samchain/econo-pairs-v1 huggingface dataset:
In such cases it’s not possible to prevent inflation from deviating from the target, and even if it was possible to lessen the deviations, it may require such sharp movements in interest rates and such substantial effects on the economy that it would not seem desirable or reasonable. When inflation deviates from the target, we normally try to bring it back gradually to the target so as to avoid unnecessary fluctuations in the real economy and in interest rates. When Sweden became one of the first countries to define its objective for monetary policy in terms of a definite figure - even though we were very aware of the fact that it would be difficult to meet such a target exactly - we did so for several reasons. One was to find an anchor for policy - a target around which inflation expectations could be stabilised. But it was also done with a view to facilitating evaluation of our activities and to make it easier to enforce accountability. Further steps were taken in the same direction when we, once again among the first in the world, decided to publish the material underpinning our decisions, mainly our inflation forecasts. This provided a more comprehensive basis  BIS Review 59/2004  3  on which to analyse the background to our policy. Are deviations from the target a result of incorrect assessments? If so, in what respects? Do we differ from other forecasters or not, etc?

11  Page 12 of 19  The long-distance run towards the stabilisation phase We are now entering a new, slower, longer and more open phase. After the sprint comes the long-distance run. Expectations are continuing to focus, excessively in my view, on our speed: are we going to continue our 50-basis-point hikes after March? I shall not answer that today, first because our decisions over the coming months will be guided by the data. Above all, it is also because there are two more important variables in this new phase: the level of interest rates that we reach, and the duration for which we stay there. The level of the “terminal rate” Regarding the level, the markets’ estimate of the “terminal rate” was, until the last few days, around 3.5% in the euro area. The fluctuations since yesterday may be excessively volatile, but I shall just make one comment here on the calendar and another on the substance. Regarding the calendar, without setting ourselves any strict time limit, I think it is possible that we will have reached this peak by summer... which officially ends in 12  Page 13 of 19  September. That would leave us four Governing Council meetings, after the one in March where we will have reached 3%. We shall probably go beyond this 3%, but there will be no obligation to act automatically at each Council meeting, and we are not ruling out acting subsequently if new elements justify it.
Investment and, for a part, production, came abruptly to a halt. When such a shock occurs, public provision of liquidity has to substitute to private provision. In a domestic context, this is the function of the lender of last resort. But when the shortage is about foreign currency liquidity, this role has to be played by foreign exchange reserves. Foreign exchange reserves Following the 1997–98 crisis, emerging countries have constantly sought to expand their foreign exchange reserves. The emerging markets’ average reserve ratio has more than quintupled from 4 percent to over 20 percent of GDP since 1990 (Obstfeld et al. 2009, Matteo y Lagos et al., 2009). One cannot assume, however, that equilibrium has been reached and that the demand for reserves will stabilize. On the contrary, there are strong indications that this trend will persist, or even be amplified, following the crisis. 6  BIS Review 76/2010  How much reserves are enough? Theoretical reasoning would balance the benefits of holding reserves against their cost, with some notion that there is an optimum. On the benefit side, reserves can be detained or accumulated for a variety of motives:   to smooth out the impact on consumption of shocks on the current account, which is the most basic and traditional motive, even in the absence of international capital flows    as a result or by-product of foreign market intervention to prevent exchange rate appreciation. This is usually defined as a “mercantilist” motive.

