samchain/econo-pairs-v1 huggingface dataset:
After the global recession of 2009, the recovery has been imbalanced between developed and emerging economies. Among developed ones, especially those that encountered problems in their financial systems during the crisis, are growing below trend. BIS central bankers’ speeches  1  Thus, the main developed economies are still enduring high unemployment rates. Stimulus measures adopted during the recession helped the world economy to begin recovering. But private demand remains weak in the advanced world and inflation, both headline and core, is still contained. Households, banks and governments in the main developed economies are facing a fragile financial situation. Within this context, the process of de-leveraging and restoring the damaged balance sheets will take some time. Such a scenario has called for additional monetary expansion measures and postponing interest rate normalization in those economies. The dollar has depreciated in global markets (figure 2) while in the U.S., additional fiscal stimulus packages have been adopted and in Europe fiscal adjustment plans are being applied. In emerging markets, especially in Asia and Latin America, economic activity has been growing strongly, although it is expected to converge to trend levels during 2011. As a response to this and to signs of increased inflation, emerging economies are gradually withdrawing their fiscal and monetary stimulus packages. Differences in the growth outlook, risk perceptions and interest rates have created conditions that favor capital flows towards these economies (figure 3).

Thus, GDP will grow in the 5.5%–6.5% range in 2011, with a smaller contribution of supplyside sectors – i.e., fishing, mining and hydroelectric generation – than foreseen in the latest IPoM, while the other sectors will converge to trend growth as the monetary and external impulses are normalized (table 2). Prospects for trend growth are similar to September’s, that is, around 5%. In this scenario, which also features improved terms of trade, the current account of the balance of payments will post a surplus of 0.3% of GDP in 2010, contrasting with the deficit forecast in September, owing mainly to better export prices. However, estimations yield that in 2011 the current account will reach a deficit of 1.4% of GDP. Y-o-y headline inflation has remained in the lower zone of the tolerance range, while the core measure CPIX1 is still in negative territory. This low core inflation has been partly offset by increases in the prices of foodstuffs, both perishable and non-perishable and, most recently, by increased fuel prices (figure 8). Since last July, there has been a renewed, markedly ascending trend in food prices in the global market. Given the experience of 2008, it has become again cause for concern for policy-makers in some countries. As shown in a box in our IPoM, in Chile a little more than one percentage point of inflation is due to food prices. Until now, the recovery of margins in the aftermath of the crisis has allowed cushioning the local inflationary effects of world price increases.
The Federal Reserve is exploring how to develop analytically sophisticated measures of leverage and better measures of maturity transformation from information that we can collect from the supervised firms in the supervisory process and from other available data and analysis. We envision developing a robust set of key indicators of emerging risk concentrations and market stresses that would both supplement existing supervisory techniques and assist in the early identification of early trends that may have systemic significance and bear further inquiry. This kind of approach will require data that are produced more frequently than the often quarterly data gathered in regulatory reports, although not necessarily real-time or intraday, and reported soon after the fact, without the current, often long, reporting lags. These efforts will need to actively seek international cooperation as financial firms increasingly operate globally. The potential benefits of additional data Improved data are essential for monitoring systemic risk and for implementing a macroprudential approach to supervision. The financial crisis highlighted the existence of interlinkages across financial institutions and between financial institutions and markets. Credit risks were amplified by leverage and the high degree of maturity transformation, especially outside of traditional commercial banking institutions. Moreover, supervision traditionally has tended to focus on the validity of regulated firms’ private risk-management systems, which did not easily allow comparisons and aggregation across firms.

