samchain/econo-pairs-v1 huggingface dataset:
With the budgetary measures that have been proposed, the fiscal stance will also exert an effect on demand that is more expansionary in the future. In the absence of negative shocks, such a direction of policy normally tends to generate GDP growth above the rate that the economy is capable of sustaining in the longer run. If such a situation is allowed to continue for too long, it can lead to problems with bottlenecks and inflationary tendencies. In time, expectations of inflation’s level in the longer run may be adjusted upwards and this can result in a price and wage spiral that brings inflation above the targeted rate. Such a course of events has to be prevented by the Riksbank, which the Riksdag (Sweden’s parliament) has made accountable for maintaining price stability. So sooner or later the level of the repo rate will have to be normalised in order to counter an acceleration of inflation in an upward cyclical phase. This is something that the Riksbank is discussing, as was evident from the published minute of the Executive Board meeting on 12 August. In the present circumstances what we have to do is decide when – not whether – the time has come to initiate the shift towards a less expansionary monetary stance.

So far, I have mainly spoken about domestic payments, but innovation is also transforming payment systems across borders and currencies. For example, the SW IFT Global Payment Initiative has contributed to faster and more transparent cross-border payments. However, a large proportion of cross-border payments do not go through SW IFT. Cross-border payments are generally expensive, slow and opaque. The services offered are not of the same standard as for domestic payments. The challenges have long been highlighted by international organisations, but implementing changes has proved demanding. The G20 and the Financial Stability Board (FSB) are behind a new and forceful initiative. The FSB has identified measures and recently published a roadmap for their implementation. I hope that this can be a breakthrough in the work to improve crossborder payments. Furthermore, I would like to mention that the Bank for International Settlements (BIS) is in the process of establishing BIS Innovation Hub Centres in many parts of the world. Their primary purpose is to promote insight into financial technology that can strengthen the financial system. One such hub centre is being established in Stockholm, with the central banks of Sweden and Denmark, Sveriges Riksbank and Danmarks Nationalbank, the Central Bank of Iceland and Norges Bank as participating banks, in addition to the BIS. New technology provides new opportunities for innovation, but also presents new risks that must be addressed. Vulnerability to technology-enabled disruption is increasing – whether the disruption is the result of malicious attacks or other factors.
In addition, we monitor various cyclical indicators and acquire information from our regional network.6 There is uncertainty associated with the estimation of both trend growth and the output gap, but the correspondence that seems to exist between the different methods of indicating pressures in the economy makes us confidant that the output gap, as we calculate it, provides useful information. The output gap provides an overview of the overall pressures in the real economy. If there are no substantial economic disturbances - or shocks - there will be no conflict between stabilising inflation and stabilising output and employment. A positive output gap will over time result in inflation that is above target, while a negative output gap will result in inflation that is too low. Nor will demand shocks in a closed economy result in a conflict in the short term between price stability and stability in the real economy. A positive demand shock will result in higher inflation, and an appropriate monetary policy response would be to increase the interest rate as much as is necessary for output to return rapidly to its potential level. In an open economy, however, a conflict of objectives could arise in the short term following a demand shock. Although a higher interest rate would contribute to stabilising both output and inflation, there might be a conflict with regard to the “dosage”.

Despite this advantage, the Bank of Thailand is not complacent and we will continue to prepare our banking sector for future challenges. In this regard, a SWOT analysis of our current financial institutions system reveals that while there was overall improvement in efficiency and soundness, operating costs remained high and financial access gaps remained. Furthermore, there was still inadequate financial infrastructure to support risk management of financial institutions. Meanwhile, future challenges of the next five years would likely come from more intensified competition – not only among banks, but from capital market, both local and overseas. It would also come from more complex and varied needs for financial services, as a result of globalizations and aging population, the shift in resource allocation with greater role of domestic demand vis-à-vis external demand as engine of growth, and finally, capital inflows and external challenges from the global economic crisis. Taken together, these remaining areas of improvement and the need to tackle future challenges have led to the recent launch of the second phase of financial sector reform. This brings me to the second part of my talk: key strategies in the Financial Sector Master Plan Phase 2. When thinking about characteristics that our future financial system is envisioned to have, several keywords come to mind: efficiency, strength and resiliency, diversification, fairness and transparency.
One reason lies in the model that western governments in the 1990s prescribed for the east’s transition to free-market democracy. As it shed its communist past, the east was told to embrace not just liberal democracy but globalisation, open borders and the lightly regulated financial capitalism that the west viewed as the touchstone of its own economic success. This model’s flaws were exposed in the 2008 financial crisis and the European refugee and migrant emergency of 2015–16. […] EU membership, too, has brought more pluses than minuses. Access to the single market, regional aid and, from ordinary people’s viewpoint, Europe-wide freedom of movement are cherished gains. […] This resentment has much to do with the western model grafted on to the east. In 1989, as during Europe’s 1848 revolutions, the people wanted civic freedoms and, in many cases, liberation from foreign overlords and their first independent states of modern times. But after 1989 the adoption of the western model — complete with EU membership, global capitalism and a liberal political philosophy — created tensions between liberalism allied to internationalism and the assertion of a newly acquired national sovereignty. […] Now central and eastern Europe is experiencing its own contest between populist nationalism and liberal democracy. It would be brave to forecast a winner when some western societies are caught up in much the same struggle.” This being said, let me thank you for your attention and wish you insightful discussions.