One, we will broaden the scope of eligible investments to include blended finance structures in which financial institutions in Singapore have been substantially involved. Two, we will give more recognition to concessional capital invested in such blended finance structures. Concessional capital is capital that accepts lower returns or higher risks, compared to other investors, and can help catalyse commercial capital into worthwhile but less attractive green and transition projects. The ability to crowd in capital from other investors is why we want to encourage and give extra recognition to concessional capital. Hence, for every dollar of concessional capital invested, we will recognise it as equivalent to up to $ of investments for the purpose of assessing if the SFO has met its investment requirement. Three, we will recognise grants that SFOs give to support such blended finance structures. Grants have no expectation of income or return of principal. Given its deeply concessional nature, we will recognise as $ for every dollar of grant given to blended finance structures. Second, we will encourage SFOs to invest in climate-related projects. For the purpose of assessing if the SFO has met its investment requirement, we will recognise its climate-related investments – anywhere in the world, and not limited to Singapore. 12/16  BIS - Central bankers' speeches  Climate change is a global problem that is not bounded by national borders. As a low-lying island state, Singapore is particularly vulnerable to climate change. We should thus recognise all efforts made to address climate change issues.
The Fed held a conference in Woodstock, Vermont in October 1999 on the ZLB.1 At that conference, Marvin presented his paper “Overcoming the Zero Bound on Interest Rate Policy,” which was subsequently published in the Journal of Money, Credit and Banking (JMCB).2 In January 2002, Marvin briefed the FOMC on aspects of the research that he had presented at the Woodstock conference, as part of a session on the ZLB in which David Reifschneider and I presented our research as well.3 By that point, the federal funds rate had fallen to 1.75 percent, so the ZLB was starting to get on policymakers’ radar screens. On those occasions, Marvin emphasized the importance of the ZLB as a constraint on policy and urged us to think differently about how central banks could still carry out their missions, even under that constraint. He developed and analyzed what were then considered “outside the box” options for overcoming the ZLB. These helped lay the groundwork for how economists and 1/2  BIS central bankers' speeches  policymakers think about these issues in both conceptual and practical terms. For example, Marvin was one of the first people to think seriously about how the constraint caused by the ZLB could be relaxed by implementing negative interest rates. Now, I know that the topic of negative interest rates is controversial. But, whatever conclusions you may draw about the relative merits of negative rates, Marvin’s research early on helped identify and explore a broad dimension of issues and potential choices for policymakers.

But we have to ask what sort of operational risks might be involved. What sort of governance framework will banks need to ensure proper accountability? Could it lead to new ethical or other issues? For example, could the use of AI in credit scoring result in unfair treatment for certain groups of customers? Will AI output require additional “human” perceptive oversight? 25. To help banks, the HKMA recently issued two circulars, one on high-level risk management principles on the use of AI, and the other on the related consumer protection issues. We tried not to make these overly prescriptive, as this is a new area. The fact is that banks and ourselves are learning together. We all still need to explore exactly how technology should be implemented and overseen in practice. 26. The HKMA is conducting research in AI applications to help everyone. We are publishing some results today, in the form of an information sheet of facts and figures from an industrywide survey. One key finding is that almost 90% of our retail banks have already implemented, or are planning to implement, AI in their business applications. We will publish a series of reports in the coming months to provide more insights into the application of AI in the financial services industry. 27. We also want to work more with banks and the technology sector on developing regulatory technology, or RegTech. We all know that data analytics and machine learning can help the industry perform compliance work more accurately and more cost-effectively.
Market interventions in 2000 and 2001 depleted the Central Bank’s foreign reserves, creating a pressing need to strengthen it. The  2  BIS Review 45/2003  Central Bank has been engaged on this task and will continue to do so. It had purchased foreign currency for the equivalent of 30.7 b.kr. since September 2002, which has undoubtedly exerted some impact on the króna in the short run, although the long-term effect is negligible, if any at all. The exchange rate for the króna plummeted in 2000 and 2001, and for quite some time was substantially below a level reconcilable with long-term equilibrium. This occurred at a time when the price of key exports was very high, making the years 2000 and 2001 especially favourable for the export sector and in fact also for import-competing sectors. Enterprises in these sectors understandably felt the effects of the rise in the exchange rate in the first half of this year. It is not to be expected, however, that the same conditions will re-arise in these sectors as prevailed, for example, during 2001 and in the early part of 2002. The exchange rate remained very stable from spring to early winter 2002, when the króna entered a strengthening phase which continued until the beginning of February. The Central Bank has stated its view that the appreciation over this period was primarily the effect of planned aluminium-related investments in East Iceland.

