samchain/econo-pairs-v1 huggingface dataset:
But for this to occur, it will be important for market participants to appropriately discriminate across countries, rather than treating EMEs as a single group. The good news is that many EMEs generally appear to be better equipped today to handle the Fed’s prospective exit from its exceptional policy accommodation than they were during past tightening cycles. This reflects the fundamental reforms that EMEs have put in place over the past 15 years, as well as the hard lessons learned from past periods of market stress. Among the positives are: •  The absence of pegged exchange rate regimes that often came undone violently during periods of acute stress;  •  Improved debt service ratios and generally moderate external debt levels;  •  Larger foreign exchange reserve cushions;  •  Clearer and more coherent monetary policy frameworks, supporting what are now generally low to moderate inflation rates;  •  Generally improved fiscal discipline; and  •  Better capitalized banking systems, supported by strengthened regulatory and supervisory frameworks. Of course, progress has not been uniform across EMEs, and more work remains to further strengthen institutional structures in some countries. In particular, vulnerabilities remain in several important EMEs, and some have been hit by the sharp adverse turn in their terms of trade due to the recent fall in global commodity prices. Still, the fundamental improvements I’ve cited leave many EMEs better positioned than in the past to weather those times in the cycle when the external environment becomes more difficult.

The Quarterly Journal of Economics 110-3, 663-691. Kiyotaki N. and J. Moore (1997), Credit Cycles, The Journal of Political Economy 105, 21148. Meltzer A. (2003), Rational and Non rational Bubbles, in Hunter, Kaufman, Pomerleano (eds), "Asset Price Bubbles". MIT Press. 6  BIS Review 37/2009
And the balance that assesses households’ views about “whether it is a good time to make a major purchase” has also fallen back substantially since the start of the year – although that is likely, to some extent, to reflect the impact of the rise in VAT. Chart 8 Measures of consumer confidence Optimism over the next year(a) Good time to make a major purchase? Balance 40 30 20 10 0 -10 -20 -30 -40 -50  1985  1990  1995  2000  2005  2010  Source: Research carried out by GfK NOP on behalf of the European Commission. (a) Average of the questions on households’ current financial situation, and the general economic situation, over the next 12 months. Other factors, such as the ongoing restrictions on the availability of credit and households’ concerns about their levels of debt, may also contribute to the likely weakness of household spending going forward, by encouraging households to save more and spend less, for a given level of income. Overall, given the continuing squeeze in household real incomes and the renewed fall in consumer confidence, I wouldn’t be surprised if there was only slow growth in consumer spending over the next year or so. The risks around that are probably skewed to the downside. Even if we do get the anticipated boost to net exports, overall growth in output is unlikely to be much above its historical average rate.

Turning to structural policies, measures that reduce adjustment costs and promote moderate unit labour cost growth are of the utmost importance in the current economic circumstances. While this is crucial in all euro area countries, it is particularly pressing in those that have experienced a significant loss of cost and price competitiveness over recent years and where unemployment has already started to rise. Moreover, fostering productivity  BIS Review 105/2008  3  through enhanced investment in innovation and education enlarges the scope for increases in real incomes in the longer run. We are now at your disposal for questions. 4  BIS Review 105/2008
The fact that so far, at least, the strong growth has not generated an acceleration of inflation that is comparable to what happened in earlier upward phases has started a discussion of whether the trade-off between growth and inflation has changed in the 1990s. Judging from historical patterns, inflation ought not to have remained as low as it has. The relationship between growth and inflation is,  BIS Review 108/1999  2  of course, crucial in the assessment of future price trends and thereby for the formulation of monetary policy. It is not possible to arrive at definite assessments in this field. The analysis is complicated by, for example, the combination of decreased inflation expectations, uncertainty about the rate of potential growth and the size of the output gap, and how the labour market is functioning. The Riksbank has to be alert to every sign that may support or contradict the hypothesis of a lower trade-off between growth and inflation. We have revised our opinion about this on several occasions in recent years and have done so again in the present Report. In this we are not alone. Various international observers have changed their appraisal of the corresponding trade-off in the OECD area as a whole. In Sweden’s case it is judged that the low and stable inflation expectations, increased competition and EU membership are among the factors behind a better trade-off. In the Inflation Report, the Riksbank’s main scenario is accompanied by an analysis of likely risks.

