samchain/econo-pairs-v1 huggingface dataset:
Interest rates must focus on the economy-wide inflation target. But macroeconomic stability benefits all sectors of the economy. That stability, upon BIS Review 111/1999  4  which the aspirations of parliamentarians, both at Westminster and in Edinburgh, depend, is fundamental to the future prosperity of the United Kingdom. And to maintain stability, interest rates will sometimes go down and sometimes go up. For a quarter of a century, my generation – the inflation generation – suffered from the instability created by high and unpredictable inflation. To the next generation, I would like the Prime Minister, whoever he or she is at that point, to be able to say, “You’ve never had it so stable, not just for one year, or two years, or even three, but for a whole generation.” It is well known that many, if not most, of the great British economists were Scottish. One of the few English economists to rival the Scots was John Maynard Keynes. His view was that, “If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!”. So perhaps the fate of the MPC is, rather like dentists, to perform an important service but one which does not make people happy. Regular monitoring and early treatment, while rarely pleasurable, prevent more unpleasant symptoms later. So it is with a pre-emptive monetary policy.

The programme will (i) create a one-stop knowledge hub, (ii) forge a community of practice and innovation, (iii) deploy advisory support for green transformation, and (iv) promote green investment and financing activities. 10. As a first step, we are pleased to formally launch the Alliance’s membership programme by inviting five leading banks in Asia with demonstrated achievements in green finance to join as Cornerstone Members. 11. They are, in alphabetical order, Bank of China (Hong Kong), Citi, Crédit Agricole CIB, HSBC, and Standard Chartered. 12. The Cornerstone Members are committed to making further progress in mainstreaming green finance, achieving carbon neutrality, and having an environmental, social and climate risk management system. 13. They will also support the Alliance’s strategy and outreach plans to expand the membership network, promote green finance market and product development, and spearhead knowledge sharing and thought leadership activities. 14. The Alliance also seeks to amplify the synergy by bringing in institutions that are engaged in cutting-edge research, capacity building, and standard-setting related to green finance. 15. We are delighted to announce that Carbon Trust, the Institute of Public and Environmental Affairs, and the Resource and Environment Branch of China National Institute of Standardization have joined the Alliance as Global Partners. 16. We are also honoured to have the University of Chicago joining the Alliance as a Knowledge Partner to assist the Asia Chapter’s training and thought leadership efforts. 17.
As long as private-sector decisions are partly based on expectations about the future, and the central bank through its actions and communication can influence these expectations, the chart illustrates a result that is independent of the explicit economic model: If the central bank can commit itself credibly to a response pattern, it will be able to achieve a better outcome over time than if in each period it attempts to optimise the situation. This is illustrated in the chart in that the line that represents a commitment strategy lies closer to the origo point than the line that represents a discretionary strategy. If, however, economic agents are purely backward looking, there would not be any differences between the two approaches, and the two lines would converge into one. The more forward-looking the economic agents are, the greater the difference between the outcomes is. The way in which monetary policy is implemented and communicated may therefore influence the functioning of the economy through the expectations channel. By committing to a pattern of behaviour, the expectations channel can be used effectively. BIS Review 10/2007  11  Let us now take a closer look at our projections in the previous Inflation Report. The inflation gap closes gradually from below, while the output gap closes from above. According to the Bank’s view, these paths provide a reasonable trade-off between the objective of stabilising inflation at target and stabilising developments in output and employment. Let us now use a time machine and travel forward to 2008.

