samchain/econo-pairs-v1 huggingface dataset:
This is largely due to improved growth prospects in the emerging markets and to the fact that while in the advanced economies interest rates are and will continue to be low, in emerging countries monetary policy rates have been going up, to very high levels in some of them (figure 10). In Chile, the current account balance for this year (i.e., our expenditures in excess of our income) will be not too different from zero, which means that there will not be a significant net capital inflow to finance excess spending (figure 11). It is thus important to note that I have not mentioned among the causes of the peso appreciation net capital inflows, which in some countries may be having some significant impact. In the 1990s we did receive substantial net capital inflows, but today they are not the main point. Certainly this calls for continual followup because the funds will always flow to the economies with the better prospects for growth, including Chile. As I said, sometimes these flows can trigger lasting misalignments in the real exchange rate with respect to its trend fundamentals. IV. Final remarks  We are well aware of the challenges facing exporters under the present circumstances. In particular, we understand the difficulties exporters in the agricultural sector are enduring, whose primary destinations – Europe and the US – have not fully recovered yet from the financial crisis, and with which our currency has appreciated more. This situation is particularly complex in some regions.

Such a policy has sought to save the transitory income from copper, cushioning the impact of terms of trade cycles on fiscal expenditure, demand, and the real exchange rate. When confronted with the worst international recession since the Great Depression, this fiscal prudence allowed putting in place countercyclical measures that had no precedent in our economic history. In the present circumstances where the economy has already gained momentum, it is adequate to withdraw part of the fiscal stimulus. The plan of gradual reduction of the structural fiscal deficit announced by the government will contribute to moderate demand and remove some pressure from the real exchange rate, although its effects will become apparent gradually over time. Beyond the business cycle, it is also worth mentioning that the persistence of high copper prices in the world markets has been translating into better expectations for its long-term price. In the first five years of the fiscal rule of structural balance, the average reference price for copper was, in real terms as of today, $ per pound; now it is more than twice, at $ per pound. The higher earnings from copper have allowed financing an important increase in public spending as a percentage of GDP and greater transfers over the past few years. This situation has consequences also on the real exchange rate.
The answer is in the levels of output and employment, not their growth rates. After nearly 6 years since the start of the crisis, the level of output in the economy is still 2% below its peak in 2008. A conservative extrapolation of the pre-crisis trend would suggest that UK output is some 15–20% below where it would have been expected to be by this time in the absence of the crisis. It seems unlikely that we will recover much of that gap and in any case the calculation is getting less precise and less relevant. Eventually, economic historians may work out what happened to potential output and we should establish a new reference point. As things stand today, it is difficult to know precisely where the new sustainable growth path of the economy lies (especially as data for the past few years are still likely to undergo significant revision by the ONS). But with unemployment still elevated, and diminishing signs of inflationary pressure in both goods and labour markets, we can be reasonably confident that the economy needs to grow strongly for some time to come, to regain a stable and sustainable medium-term trajectory.

2  BIS central bankers’ speeches  Chicago Fed economists first did work on the prospects for a declining labor force participation trend back in 2001 – near the time the rate peaked at just over 67 percent. 3 Even after revisiting this topic numerous times and with multiple generations of research assistants working on the programs, our economists’ views about the trends that are consistent with the composition of the population and a labor market near equilibrium have not changed much since then. 4 Among the many robustness analyses they performed, their models produce nearly the same trend for labor force participation as they have since 2001. 5 Depending on the details of the specification, Chicago Fed economists estimate that at the end of the second quarter of 2014, the labor force participation rate was between 1/2 and 1-1/4 percentage points below trend. Furthermore, the participation rate was as much as 3/4 of a percentage point below predictions based on its historical relationship with the unemployment rate. This disparity suggests that there likely is an extra margin of slack in labor markets beyond that indicated by the unemployment rate alone. It is interesting to dig further into these “labor force participation gaps.” Virtually all the gap during this cycle has been due to withdrawal from the labor market of workers without a college degree. By contrast, a participation gap never materialized for college graduates, even during the depths of the recession. There is no simple explanation for this striking contrast.
Distinguishes guests, ladies and gentlemen, I believe that the selected topics for this workshop are crucial and match with the current global financial crisis. I hope this workshop will produce fruitful discussions and provide a platform for reserve managers to receive good lessons while exploring best practices in setting the policy framework for the investment and management of reserves. BIS Review 51/2009  1  In addition, I believe that this BIS workshop will also provide all of you the opportunity to discover Angkor, to visit interesting places and to get to know about Cambodian people and their culture. Last but not least, let me wish you an active, productive and successful discussion. The National Bank of Cambodia is very pleased with the current cooperation with the BIS. I wish you all good luck. Please have a pleasant stay in our ancient capital city of Siem Reap, Angkor. Thank you! 2  BIS Review 51/2009