that a significant proportion of these payments should be deferred over time, allowing for possible reductions in case losses materialize. This is an area, more than in any other where “business as usual” cannot apply anymore. Considering, especially, recent profits, it is clear that they would not have been possible without the wide array of public support and guarantees which have benefited the financial industry. It is only legitimate to ask that those profits should primarily be used to bolster capital and allow banks to focus on their core task of financing the economy. Tomorrow’s meeting will be an opportunity to ascertain that we have made a lot of progress but that much work remains to be done. It is an ongoing process, best described as “rebuilding the plane as we fly it", clearly a very challenging and perilous task. 2  BIS Review 104/2009
This is positive, not only because it facilitates access to international capital, but also because the requirements make it more difficult for the governing elite and pressure groups to line their pockets at the expense of the majority of the population, if they want to take part in international society. The crises during the 1990s have also demonstrated that problems in one country can spread to other countries at a much greater speed than before. For this reason, some people would like to see an inbuilt time lag in the markets, for instance by introducing a tax on financial transactions, to reduce the damage to individual countries when capital moves rapidly across borders. This idea is based on most of the transactions on the international financial markets being pure speculation. Naturally, there is some harmful speculation that needs to be counteracted, but a transaction tax would probably do more harm than good. It would have a very negative effect on risk management in the global economy. Financial transactions are increasingly taking place between financial institutes with the aim of spreading different risks, that they are paid to take over from their clients. This processing is important to enable international trading to flow smoothly. We therefore need to look for solutions that minimise the risks of financial crises and do not destroy the institutes' opportunities for risk management. In addition, and it is important to remember this, we do not want to remove all forms of speculation. Healthy risk taking is an important factor behind economic growth.

We will do whatever is necessary to ensure that this pandemic, which is having a massive economic impact, does not turn into a debt crisis or a crisis of the financial system. We will not allow this to happen. We are dealing with a situation which requires us to act with extreme intensity. You have said that the measures taken by the Spanish government and other European governments are appropriate. But you have also hinted recently that the European Union has perhaps not responded quite as effectively. Are you afraid that a crisis of this kind could take its toll on the European project? Let’s hope not. The ECB has already acted. Basically what remains is for Member States also to act and continue to act through their fiscal policies. And we need a pan-European response. We need a coordinated EU fiscal policy response. I am sure that this is what will happen in the end. The ECB cannot be the only policy tool used from an economic standpoint. Monetary policy cannot be the only instrument employed. I am certain that Member States will do something about this and they will adopt a coordinated position in terms of the fiscal policy instruments employed by the EU in response to this huge crisis. The economic impact will be enormous. We just hope that it will be temporary.
But at yearend 2011 and last June we brought our Monetary Policy Report to you in the midst of heavy external turbulence, with market expectations that did not rule out the occurrence of worst-case scenarios in the near future. Today, as in last March, we are presenting our Report in a calmer environment, but where the risks are still there. Our baseline scenario assumes that stress episodes will be repeated in the world markets. Why is that? Simply because the situation in developed economies with their complex macroeconomic, financial and fiscal problems is far from being resolved. There is a long road ahead. The classical economic policy conundrum is time consistency, as the costs are paid upfront for promised benefits for the future. Plus, in the case of the Eurozone, a difficult collective action problem, due to difficulties in spreading the cost among those involved. Thus, policy decisions are pushed back while the problems needing resolution only aggravate over time. We may add that the bigger emerging economies, including China, Brazil and India, are showing signs of a sharper than expected deceleration. Their weight in world trade, and particularly with Chile, makes us worry about their evolution. Although the copper price has been fairly stable, a further deceleration of the Chinese economy could have significant effects on the rest of the world and drive us to a complex situation, especially if it triggers a reduction in our terms of trade. Let us stop for a moment to examine the current account of the balance of payments.