But first of all, what does RMB internationalisation have to do with the mutually beneficial relationship between the Mainland and Hong Kong that I have just mentioned? 6. To answer this, let’s first talk about how Hong Kong, as an offshore RMB centre, has contributed to the internationalisation process. Very few will dispute that offshore markets have played and will continue to play a very important role in the process of RMB internationalisation. Indeed, if we look close enough, the internationalisation of a currency and the development of offshore markets often go hand in hand. If a currency has the 1/4  BIS central bankers' speeches  potential to be an international currency, it will show it in offshore markets. Not only that, the presence of offshore markets will actually help establish and reinforce the global status of a currency. It is hard, for instance, to imagine that the US dollar could attain its current status without a fully developed Eurodollar market. 7. But then what’s so special about us? Hong Kong is not the only RMB offshore market, but we are the one which stands out from our global peers in offshore RMB business. And we offer very unique value propositions such as being part of China and staying well connected to the world, a sound legal and regulatory system, a deep and liquid capital market, a robust financial infrastructure, and a wealth of financial intermediaries and talent.
The slower recovery abroad, with lower policy rates, indicates that interest rates in Sweden will not need to be so high. Household debts still cause concern One factor that I personally have taken into consideration when raising the repo rate this time and supporting the forecast for continued increases, is the development of household debt. If this does not slow down, I believe that there is a risk of financial imbalances arising, if not within, then beyond the forecast horizon. I believe that a gradual increase in the repo rate will contribute to reducing this risk. Finansinspektionen’s recently introduced loan restrictions are also one step in the right direction. A future challenge will be to find an appropriate balance between supervisory regulation and interest rate-setting. Of course, this overall picture may have to be revised if developments do not turn out as we are expecting. I have already pointed out that the global economy is facing fairly major challenges. A new economic downturn abroad could lead to lower resource utilisation and inflation in Sweden, too. Monetary policy would then need to be more expansionary than in the forecast. But there is also a possibility that the economic upturn in Sweden turns out to be faster and stronger than we have assumed. In this case we might need to raise the repo rate slightly faster. But none of these alternatives is our main scenario at present.

This is where the regulatory framework enters in: to place limits on risk and to set capital requirements so as to reduce the likelihood of a run on the banks, leaving taxpayers to pay the bill. How high the requirements must be is always a balancing act, as it is hardly possible — and actually undesirable — to set them high enough to render the banks bullet-proof. We must not allow the banks’ current resilience to blind us to the great challenges facing them. These challenges centre, among other things, on rapid technological advances, increased competition with other financial institutions and companies that offer payment services and loans, increased regulatory burdens, high cost levels, operational risk, cybersecurity threats, and ownership issues. Of course, it is the task of the banks themselves and their owners to take on these challenges, which — as always — represent both threats and opportunities. But the legislature and supervisory institutions also have a part to play. The regulatory burden should not be any more stringent than is needed to limit risk at any given time. Simultaneously, it must be ensured that the regulatory framework extends to all financial market service providers that could contribute to the creation of systemic risk. Maintaining effective consumer protection is important as well; otherwise, there is the risk that justified dissatisfaction will develop — dissatisfaction that will ultimately erode confidence in all financial institutions.
In this period, there were a total of ten devaluations or "technical adjustments" that entailed devaluation, often with the aim of bringing costs back under control. The objective of keeping inflation stable was set aside. Repeated devaluations eventually led to expectations that the authorities would not in the future stand by their promise of a fixed exchange rate, and that if price and cost inflation became too high, it was expected that the krone would be devalued again. The social partners began to take higher inflation into account in wage demands and price setting. The last devaluation came in 1986. Subsequently, the interest rate was used to maintain a fixed krone exchange rate in order to bring price and cost inflation under control. We again chose a fixed exchange rate and other countries' inflation as a nominal anchor. Economic policy was influenced by the experiences of other countries that had dealt with the problem of inflation earlier, such as the US and Germany. The decline in inflation in Norway thus came in the wake of the fall in inflation abroad. Historical data seem to suggest that after turbulent periods, inflation gradually reverts to a low and stable level and that over time domestic inflation is determined by external inflation. However, inflation in a country with its own national currency is not something that just drifts in with the wind from abroad. It is the monetary policy choices we make in Norway that determine price developments here.