I wish to acknowledge the valuable information and lessons that these different forums have provided to us in developing the regulatory and supervisory framework for microfinance in Zambia. 2  BIS Review 22/2003  I therefore wish to urge all of you participants to take this workshop seriously and participate fully in the various activities that have been lined up. Ladies and Gentlemen, I now wish to conclude by informing you that we now have Draft Microfinance Regulations in place, which are being circulated to all stakeholders and interested parties for comments before they are finalized. These regulations can also be downloaded from the Bank of Zambia website: www.boz.zm. Finally, Chairperson, allow me to pay tribute to AFRACA and our co-host, Micro Bankers Trust, for bringing this workshop to our country. I therefore wish all the participants a very good stay in our country and I hope that you will all have a chance to visit our City of Lusaka. Thank you. BIS Review 22/2003  3
Last year, Singapore’s GDP growth was driven by two engines – the trade-related cluster and modern services cluster – with domestic industries flat. The trade-related cluster – manufacturing, wholesale trade, transport and storage – grew 4.3% and contributed 55% to overall GDP growth. The modern services cluster – financial, information and communications, and professional services – also grew 4.3% and contributed 40% to overall GDP growth. Growth in the domestic industries cluster – construction, retail and F&B, health and education services – was negligible, mostly weighed down by the slump in construction. This year, the trade-related cluster is decelerating, modern services is holding up, and the domestic industries cluster is gradually recovering. 4 / 11  BIS central bankers' speeches  The trade-related cluster will continue to face the full brunt of the maturing of the global tech cycle and growing trade tensions. The modern services cluster will be the main driver of growth this year, supported by healthy regional demand and increased investments in digitalisation as the domestic economy undergoes transformation. Domestic industries will make a modest, positive contribution to overall growth, as the construction sector turns around, and retail and F&B benefits from firm labour demand conditions and efforts to lift productivity. INFLATION AND MONETARY POLICY Inflation in Singapore remains subdued and within expectations. MAS Core Inflation this year is expected to come in near the mid-point of the forecast range of 1–2%. While there will be some domestic cost pressures from firm labour market conditions, underlying inflationary pressures should remain contained.

There was a net increase of about 6,900 jobs in financial services and FinTech in 2018, driven mainly by the banking and insurance industries.2 Over the last three years (2016–18), we saw an average of 4,900 financial services and FinTech jobs created on a net basis per year. This is above our ITM target of 4,000 net jobs growth in financial services and FinTech. 9 / 11  BIS central bankers' speeches  Hiring in the financial sector remains healthy so far this year and job growth is on track to meet the ITM target of 4,000. Sustaining this rate of job growth will not be easy in the face of technological change unless efforts are continually stepped up to upskill the workforce. As digitalisation and automation become more pervasive in the financial industry, jobs will be transformed. Some will inevitably be displaced. MAS, the financial industry, and our tripartite partners are taking this very seriously and undertaking a variety of measures to help prepare the financial sector workforce for a digital future. Last year, more than 20,000 individuals – or about one out of eight workers in the industry – went through MAS/IBF-supported upskilling programmes. Nineteen financial institutions have stepped forward and committed to re-skill close to 4,000 finance professionals and redeploy them in new or expanded roles over the next two years. Some 1,700 of them have already started this journey, and 800 have successfully transited into new roles. CONCLUSION Let me wrap up.
In this way the central bank will gradually bring inflation back to the target. In practice, inflation is allowed to vary in the short term in order to prevent unnecessary variations in the real economy. One final possibility would be to put sole weight on minimising output variability. One variant of this would be to minimise unemployment variability. Note that this policy does not improve the growth potential of the economy, only the fluctuations. Moreover, this would result in substantial inflation variability since the economy does not have a nominal anchor. This policy would not be sustainable in practice because it does not provide an answer as to how monetary policy should respond to unemployment that is driven by wages and costs. We would then be forgetting the experience of the 1970s and 1980s. Monetary policy credibility will also influence output and inflation variability. Current inflation pressures depend on expected future price changes. If economic agents feel confident that the central bank will stabilise inflation around the target, and their behaviour reflects this, inflation will move back to the target more quickly. Hence, the central bank must react less each time it wants to bring inflation back to the target. This also implies that output and employment must be reduced less in order to achieve a  2  See, for example, Svensson, Lars E. O. (2000): “Open-Economy Inflation Targeting”, Journal of International Economics, vol. 50, no. 1, pp. BIS Review 49/2002  5  3  given decline in inflation.