The FSB is developing proposals, for the G20 summit in Brisbane, on total loss absorbing capacity for institutions, so that private creditors stand in front of taxpayers when banks fail. In addition, we are working with industry to change derivative contracts so that all counterparties stay in while resolution of a failing firm is underway. Second, creating fair and effective markets In recent years, a host of scandals in fixed income, currency and commodity markets have been exposed. Merely prosecuting the guilty to the full extent of the law will not be sufficient to address the issues raised. Authorities and market participants must also act to re-create fair and effective markets. In the Bank of England’s view, changes to both the hard and soft infrastructure of markets will be required. Examples of the former include reforming the calculations of benchmarks such as Libor or the daily foreign exchange fixes. The upcoming FSB report on these issues, co-chaired by the Financial Conduct Authority’s (FCA) Martin Wheatley and the Fed’s Jeremy Stein, will be decisive in this regard. Consideration should also be given to increasing pre- and post-trade transparency in a host of fixed income markets and accelerating the G20 pledge to move the trading of all standardised derivatives onto electronic exchanges and platforms. BIS central bankers’ speeches  5  Such changes are vital, but they cannot anticipate every contingency or discipline every miscreant. The scandals highlight a malaise in corners of finance that must be remedied.
We determined not to take any action because of the fact that oil prices had attained  2  BIS Review 86/2005  record heights just before our monetary policy assessment. It was not possible at the time to fully assess the impact on the economy and on inflation. If monetary policy had remained the same at this assessment, the medium-term inflation outlook would once again have been unchanged. In the meantime, however, the room for manoeuvre available to monetary policy has declined. Our inevitable concerns with respect to the high price of oil in September have been dissipated by the favourable developments in the economy. As a result, we have decided to increase the target range for the three-month Libor by 0.25 percentage points. Consequently, this decision is in line with the statements we made at the last monetary policy assessment. Inflation forecast graph I now turn to the current inflation forecast, which is based on the assumption of a change in the threemonth Libor, to 1.0%. The graph depicts the current and the previous forecasts. The dashed red curve represents the new forecast, which covers the period from the fourth quarter of 2005 to the third quarter of 2008. It summarises the inflation outlook, following today’s increase in the rate of interest. The dash-dotted green curve shows the inflation forecast at the time of the last monetary policy assessment and is based on a three-month Libor of 0.75%.

The answer to the first question - what accounts for the divergence? - remains largely a mystery. The Bank’s preferred explanation, reached I have to admit via a process of elimination of other plausible explanations rather than by the existence of incontrovertible evidence, is that the divergence reflects the way in which house prices are “mix adjusted” to take account of the different characteristics of the houses bought and sold in any one month. Changes in the relative composition of the loan portfolios of the Halifax and the Nationwide over the last year or so are likely to have magnified this effect. To answer the second question - what is really happening to house prices? - the Bank has developed an alternative measure of house price inflation using data from the Land Registry. These data have the advantage that they cover nearly all housing transactions in England and Wales and so are more comprehensive than the data used by either the Halifax or the Nationwide. However, the Bank estimate is far from ideal. The published Land Registry data are not ‘mix adjusted’. And, although the Bank staff do apply a simple mix adjustment to take account of the basic type of property brought and sold and the county in which the property is located, it is less sophisticated than that used by either the Halifax or Nationwide. So I would not want to claim in any way that we at the Bank have found the true measure of house price inflation.
Accordingly, much of the burgeoning fiscal deficit that emerged during the crisis is eminently structural. And correcting this means the unavoidable adoption of a far-reaching budgetary consolidation process that bears down precisely on the most permanent and inertial components of public spending. This process is all the more urgent given the seriousness of the repercussions of the Greek fiscal crisis and the pressing need to halt the deterioration in the perception of Spanish public finances. Indeed, the worsening of the fiscal crisis in Greece has substantially altered the conditions governing the design and execution of a fiscal consolidation programme. Systematic and substantive non-compliance with the commitments acquired by the Greek authorities in respect of public finances, added to a repeated lack of informative transparency, resulted in a strong loss of confidence by the markets in the Greek government’s capacity to meet its payment commitments. That gave rise to a completely new situation and, what has finally proved most telling, one not foreseen in the institutional arrangements underpinning the euro area: the perception of a potential risk of insolvency of one of its members. This lack of foresight translated into difficulties in promptly setting up a sufficiently forceful institutional response. These difficulties were clearly identified by the markets and meant that the specific risk of insolvency of a Member State rapidly turned into a systemic risk for the whole of the area.

