicts arises. While profits were never irrelevant to the SES, they are the primary motive for shareholders of the listed SGX. Share values and dividends also give greater transparency to the business performance and prospects of the SGX, providing the management with greater incentive to raise operational efficiency, and seek competitive advantage. This is as it should be, and is indeed a principle benefit of demutualising and listing the SGX. There will however be concern from time to time as to whether the greater drive for commercial success will reduce the commitment and resources deployed by the exchange to fulfill its responsibility to regulate in the public interest. The MAS believes that the interests of the SGX are more aligned than divergent with public interest as represented by users of the exchange. A fair, transparent and efficiently-regulated market is indispensable to the vibrancy and sustained business success of the SGX. Serious investors will not trade on an exchange that does not have internationally acceptable rules of listing, trading and settlement, or does not enforce the rules fairly and effectively. The examples of exchanges that have failed to meet such standards and suffered the consequences of investor shunning their markets are well-known.
We have given some thoughts to this issue, and to execute the idea, one solution would be for the Fund to set up a new department that will handle only crisis cases involving exceptional financings. This new department will take over the responsibilities of crisis management and resolution from the area departments and will have the responsibility for designing the rescue package and acting as coordinator between creditor Governments contributing to the rescue package, other creditors in the private sector, IMF management, and the country concerned, to push through the rescue program. In this model, a separate Resolution Board will also be set up to approve, monitor, and supervise the implementation of the rescue package, of which membership will come directly from representatives of Governments contributing to the rescue package, key IMF members, and IMF management. The IMF Executive Board will vote to provide IMF’s contributions to the package but would have no other involvement. This is to separate the decisions on surveillance and lending. BIS Review 24/2006  3  This simple model of separation illustrates three benefits that can add to the current process. First, there will be clearer accountability within the Fund in terms of duties, responsibilities, and decisionmaking for its works on surveillance and crisis resolution. Second, there are benefits of resource pooling which will allow the Fund to handle crisis cases with all available resources and with the program design structured under a common set of guiding principles.

During the previous year, this appreciation was 2.8 percent. The lek-foreign currency interest rate spread, though downward during three latest years, continued to be at positive levels. Economic developments during 2006 have sustained a stable domestic currency. The lek’s appreciating pressures have been concentrated mainly on July-August and December. Besides the seasonal entry of foreign currency, which is the main factor of the lek’s appreciation over this period, the key interest rate increase has also been reflected in the market. The high foreign currency supply over this period has been absorbed partly by the Bank of Albania’s interventions, in respect of the target on the rise of net international reserve and in compliance with the country’s overall macroeconomic program. 7. Monetary policy instruments  Fixed-price one-week repurchase agreement is the main instrument employed during 2006. According to the liquidity situation, the Bank of Albania has switched from repurchase agreements to reverse agreements, while the maturity term has changed from weekly to quarterly. This spectre of movements has been imposed by seasonal factors, by the budget behaviour and by the need to reveal certain monetary policy signals. To meet longer-term needs of the market for liquidity during the four last months of 2006, four Treasury bill outright purchase transactions were carried out, at a total nominal value of ALL 3.2 billion.
Many advanced economies continued to retain significant capital account restrictions until early 1980s, later than the internationalisation process of their currencies that began in earlier decades. Such evidence suggests that the transition of the renminbi as an international currency can commence with the gradual and sequential liberalisation of the capital account. China’s position on a ‘managed convertibility’ approach instead of the traditional ‘fully or freely convertible’ can therefore be appreciated given the lessons from the Global Financial Crisis and the risks associated with volatile capital flows even for such a large emerging economy like China. It is important to note that China has made significant progress in this area. This is even acknowledged by the IMF in its recent reports as they note that China has already achieved full or partial convertibility in 35 out of 40 items under the capital account. The rise of the renminbi and its implications While the path for the renminbi to be a fully international currency will remain gradual, the renminbi has already achieved significant milestones. It is now the second most used currency globally for trade finance and the fifth most used currency for global payments. One‐quarter of China’s total trade is now invoiced in renminbi, and this is expected to double within the next five years. By some accounts, more than sixty central banks around the world already hold renminbi in their official reserves.

With the various renminbi financial infrastructure that has been put in place to support trade, investment and  BIS central bankers’ speeches  3  financial flows between Malaysia and China, this trend is expected to increase. Malaysian entities with large regional network should consider using Malaysia as the centre for their regional renminbi transactions and thus contribute towards greater economies of scale over time. This would in turn enable the transactions to be conducted in the most efficient and cost effective way. Conclusion Let me conclude my remarks. In a short time span of six years since 2009, the renminbi has accomplished much of its goals but there is still a long journey ahead as most international currencies have evolved over several decades. The impact of the Chinese economy on Asia has been significant with many countries now counting China as their largest trading partner, and in some cases, among the largest foreign investors. Reflective of the underlying fundamental economic changes, the rise of the renminbi, although gradual, is inevitable with important implications not only to Asia but to the rest of the world. Undoubtedly, the renminbi is more important to Asia than anywhere else. Given this, Asia including Malaysia must be ready for this transition of the increased internationalisation of the renminbi and its potential role with Asia’s integration path and thus contributing towards further unlocking the potential of the region. 4  BIS central bankers’ speeches
In fact, capital markets and other non-bank sources of external finance have been growing relative to banks.5 This growth should improve firms’ access to funding, and ensure that any losses are dispersed more widely. Low bank profitability The overbanking in Europe, highlighted in the ASC’s report, is also a factor in the currently low 1/4  BIS Central Banker's Speeches  level of bank profitability. A number of reasons have been mooted as the causes of this low profitability, including low interest rates. Long-term real interest rates have been falling in the major advanced economies for two decades. Technological change, demographics, income inequality and safe asset scarcity are just a few of the factors exerting downward pressure on long-term real rates.6 Accommodative monetary policy by the European Central Bank and other major central banks, acting in accordance with their price stability mandates, has also contributed to low interest rates. Low interest rates tend to squeeze net interest margins owing to downward rigidity in banks’ deposit rates.7 But overbanking is also a factor in the current low level of bank profitability. Overcapacity in some national banking sectors, and the ensuing intensity of competition, exacerbates this squeeze on margins. Such over-capacity also means the sector does not operate at the efficient frontier, which is one reason why cost-to-income ratios remain high in some countries. At the same time, banks benefit from revaluations in their fixed income portfolios.

With reference to the question above, I can tell you that there have been several reasons to begin with these three countries, but the main reason for which we compare today the present situation in Sweden, Turkey and Romania is due to the diligent and assiduous activity of the Ambassadors of these two countries in Bucharest. Then, I would like to salute their presence here today: His Excellency Mr. Anders Bengtcén, Ambassador of the Kingdom of Sweden, and His Excellency Mr. Ömür Şölendil, Ambassador of the Republic of Turkey and to particularly extend my gratitude to them and to all the persons involved in the materialization of this conference. I also thank Mr. Klas Eklund, Senior Economist at the Swedish Bank SEB and Adjunct Professor of Economics at the Lund University and Mr. Çağri Memişoğlu, Deputy General Manager at Garanti Bank Romania. There are, of course, historical links between the three countries. I do take this opportunity to highlight a few of them. With the Republic of Turkey one could go back to the proclamation of the new state as a republic, last century, and even more, centuries of ties between the Romanian Principalities and the Ottoman Empire. I also like to notice the connection between our two central banks. In the National Bank of Romania’s archives there are letters, exchanged between Governor Mitiță Constantinescu and Governor Salâhattin Çam, regarding the organization of a conference for the governors of the central banks in the Balkanic Coalition, in November 1937, in Ankara.