The Norwegian economy had to go through an extensive turnaround operation in the late 1980s. Confidence in monetary policy and the Norwegian krone had to be restored in order to avoid persistently high inflation. It took a long time, and very high interest rates were required, before confidence in the nominal anchor was restored. 5. Conclusion  Through a sound, credible orientation of monetary policy, it is possible to attain an inflation rate that on average is equal to the targeted figure. By practising flexible inflation targeting, i.e. having a mediumterm horizon for the inflation target, we can also achieve a reasonable trade-off between inflation variability and output variability in the short term. But monetary policy has no lasting effect on output and employment. These are determined by the supply of economic resources - capital and labour. Technological developments, and our ability to use that technology, also play a decisive part. In the long run, monetary policy cannot influence output, employment or competitiveness beyond the benefits that follow from low and stable inflation. The economy requires a nominal anchor. The Government has laid out a guideline for monetary policy which implies flexible inflation targeting. This is a regime that has also won broad international support. This BIS Review is available on the BIS website at www.bis.org. 12  BIS Review 49/2002
There remain significant challenges in tracing how nature loss transmits to the economy and financial sector. Knowledge, data, methods, and models in this area are still largely evolving, even compared to that of climate risks. This report is therefore exploratory, and is meant to contribute towards building a deeper understanding of risks and opportunities in this complex and intricate area. We remain some way from being in a position to develop more explicit supervisory and regulatory expectations – but we believe this work makes an important contribution to our thinking and approach to managing climate and nature-related risks in a coherent manner. Importantly, the financial sector needs to come to grips with the reality that like climate, nature-related risks are already presenting a significant threat to our economies and society that can no longer be ignored. The findings of this report lend impetus to the need to strengthen capacity in this area. The scientific community continues to issue the ‘code red for humanity,’ and with recent events, including the pandemic, floods and bushfires, the message could not be clearer. Ecosystem and planetary health matters to economic and financial stability. While the primary responsibility for addressing these priorities rests with governments, the financial industry and authorities have a critical interest in deepening our understanding and appreciation of the interactions between climate and nature-related risks – because how these risks evolve both affect and are affected by the actions of financial institutions.

1  BIS Review 82/2000  During this period, the Fed has looked at a large number of economic and financial indicators in an attempt to control inflation and smooth the business cycle. And, as I said, the Fed responded reasonably well to these events with fairly modest changes in its interest rate settings. Many among you are in a much better position than I am to know how much the US experience applies to Europe. I do want to mention, however, that an economist at our Bank, Glenn Rudebusch, recently did some research with Lars Svensson that questions the usefulness of monetary targeting.1 Now let me turn to the challenges for US monetary policy over the past five years or so. As I mentioned, these have been primarily on the real side of the economy. And while the developments in the US economy have been quite favorable, they’ve also been unanticipated, which has added substantially to the uncertainty we face as policymakers. The current economic expansion is now in its tenth year. It has lasted longer than any other in US history, and it has been remarkably strong. Real GDP growth averaged 4½% over the past four years and 6% over the past four quarters! The unemployment rate continues to hover around 4%, near its lowest level in thirty years. And core consumer inflation has averaged between 1¾ and 2½% over the past four quarters, depending on the measure used. Finally, US productivity has been truly remarkable.
This latter solution could be implemented in part by restricting distributions such as dividend payments or staff bonuses, but it is also where the concept arises of having eligible debt that can be “bailed in”, whereby some debt instruments can become loss-absorbing capital under stress, to recapitalise the firm. For banks, building societies and investment firms the main capital reforms come under the umbrella of CRDIV which is the EU implementation of the internationally agreed capital requirements, as determined by the Basel Committee for Banking Supervision (BCBS). The Basel agreements are ultimately agreed and signed off by a meeting of central bank governors and heads of supervisory authorities. CRDIV is made up of the fourth Capital Requirements Directive (2013) which must be implemented through national law; and the Capital Requirements Regulation (2013), which is directly applicable to firms across the EU. Amongst other things, CRDIV enshrines enhanced requirements for the quality and quantity of capital and gives the basis for new liquidity and leverage requirements; new rules for counterparty risk; and new macroprudential standards including a countercyclical capital buffer and capital buffers for systemically important institutions. In general, it is fair to say that the implication of CRDIV is that banks will substantially strengthen capital standards relative to pre-crisis. That will mean that the cost of required capital to support banking activity could be higher than it was previously. However, this is not certain.