The euro area is over the worst phase of the recession, but if ambitious supply-side policies are not pursued, recovery will prove particularly slow. All that has been said on the need to revitalise potential growth through structural reforms and to prevent a fiscal crisis through credible fiscal consolidation programmes is a particularly pressing concern for the euro area. The emergence of the fateful “financial crisis-real crisis-fiscal crisis” sequence in one of the Member States, namely Greece, is a particularly serious and important development. Its effects have spread not only to other countries but also to the euro area as a whole, thus turning it into a new epicentre of global financial instability. This episode has highlighted the weakness of the economic governance arrangements for the euro, and is forcing some of its working mechanisms to be reconsidered, with a view to setting sounder foundations in place. Events triggered by the Greek fiscal crisis have ultimately exacerbated significantly the complex framework in which the Spanish economy operates. Allow me to depart from the traditional structure of this address to tackle the important issues raised by the Greek crisis in terms of the consequences for the Spanish economy in this exceptional situation, which poses a welter of challenges to Spain’s medium- and long-term growth possibilities. The shockwave of the Greek fiscal crisis hit the Spanish economy when we were facing the consequences of the deterioration in the labour market and in public finances and the need to complete the banking restructuring process under way.
It speaks volumes that the Group has focused its work in recent years on effective governance, the role of supervision, and on conduct and culture. Each of the four remaining panels will address one aspect of the multidimensional nature of cultural change. •  In the first panel, we will hear about engagement with employees – especially those who are skeptical of the benefits or practicality of reform. •  In the second panel, we will discuss accountability – not only in the sense of being “held accountable,” but also in the broader sense of promoting responsibility and stewardship. I am particularly interested in designing incentives – both the carrot and the stick – that yield conduct aligned with the public purposes of banking. •  The third panel will focus on skill development – particularly on recruiting and training as levers for sustained cultural change. •  And the last panel will focus on leadership and industry collaboration. A prime element of leadership, within a firm and across the industry, is character – behavior anchored in values consistent with the public’s legitimate expectation of trustworthiness. Our keynote speaker today is Christine Lagarde, the managing director of the International Monetary Fund. Christine Lagarde has been outspoken in her view that “financial leaders [must] take values as seriously as valuation, culture as seriously as capital.” 9 This makes abundant sense to me – culture and capital each promote financial stability. Thank you for joining us.

It helps the Banque de France make sure that the economy is supplied with enough financing to grow, and it enables us to track developments in financing for businesses, households and general government simultaneously. The Monetary Policy Council will keep a close eye on other indicators, including all leading indicators of changes in prices, such as capacity utilization rates, production costs, developments in incomes and commodity prices. The Monetary Policy Council will also monitor long-term interest rates and the current account balance. *  *  *  Before announcing the Council's monetary policy decisions for 1997, I would like to discuss the results achieved in 1996. 1. The 1996 results are in line with the targets we set. The ultimate monetary policy goal, which is price stability, was met. Businesses delayed passing on part of the August 1995 two-point increase in the standard rate of VAT until the beginning of 1996. The twelve-month rise in consumer prices was equal to and then above 2% during the first seven months of 1996, but subsequently fell back to 1.ó% in August and September, once the VAT effect had disappeared. The twelve-month increase stood at 1.5% to 1.ó% in November and the latest forecasts predict a price rise of close to 1.5% for the end of 1996. The twelve-month price increase thus resumed its pre-August 1995 trend and will be less than 2% at the end of 1996, in line with the objective set by the Monetary Policy Council.
It will probably only create a host of new problems, while a number of ways of fencing in collateral still remain. For example, one would probably want to avoid that a bank in distress places all of its US treasuries in a country outside of the jurisdiction of the ECB, while only letting its bad loans and other lower-quality collateral be within reach of Frankfurt… Moreover, one must realize that, within a cross-border bank, liquidity shortages can occur in other currencies than the euro, and one will have to find ways to handle this, for example through prearranged swap agreements. I realise, of course, that achieving such a supranational system is a long-term process and it will inevitably going to be politically difficult, and I’m sometimes confronted with the view that it will take a major banking crisis before we’ll be able to muster the resolve to achieve it. However, as a European policymaker, I cannot accept this view. We have a definitive responsibility, and just because things are difficult we cannot let that stop us from trying. And, if a supranational solution is limited to the forty or so of the most important cross-border banks, it may not be so inconceivable, after all. Financial integration is inevitable and necessary if we are to achieve an efficient financial system and to foster growth in Europe. And when integration takes off it tends to follow the logic of business, and not the "logic" of country borders or national laws.