This is the basis for central bank independence. If price stability, by contrast, were regarded as just one out of a long list of political and economic objectives - rather than as a common goal and a precondition for the successful pursuit of other objectives - then there would be no legitimacy for entrusting this task (and only this task) to independent central banks. Making value judgements when trading-off different objectives and balancing conflicting interests is the legitimate job of elected politicians with a popular mandate and not of appointed technocrats. An independent central bank thus pre-supposes a broad consensus on the “quasi-constitutional” nature of the common good of price stability. Assigning the central bank a clear overriding objective also imposes limits on its discretionary exercise of power and makes it easier for the public to hold the central bank accountable for its mandate. This is important to keep in mind if we entertain the possibility that while, yes, “money is too important to be left to the politicians” one could similarly concur with Poincaré that “money is too important to be left to central bankers” (as quoted by Milton Friedman in his 1962 essay on “Should there be an independent monetary authority?”). In other words, why should one trust central bankers more than politicians?
The model must be transparent and manageable  Norges Bank’s administration, management and Executive Board must be able to interpret and understand the model. It must not be perceived as a black box. It must have a theoretical structure so that we can easily examine the effects of alternative views of the economy’s functioning. 5. The model must reflect the Bank’s view  As a result of the modelling work, the Bank’s views on relationships in the economy will evolve. At the same time, we are developing a model with relationships that we have confidence in. Models will never provide us with a definitive answer. A model will always represent a simplification of reality. We must be pragmatic and exercise a good measure of judgement in addition. In my view, the most important role of models is to provide a framework and structure for the decision-making process, and to ensure that we do not change our views on the functioning of the economy without thorough reflection. BIS Review 36/2004  7  The use of models must also be seen in connection with the uncertainty associated with the actual state of the economy and the driving forces that dominate at a given point in time. It can be a demanding task in itself to find the balance between incorporating new information on the one hand and making abstraction of pure noise on the other. Allow me to illustrate.

This alternative for Norway was discussed in 1997 at the initiative of Norges Bank.10 Many countries had already gained many years’ experience in operating such a system. New Zealand was the first in line towards the end of the 1980s. Canada followed shortly thereafter. In New Zealand, the switch to inflation targeting was one component of a comprehensive public sector reform aimed at addressing incentive problems associated with economic policy. Canada, which is one of the industrial countries with the most experience of floating exchange rates, had been seeking a nominal anchor for some time. Towards the end of the 1980s, the central bank’s communication increasingly emphasised price stability as a monetary policy objective. An inflation target was officially introduced at the initiative of the finance ministry and in a joint statement issued by the central bank and the finance ministry.11 Sweden introduced an inflation target in December 1992, inspired to some extent by the experience of Canada and New Zealand. After the deep economic crisis at the beginning of the 1990s, reverting to a fixed exchange rate policy was no longer deemed realistic. In this context, it must be added that the central bank of Sweden, when it was seeking to motivate and firmly establish inflation targeting during the 1990s, was able to draw on its own experience from the 1930s. Admittedly, Sweden did not have an inflation target but a price target for monetary policy in the period 1931-1937.
But the important point here is that financial innovations, coupled with technological advances in communications, helped to link financial markets across the globe. This globalization of financial services allowed the collapse of major financial centers to spread to the rest of the globe so efficiently. In fact, these very financial instruments which had been earlier used to diversify risks turned out to be the very means for spreading contagion. The spread of the impact of the financial crisis onto the global real economy through the trade channel changed the world’s economic outlook rapidly and dramatically. This had a drastic impact on the inflation outlook, and the threat of inflation has rapidly shifted to one of possible deflation. At the same time, central banks are running out of traditional monetary policy ammunition to fight the slowdown in growth and potential deflation – namely cutting interest rates. Given the increasing influence of external factors on global inflation dynamics, traditional monetary policy which focuses on domestic dynamics of inflation needs to be reconsidered. As a result of globalization, the prices of important commodities and goods tend to move together, making external price shocks a more and more important determinant of domestic inflation. Fluctuations in oil prices and other commodity prices, or even a sustained period of cheaper or dearer exports, can change global inflation dynamics.