The most uncertain risks for general insurers tend to be in the policies they have written and therefore on the liability side of the balance sheet, not the asset side. On the other hand, life insurers tend to be more exposed to market (including credit spread) risk on their assets. And although they are less likely than a bank to have a liquidity mismatch, the risk management challenge for an insurer is to try to match the maturity between assets and liabilities (and hence manage their rate of return). That is particularly necessary for life insurers whose liabilities tend to extend well into the future i.e. tens of years for many products. From 1 January 2016 a new European-wide capital standard will come into force under the Solvency II directive. Solvency II is largely maximum harmonising and should establish a more level playing field between European insurers. In part it embodies some of the basic principles of the UK’s ICAS regime, being based on holding sufficient capital to meet an event of such severity that might happen only once in every 200 years. In other aspects it is different, most noticeably in that the UK has a “gone concern” regime – i.e. under ICAS firms hold sufficient capital to run off their liabilities. Solvency II is to be a “going concern” regime – firms have to hold an additional risk margin to allow their business to be transferred to a surviving entity.
For many years, the Bank operated several times a day in  BIS Review 61/2006  1  the money markets, but that hyperactive approach did not succeed in stabilising the overnight interest rate which remained more volatile than in most other advanced countries. It was important to move to a simpler system in order to reduce that volatility, and the new system of money market operations, which was introduced last month, has done precisely that. The Bank now deals in the markets only once a week. Almost all banks and building societies now have access to the Bank. And they no longer have to balance their books with us at the close of business every day, but instead must achieve a target balance with us on average over the month running between MPC meetings. For the first time in its history, the Bank pays interest on reserve balances held by the commercial banks with us. The rate paid by the Bank on those reserve balances is the rate set by the MPC - Bank Rate is back. Great credit is due to the teams led by Andrew Bailey and Paul Tucker who together managed the introduction of the new system, proving that, as Cameron Cobbold remarked in 1958, “the Bank is a bank, not a study group”. The 1997 reforms also changed the rules of the game for communication between the Bank and financial markets, and I would like to say a word about what they are.

It is our sincere hope that this global forum will be rewarding and may the collective wisdom derived from the deliberations lead to more collective actions that will be to our increased mutual benefits. Let me once again express our appreciation to Yang Amat Berhormat Dato' Seri Abdullah Badawi for his presence here this afternoon and for accepting to deliver the keynote address at our Forum today. Thank you. 2  BIS Review 30/2007
Of the firms we spoke to, even those with strong market access showed a marked reluctance to rely on that access as their only source of liquidity, particularly to meet projected needs in the initial days of a liquidity stress. For that, they preferred to hold reserves. Taken together, these two factors make up what I will call a ‘preferred minimum range of reserves (PMRR)’ for firms. Chart 9 illustrates the aggregate PMRR for the market as a whole, defined as the region where reserves begin to become scarce. We expect market interest rates to be relatively stable around Bank Rate in this region. This range will naturally include any buffers that firms are holding above their true minimum needs to deal with uncertainties over potential stressed outflows, access to wholesale markets and so on. Chart 9: Locating the Preferred Minimum Range of Reserves  The third driver of demand is the rate of return firms can earn on reserves relative to other liquid assets. In the current environment of very low bond yields, for example, reserves look quite attractive relative to gilts and other liquid assets, encouraging firms to hold reserves well in excess of their minimum preferred levels.15 But QT, when it comes, may imply a steeper yield curve than we see today. And that would incentivise firms to term out their liquid asset holdings towards gilts and other securities and reduce their reserve levels back towards their individual PMRRs.

At some point, QT will drive reserves below the level reserves holders are comfortable holding at the prevailing policy rate, and that scarcity will begin to push short term market rates up above Bank Rate – and make them more volatile – as firms bid up to borrow between themselves. At this point, if we were to do nothing, the existing framework would cease to maintain interest rate control (Chart 8).13  Market rates would not rise without limit: under the Bank’s ‘Operational Standing Facilities’, firms can borrow against high quality collateral at a spread of 25 basis points above Bank Rate. 13  8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  Chart 8: Upwards pressure on short term interest rates under the floor system  Waiting for the exit: (c) Ensuring a smooth transition. Findings from the Discussion Paper To judge where this instability might kick in, we need to understand why firms demand reserves – what they use them for and how readily they would swap them for other liquid assets in different states of the world. In economists’ language, we need to understand the shape of the demand curve for reserves. The difficulty is that this concept is not directly observable. That’s why we issued our Discussion Paper, as a way of beginning a conversation with firms. Since then we have met a broad and representative range of our counterparties: large and small, simple and complex, old and new, UK-based and overseas businesses.