It will then return gradually to 3% by the second half of 2013, to stay in the neighborhood until the end of the projection horizon, this time the third quarter of 2014. The CPIEFE will converge to 3% later than foreseen in June (figure vi). This trajectory assumes that wages will be adjusted according to productivity and the inflation target. A methodological assumption is that the RER will remain around its recent figures during the forecast horizon. Finally, the baseline scenario uses as a working assumption that the MPR will remain stable over the short term. The baseline scenario reflects the developments that the Board believes to be the most likely to occur with the information at hand at the statistical closing of the Report. However, there are risk scenarios that, if materialized, might change – significantly, in some cases – the macroeconomic outlook and, therefore, the course of monetary policy. On this occasion, after evaluating the alternative scenarios, the Board estimates that the risk balance for output and inflation is unbiased. Abroad, the risks described during the past several quarters have not changed significantly. The situation of the Eurozone is complex. The materialization of the announcements will not be easy and the passing of time will bring more problems to the economies of peripheral Europe, so a severe aggravation of the financial crisis in the Eurozone or even more extreme scenarios with systemic implications cannot be ruled out.
In this spirit, once we have finished our presentation, we will be hearing the views of a panel of experts representing fintech, banking, infrastructure provision and the SNB. To run efficiently, an economy needs functioning payment systems Payment systems play an important part in enabling economies to function smoothly. Allow me to illustrate this point with a brief anecdote taken from a book entitled ‘Across Africa’ by British explorer Verney Lovett Cameron. Cameron crossed equatorial Africa in 1875, and was the first European to do so. At one stage on his travels, he needed some boats. He managed to  Page 2/9  find a boat owner, but the owner demanded to be paid in ivory, which Cameron did not have. However, word reached him that there was a person in the vicinity who sold ivory. There was just one hitch: this person would only accept cotton cloth as payment, which Cameron did not have either. Eventually, Cameron came across somebody who owned cotton cloth that he was happy to part with in exchange for wire. Mercifully, Cameron had brought some wire with him. So he gave this man the required quantity of wire, took the cotton cloth, used this to pay for the ivory, and – finally – bought the boats in exchange for said ivory. 1 This story brings home just how high the transaction costs of an exchange can be. If Cameron had not needed the boats so urgently, the transaction would presumably never have come to pass.

All households who have previously paid more than SEK 4,500 a year in property tax will have lower monthly costs, according to this proposal. If households choose to use the sum they save on the abolished tax to take out larger loans, it is possible that this will lead to a slightly faster increase in prices than would otherwise have been the case. If the increased opportunities to borrow were to have a full impact on house prices, the reform could push up prices by around five per cent. The price increases would probably be highest in the parts of Sweden with the higher taxation values, where they have previously paid a relatively higher tax rate. However, there are a number of factors that imply that this calculation probably overestimates the effect on prices. Firstly, the Government has been indicating for some time that it intended to lower property tax. It is therefore possible that house prices have already been affected to some extent by the decision. Secondly, the price increases could be counteracted by the higher capital gains tax. Thirdly, if households believe that the property tax will in some way be increased in the future, it is not certain that they will be prepared to increase their borrowing. As I said, it is not easy to measure the overall effects of the changed taxes. This is a subject which I believe we will have reason to discuss further in the future.
When achieved, it can transform the global financial system more than anything else. It’s not for me to set out the ideas today (Svein will do so later), but there are ideas developing that I believe will, in at least some key centres, become concrete policies for putting losses in the largest firms in the world not just onto shareholders but onto their unsecured, uninsured creditors rather than onto taxpayers. I would expect that over time to lead to adjustments in the business models and organization of the most significant firms in the world. What’s more, on the whole, I think they will welcome that. 5. Capital markets  The next element of the reform programme is capital markets. Too much of the reform debate has probably revolved around banks, both in response to this crisis and in response to earlier crises. We live in a world where financial intermediation does not just go via banks and insurance companies, but it goes via capital markets and the vast array of institutions, investors and issuers that the capital markets encourage into existence. I will highlight just two key changes on this front. One, there is a determination that a lot more OTC (over-the-counter) derivative activity will go through central counterparties, rather than being settled bilaterally. This can have enormous benefits in terms of laying down standards for collateralisation, valuations, and ensuring transparency of what is going on in those markets.