With that, expanding SMEs, for example, could gain easier access to risk capital and incur lower financing costs, in the same way that a more evolved and integrated market for corporate bonds has led to a lower cost of capital for large companies. Consumers, too, would benefit from lower borrowing costs and access to a broader range of financial services. Moreover, both companies and households would have better opportunities to diversify risk. Better use of scale economies should also mean less expensive and more secure ways to pay for goods and services. So, with all these potential efficiency gains, it is clear that further integration of the markets for financial services is vitally important, if we are to succeed with the Lisbon agenda and improve growth in Europe. And this is also the prime reason for the Financial Services Action Plan, which was launched a few years ago. However, at the same time as the financial system is important for growth in the real economy, it is also inherently unstable. In particular, banks could be prone to bank runs due to the liquidity imbalance between their assets and their liabilities. This inherent instability is an important reason for the existence of financial regulation, supervision and macro-prudential oversight of financial firms in the first place. The costs to society from a bank failure could be enormous due to potential contagion to other financial companies, thus posing a threat to the financial system as a whole.
New licences were issued to foreign conventional and Islamic banking institutions, while the minimum foreign strategic stakes in the insurance and takaful industry were increased. Increased operational flexibilities were also accorded to the existing foreign banking institutions in the financial system which now account for about 30% of the banking system. At the same time, the foreign participation in our securities market was liberalised in 2007 to allow foreign corporations to raise financing either in domestic or foreign currency. The capital account liberalisation throughout the first decade in the 2000s has involved the progressive removal of restrictions on foreign exchange administration rules. This liberalisation was intensified after 2005, taking into account the state of readiness of the financial system and the economy to manage the consequential increased cross border financial flows. In July 2005, Malaysia migrated from a fixed exchange rate regime to a flexible exchange rate regime to accord greater flexibility to adjust to changing structural conditions in the region and the global economy. With the progressive dismantling of restrictions, businesses now had the flexibility to manage their financial exchange exposures. This encouraged two way capital flows and contributed towards stabilising the volatile capital flows to our economy. Finally, in addition to being accorded with the necessary powers in the new legislations, the policy toolkit of the Central Bank has also been expanded to address the potential build-up of financial imbalances and its risks to financial stability following increased internationalisation. This includes macro-prudential and supervisory measures to collectively address the underlying causes of financial stability.

11  All speeches are available online at www.bankofengland.co.uk/speeches  11  One can make the point, albeit with an absurdly extreme example, by imagining that the only thing a sceptical outside observer can see is whether or not there has actually been such a problem. We’re interested in how long it would take, possessing only this information, to conclude that the likelihood of such an event had changed. The precise answer depends on what one means by “conclude” and how sure the observer is of her prior belief12. But imagine, for illustration, that after a relatively long period with several such episodes, our observer’s best guess is that the per-annum chances of a serious problem in the financial system are 8% – she expects it to happen only once every 12½ years, on average (I’m thinking of something less severe and less infrequent than the “once-in-a-century” financial crisis of 2008). What she doesn’t know is that, thanks to some beneficial piece of prudential legislation, the  Chart 9: Learning about rare events takes a long time  likelihood has actually fallen to 4% a year. Chart 9 shows how her estimate of the probability is likely to evolve over time. Because these events are rare this happens only very slowly.