2/4  BIS central bankers' speeches  While this could be in itself regarded as a lesson, I will go further and add that the recent views expressed by policymakers in Hungary and Poland appear to favour the idea that euro area membership contains the room for growth. A number of public statements are relevant in this respect. The Hungarian Prime Minister, Viktor Orbán, said in April 2013 that “Hungary cannot seriously consider joining the euro zone until the country’s average economic development reaches 90 percent of the level of euro states”. Poland’s former central bank governor Marek Belka stated in 2015: “You shouldn’t rush when there is still smoke coming from a house that was burning… As long as the eurozone has problems with some of its own members, don’t expect us to be enthusiastic about joining”. His successor at the helm of the monetary authority in Poland, Adam Glapiński, said that – and I quote – “We will not give up on the zloty (currency), because it will dramatically limit growth opportunities for the Polish economy”. Back in 2001, Leszek Balcerowicz noted that structural reforms are those that harmonise nominal and real convergence, as there are also unavoidable tensions between the two. The more comprehensive the structural reforms, the less costly the disinflation and the more robust the economic growth over the long term.
The time to push ahead on tackling climate change Speech given by Andrew Bailey, Governor of the Bank of England Corporation of London Green Horizon Summit, Mansion House 9 November 2020  1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  It is a great pleasure at least to have the opportunity to meet virtually. Today, I want to focus on how we ensure that we get back to the vital subject of tackling climate change and the role of the financial system. First, I want to say what a pleasure it is to be sharing a platform today – so to speak – with Mark Carney. As I have told Mark quite a few times, timing is everything, and midnight on March 15th was an interesting choice of date to hand over as Governor. But let me also say that in everything that has happened since at the Bank we have benefitted from the many things that Mark did during his term, and for that we owe him great thanks. Mark has gone on to push forward his deep commitment to tackling climate change, and the role of the financial system in doing that. There have been times since March when we have faced very stark decisions in the face of the Covid crisis. We decided in the spring to prioritise preserving people’s jobs and livelihoods in this emergency, and as far as possible the businesses that provide employment and the life blood of the economy.

We would like to see greater ambition still, including wider adoption of these best practices, and that will be a focus for us when the UK takes over the G7 presidency and works closely with the Italian G20 and together we co-host the COP26 next year. Thank you. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5
First, I will discuss the historical and theoretical basis for the current monetary policy. I will then move on to discuss monetary policy in practice and will also look more closely at the requirements inflation targeting imply for our analytical tools. Historical and theoretical basis for inflation targeting - lessons and experiences In particular, two fundamental lessons from the last 30-40 years have taken on considerable importance for economic policy in general and monetary policy in particular. We can, perhaps, say that these lessons have led to a paradigm shift in economic policy. One lesson is that if the authorities do not take into account that economic agents are forward-looking when they make decisions about consumption and investment, wages and prices, this may have adverse consequences. Agents take into account their expectations concerning future economic policy, not only today’s economic policy. It is thus important that the authorities do not sow doubt about their objectives. They must act in a predictable and credible manner within a long-term framework. There must be consistency between the stated objectives of economic policy and what is actually done to achieve these objectives. This is exactly what Kydland and Prescott pointed out in their pioneering work from 1977.2 Their work was based on insights from the theory of rational expectations, an area where Robert Lucas, who received the Nobel Prize in 1995, made a significant contribution.3 Economic agents will not systematically misjudge what the authorities plan to do in the future.