It will lay down minimum standards for banks to hold some resiliently liquid assets and about the funding of illiquid assets. To date, much more prominent has been the work on capital. Although there has been some dilution of the proposals from a few months ago, real substantive progress is being made in reforming the minimum standards and in introducing various buffers, taking into account credit cycle conditions and the circumstances of SIFIs. The key element of the overall package is that “capital” will mean capital. The world of hybrid instruments – pretending to be so-called capital instruments but which in fact cannot truly absorb losses in a going concern – should become more or less a thing of the past. The Bank of England would like it to be completely consigned to the past. Only equity can absorb losses. For that reason, in calculating regulatory capital, deductions from capital should really be from equity. As part of the emerging compromise, there will be some derogations from that, but the derogations should be transparent. Markets should learn to evaluate bank’s capital adequacy on the basis of what is made transparent about the makeup of that capital. The other really key change will come in stages – partly in the package this autumn and partly during next year and beyond – which is reducing the pernicious regulatory arbitrage that has existed between “banking book” capital requirements and “trading book” capital requirements.
And were we to further integrate the consideration of the international financial cycle into the setting of domestic macroprudential policies, it would likely improve the available set of outcomes further still. However, the body of evidence required to justify including the interests of other nations in the setting of domestic policy is understandably large, even when the long run benefits would be to all. This is more true now than ever, as the unequal distribution of benefits from globalisation has increased scepticism about international co-operation. The analysis I have outlined today shows that even without consensus around a fully articulated global framework for macroprudential policy, we can make quite a bit of progress by countries pursuing their local national interests. 8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  TECHNICAL APPENDICES  1. Foreign credit growth and domestic financial stability Cesa-Bianchi, Eguren Martin and Thwaites (forthcoming) explore the effect of ‘foreign’ credit growth (that is, domestic credit growth in the rest of world) on domestic financial stability. In particular, they look at the effect of foreign credit growth on the probability of experiencing a banking crisis at home. In order to do so, they extend the baseline regression in Schularick and Taylor (2012), which only looks at the effect of domestic credit growth, by also considering its foreign counterpart.

A crisis of the depth we have now passed through leaves behind feelings of uncertainty regarding the future. Previously-observed relationships have not been able to provide us with the same guidance as before, and moreover it is difficult to know what these deviations from historical patterns will lead to further ahead. The way this situation develops in the future will depend on many different things. If the world economy returns after the recovery to a situation similar to that before the crisis, then countries which have conducted a policy that has helped companies to retain their labour force through the recession will be in a very good position. Companies in these countries will then easily be able to increase production. However, if it turns out that the world demand is for other goods and services than those prior to the crisis, these countries may instead find themselves in a situation where they need to undergo a necessary structural transformation. This could lead to a more protracted period of high unemployment and lower production. In the future, countries like China may account for an increasingly large share of world consumption. If consumption patterns differ in different countries, this could mean that different types of product will be in demand in the future. A deep recession may also affect the internal demand picture within a country permanently, for instance, by individuals changing to more energy-saving and cheaper alternatives.
However, in parallel with them, it also reflects the appropriate reaction of monetary, financial and fiscal policies, as well as the fruits of the continuous structural reforms that we have undertaken in the real and financial sector of the economy. 2/5  BIS - Central bankers' speeches  In this context, allow me to elaborate on the main directions and results of the work of the Bank of Albania throughout 2022. The augmented intensity and the expanded base of inflationary pressures during the past year dictated a change in the monetary policy stance. In fulfilment of our legal mandate of price stability, the Bank of Albania undertook a normalization of the monetary policy stance. The rise in the interest rate to 2.75% as at end of 2022 from 0.5% at the beginning of 2022, led to the realisation of this normalisation. In parallel, we have intensified communication with markets and public, re-affirming our will to take all the necessary measures for inflation return to the target and to clarify our monetary policy strategy. This strategy is based on three important principles: First, the normalisation of monetary policy stance was and remains necessary for inflation to return to the target in a steady manner. The purpose of this normalisation was to curb the pass-through of rising international prices to the overall and steady surge in prices in the Albanian economy. In this context, it remains in line with the reaction of the other central banks.

The industry has also come together in demonstrating their commitment to businesses, in particular halal businesses and enhancing protection for halal businesses to venture into emerging markets. A dedicated RM20.0 billion yearly fund has been allocated by Islamic banks under AIBIM for SMEs including halal businesses. I urge eligible entrepreneurs to take this opportunity to empower their businesses and leverage on this platform in maximising business’ potentials. There is now growing awareness of the concept of halalan-toyyiban – which calls for Shariah compliance to be assessed throughout the entire supply chain of the products including distribution, marketing, and financing. Currently, only 54.1 percent of halal businesses are bankfinanced, and less than a quarter of the financing (21.9 percent) is in the form of Islamic solutions3. Islamic finance offers a variety of solutions through use of wide-range Islamic finance concepts such as sales based, leasing, profit sharing or partnership and many more that enables better fit for businesses’ need. For example, businesses who wish to acquire equipment or commercial vehicles can explore Ijarah contract, which allows businesses to lease equipment or commercial vehicles from an Islamic bank on rental for the usage of equipment during the lease period. The total leased rental, which is fixed throughout the tenure provides businesses with a hedge against future rates movement and provides businesses with an avenue to improve and better manage cash flow. Currently, Islamic finance institutions are rigorously exploring more customised solutions and improving customer experience and journey.