As Mervyn King, the Governor of the Bank of England, stated explicitly to the point2: “..that’s what we have to do with every variable that we look at, work out why it’s growing faster or slower than it was before and not to use some rather mindless regression.…The secret of good policy is to try and think trough what are the economics of the shocks hitting the economy at present. That in a nutshell is my philosophy of how you should do policy. Don’t rely on regressions from the past.” Having discussed the role of monetary policy and rather complex economic models, I will move on to the final theme which may seem more prosaic, notably measuring current inflation. In general, the production level of economic statistics is probably very high in Norway, as shown in international comparisons by the IMF among others. It would also seem that it is very cost-effective. Improvements are frequently made to the methodology and the compilation of CPI statistics. In August this year, the indices for electricity, books and air travel were revised. Last year, Statistics Norway changed the method for the treatment of rents in the housing market, and the previous year the food index was revised. A general view is that changes in statistics production should be well documented and should place particular emphasis on identifying the effects such changes might have on measured inflation.
In a sense, the work is cut out for us, we need to distrust the status quo or we will continue to live in a decaying, sub-optimal and dysfunctional system, punctuated with frequent financial crisis. The needed reform will mean less disruptive capital flows, more robust financial safety nets and most relevant of all, greater impetus for diversification that will lead to greater resilience. Now is as good a time as any to begin. I wish all of you a productive dialogue. Thank you. 5/5  BIS central bankers' speeches

In doing so, it is important that we not lose sight of one of the longerterm goals of the New Capital Accord - that it will enhance the capabilities of banks and supervisors to better understand and address risk. 4. Next steps in finalizing the New Accord  Most of my remarks today have been centered on implementation of the new framework. I’d like to conclude by spending a few moments discussing where we are in the process to finalize the New Accord. As you may be aware, the Committee has just finished gathering data from the industry for its third impact study. The aim of the study was to collect and to analyze information from banks worldwide regarding the capital impact of the new proposals on their existing portfolios. The results are under review and will help us to determine whether any adjustments will be needed prior to release of the final consultative package this spring. This information, as well as feedback received through our ongoing discussions with industry participants, will be critical in shaping the final document. It will also help to ensure that the final framework meets the objectives the Committee has set out for itself in developing the New Accord. I'm very pleased to say that the preliminary indications from all of our efforts suggest that we look to be on track in meeting our primary goals.
The spectrum of buy side institutions active in FX is particularly complex and varied, encompassing hedge funds, high frequency trading firms, asset managers and corporates among others. The size and complexity of their FX market activities and the nature of those activities may differ significantly. Hearing the viewpoints of many different institutions was critical to delivering a relevant Code for this diverse landscape, recognizing that while the Code applies to all, the details of precisely how it applies may differ. I found that the series of frank debates and discussions that we—market participants and central bankers alike—had over the past two years was an important process in itself, and not just a means to an end. The result was multiple drafts of the Code and, ultimately, a product that more clearly articulated principles and defined terminology. The 55 principles within the Global Code focus on promoting transparency, fairness and mitigating risk across six primary areas–Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement. I would like to highlight a few of these principles to provide a sense of the Code’s content, and use these examples to illustrate some of the fundamental building blocks of a fair, transparent, and efficient market. The Code begins with principles on ethics. The very first principle states that Market Participants should strive for the highest ethical standards. While this is a basic concept, the principle is fundamental and underpins each and every principle that follows.

This turnaround in the economy has prompted an active debate about when the Bank’s monetary policy stance should be shifted from back foot to front – in other words, whether and when UK interest rates might rise. Market expectations of future interest rates have already adjusted since the economy began growing. In January 2013, the first rise in UK interest rates was expected in the third quarter of 2015. Now, it is expected by the end of this year. This prospect has sent shivers down some spines. But some context is important here. When the first rate rise does come, it will be because the economy has recovered sufficiently to thrive on smaller doses of monetary medicine. A normalisation of interest rates would signal the economy having returned to the hospital ward, after six years in intensive care. The economy would be switching channels, from ER to Casualty. That is something to welcome, not fear. At the same time, the Bank’s policy guidance was introduced in August last year in part to prevent interest rate expectations getting ahead of themselves and derailing recovery. From our survey evidence, it appears that businesses listened and took heed. Investment rose 8.5% during 2013. This has meant the UK’s recovery has not just been healthy but reasonably balanced, with both households and companies contributing. Today’s uncertainties None of this leaves the job of judging the future path of monetary policy an easy one.