Looking at just the past four or five years, there is no doubt that certain laws of economics have been stretched to their limits and, in order to convince outsiders that the stakes have not been set too high, we have had to insist – and rightly so, I hope – that Iceland’s economic environment has various advantages that are not immediately obvious to those who are accustomed to operating in larger and more restrictive conditions. Here there is great flexibility, official measures are very transparent and channels of communication are shorter, which enables easier decision-making so that households, businesses and the authorities are quicker to respond to economic incentives or challenges than is the case elsewhere. To give you all a more complex and interesting topic to discuss at a conference such as this, the government itself promoted a number of measures that will benefit Iceland and its people in the long run. However, their timing and scope may have been more questionable. Thus the government itself was mostly responsible for attracting the largest single investment that has ever been made in Iceland, to which the state-owned power company, Landsvirkjun, had to respond by matching it with an investment of its own on the same scale. The inflow of capital was enormous.
And they can be further minimised if we can ensure that when the adjustment and loss occurs, other features of the financial system do not amplify and spread the stress. The great, post crisis, programme of reform of financial regulation, that is now well into its implementation had precisely this objective. Much stronger prudential rules require banks to have capital and liquidity to enable them to take losses and withstand liquidity stress in excess of the losses and stresses encountered in the financial crisis. 19  Bordalo, Gennaiolo and Shleifer (2018) 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Major UK banks now have capital ratios that are more than three times higher than before the financial crisis and their short-term wholesale funding has fallen from being more than 15% of total funding in 2007 to less than 5% today.

I might equally have talked about cyber risk or the impact of a credit correction in China. It is of course the job of policymakers like me to assess and address potential vulnerabilities like these, and we report on them regularly. But to me the bigger point is that at some point, in some way a correction will be triggered when the future, for whatever reason, does not match up to expectations of those who have lent and borrowed and bought assets. Our fundamental task is to ensure that when that happens, the correction can be absorbed and does not lead to a ‘great crisis’, as it did 10 years ago, with all the social and economic loss that entails. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  References Aikman, D, Nelson, B, and Tanaka, M (2015), ‘Reputation, risk-taking, and macroprudential policy’, Journal of Banking and Finance, Vol. 50. https://doi.org/10.1016/j.jbankfin.2014.06.014 Aliber, R and Kindleberger, C (2005), ‘Manias, Panics, and Crashes’, Wiley Bank of England (2014), Financial Stability Report June 2014 Bank of England (2016), The Financial Policy Committee’s approach to setting the countercyclical capital buffer: a policy statement Bank of England (2017), Financial Stability Report November 2017 Bank of England (2019), Stress testing the UK banking system: key elements of the 2019 annual cyclical scenario Bernanke, B (1983), ‘Nonmonetary effects of the financial crisis in the propagation of the Great Depression’, American Economic Review, Vol. 73, No.
Jürgen Stark: Towards a stability-oriented policy framework Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the conference “Reconstructing the world economy – redesigning the macro-framework”, organised by the Korea Development Institute and International Monetary Fund, Seoul, 25 February 2010. *  *  *  Ladies and Gentlemen, In discussing the current macroeconomic framework, I will focus on the institutional aspects that have proved successful, in particular, from the European perspective. These are central bank independence, the centrality of price stability for monetary policy and the need to adopt a medium-term, rules-based perspective in the conduct of monetary and fiscal policies. The financial crisis has not contested or discredited these three principles. However, it is certainly true that other aspects of the international consensus framework merit some deep re-thinking. I will take this opportunity to share my thoughts on four such elements, namely inflation targeting, central banking as risk management, monetary policy and asset prices, and fiscal policy. The reference model Inflation targeting, together with the canonised version of the New Keynesian model on which it is predicated, is perhaps the main building block of the pre-crisis consensus paradigm. Although they are closely connected, I wish to separate the policy prescriptions from the underlying model, and address each in turn. The shortcomings of the New Keynesian modelling paradigm have been recognised before. But addressing them has not yielded a paradigm shift to overcome them.

In addition, the monetary policy normalisation we have embarked on has established the premises for controlling inflation and safeguarding the economic and financial stability of Albania. In this view, I would like to welcome the positive role played by the banking industry over 2022, by maintaining a positive approach towards lending to private sector and taking the necessary measures to manage added risks in your balance sheets. I am confident that these measures, and others we may take in this regard, will pave the way for a rapid return to normality. Though risks remain present, our projections suggest inflation will return to target within the first half of 2024 and the Albanian economy will continue to maintain a positive growth pace throughout this period. As important actors in the economic and financial life of Albania, I would like to reemphasise that our decision making should be forward-looking, decisive and courageous. Albania has a solid economic growth prospects in both medium and long term. They have enabled the continuous expansion of economy and of the banking and financial system in the recent years, and should feed your confidence in the Albanian economy in the future. These prospects will further benefit in the framework of Albania's membership process in the European Union and from the agenda of structural reforms. 1/4  BIS - Central bankers' speeches  For this reason, I kindly invite you to stand up for these processes.
BIS Review 21/2009  13  Bank of England  Stabilisation  MoU  Equity & Efficiency  Regulation  FSA  HM Treasury  Chart 2 : The Great Stability Variance of inflation  ( )A  ld  De jure gold standard (1855-1913)  Floating of the pound to inflation targeting (1972-1992)  Bretton Woods (1948-1972) Inter-war period (1922-1939) Inflation targeting (1992-2004)  0  1  2  3  Chart 3: Consumption Growth  14  4  Variance of6output 5  7  Chart 4: Indicators of labour market tightness  BIS Review 21/2009  Percentage changes on a year earlier 10 8 6 4 2 0 -2  1973 Q3 1980 Q1 1990 Q3 2008Q3 -16  -12  -4 -6 -8  -4  0  4  8  12  16  Chart 5 : Change in leverage ratios of the major UK banks(a),(b),(c) Maximum-minimum range Interquartile range  Change in ratio 40  Median  35 30 25 20 15 10 5 0 -5  02  03  04  05  06  07  08  S o urc e : P ublis he d a c c o unts a nd B a nk c a lc ula tio ns .

These have a number of attractive features. It is built on sound economic principles of forward-looking optimising agents, which is useful for carrying out academic though experiments. Unfortunately, such models also have some big drawbacks. First, having introduced uncertainty into the picture by making agents forward looking, they then assume the problem away. Risk doesn’t matter: agents are assumed to make decisions today based on the path they believe the economy will take in the future, not the full range of possible paths it might take. And those beliefs about the future are based on absolute faith in the ability of the policymaker to stabilise inflation and the economy over the medium term. BIS Review 21/2009  7  They therefore beg some important questions for policy makers – how do we sustain and build confidence in our policy and what happens if it falters? Second these models generally assume that the path of the economy is one of equilibrium disturbed by a sequence of more or less random shocks to which it responds in short order to return to the equilibrium path. For economists using these models a critical question is always what shocks have led to the starting position i.e. how far from equilibrium are we and for what reason. Those starting assumptions will then condition the path back to trend growth and target inflation over the medium term. In truth, these “shocks” reflect not only events and surprises in the real world but the limitations of the model itself.
I believe that the role played by the Banco de España in promoting this accumulation of provisions is well known, so I shall not dwell on this point. I will, however, point out that there are various idiosyncratic factors in the performance of Spanish institutions that have limited their exposure to the current shocks. I have already mentioned that in the euro area there is no equivalent to the US sub-prime mortgage market, an observation that applies fully to Spain. Rather, the credit quality of Spanish mortgages is high, as shown by the low doubtful assets ratio and the moderate levels of the average loanto-volume ratio and of the collateral required. Along these same lines, the weight of the assets linked to the sub-prime mortgages on institutions’ balance sheets is completely marginal, as is also their indirect exposure through any lines of credit granted to other financial intermediaries that may actually hold such assets. The fact is that intermediaries of this type have not proliferated in Spain’s financial system. One of the factors that has probably contributed most to preserving the quality of assets in the Spanish financial system is the persistence of a traditional banking model in which, unlike in other countries (especially the United States) in recent years, institutions have used asset securitisation mainly to fund the expansion of activity and not to transfer to third parties the risks associated with their loan portfolio.

While the lack of economic convergence among Asian economies may make an Asian Monetary Union a more challenging prospect, it is interesting to note that quite a number of governments in this region have already chosen to sacrifice some monetary policy autonomy for exchange rate stability. Hong Kong, Mainland China, and Malaysia choose to fix their exchange rates against an external currency, the US dollar, while other regional economies operate managed floats. There are indications that some economies are considering using the renminbi as a reference currency in their currency regimes, although a hard peg to renminbi is still not possible until full convertibility is achieved. It might  2  BIS Review 19/2005  also be the case that, while Asian economies are more diverse than European economies, they are flexible in ways that can compensate for the loss of independent monetary policy, for example, in their high degree of price flexibility and fast adjustment to economic shocks. It may seem premature to turn now to the technical issues surrounding Asian monetary union, but the devil is in the detail. The first set of technical issues involves the exchange rate arrangements themselves, including the transitional arrangements prior to the introduction of a single currency. For example, would Asia adopt a basket peg or choose an anchor currency? If a basket, what would be the weights for individual currencies, and would the basket include external currencies, such as the US dollar?