Working with SNB over the last ten months to set up this branch has been a real delight for MAS. You are clear in your objectives, methodical in your approach, and always gracious and understanding in your dealings. Thomas, you will always have the full support of my colleagues and I at the MAS, as SNB grows its presence here. Once again, please accept my congratulations on the opening of your branch. Have an enjoyable evening ahead! 2  BIS central bankers’ speeches
Project Meridian9 – our joint initiative with the BIS Innovation Hub London centre – will prototype and test end-to-end flow of synchronised settlement, which could be used for different trades such as securities and foreign exchange. This project will provide meaningful insights to make our RTGS systems more interoperable. The third topic of the consultation is how we can maintain and enhance the resilience of RTGSin light of the rapidly changing environment leveraging technology to enhance resilience. We will consider evolving or replacing our back-up settlement site and enabling CHAPS to act as 4/6  BIS central bankers' speeches  a contingency for critical retail payments. The consultation is an important opportunity for the whole industry to help us shape our long-term roadmap, and to evolve the platform to continue to meet the needs for current and future users. The Bank will decide how to take forward and to prioritise the options in the paper taking into account its public policy objectives and the costs and benefits for industry. How we can work together as an international community The ongoing upgrades to national payments infrastructure can help enable the private sector to deliver improved payment services. But the financial system is global. With cross-border payments set to total £ trillion by 202710, many of the most important issues require collaboration between jurisdictions. We are working closely with our international colleagues to enhance cross-border payments.

1 See for instance Hasan et al (2013)Opens in a new window 2 Pay.UK Monthly UK Payment Statistics December 2021Opens in a new window 3 BIS Quarterly Review, December 2019.Opens in a new window 4 KPMG ‘UK fintech investment soars to $ billion in 2021 – up sevenfold from 2020’Opens in a new window 5 McKinsey Global Payments Report 2021Opens in a new window 6 RTGS Renewal Programme Proof of Concept: Supporting DLT Settlement Models 7 A blueprint for a new RTGS service for the United Kingdom 8 Bank of England: RTGS Renewal 9 BIS Innovation Hub LondonOpens in a new window 10 Global Payments: The Interactive EditionOpens in a new window 11 FSB (2021) Targets for addressing the four challenges of cross-border payments: Final reportOpens in a new  window  6/6  BIS central bankers' speeches
This differs from the March forecast, which assumed a variation between plus and minus 0.5% for the year. For 2024, we expect growth between 1.25% and 2.25%, slightly higher than the range between 1% and 2% forecast in March. For 2025, GDP is projected to expand between 2% and 3%, the same range as in March. In this scenario, the activity gap will turn negative during the second half of 2023 and stay there for several quarters (figure 17). The projection continues to include an adjustment in spending concentrated in its imported component, especially in consumption. Private consumption is expected to continue to shrink this year, falling by 4.9% in 2023, compared with the 3.8% decline projected in March. Going forward, the speed of adjustment of this spending element is expected to be slower than in the first quarter. The projected path for consumption considers that the labor market performance will be consistent with the evolution of the business cycle, including dwindling hiring expectations and a gradual  4  rebound of labor participation. Consumption will be also negatively affected by consumers’ pessimism, tighter credit conditions and a heavier financial burden. The drop in consumption is consistent with a restructuring of household savings, following their massive use in previous years, which is a key factor in the smaller current-account deficit. Private savings already showed a recovery in the first quarter of the year. Going forward, its level will be above those of the past few years.

As for activity and demand, in recent months their evolution has been in line with the forecasts in the March Report. According to National Accounts data for the first quarter, seasonally adjusted, domestic demand fell by 1.5% with respect to the previous quarter, with a drop of 8.0% in an annual comparison. Total GDP and non-mining GDP grew in their seasonally adjusted series, with increases of 0.8% and 1.2%, respectively. This was mainly due to a transitory accounting effect in the transportation sector, which we had already mentioned in the March Report. In annual variation, the two showed a drop of 0.6% (figure 4). By sectors, personal services, restaurants &hotels, and fishery performed well during the first quarter. In contrast, commerce has continued to adjust and construction continues to underperform. The largest downward difference was recorded in the mining sector. On the expenditure side, the main developments were concentrated in consumption. Seasonally adjusted, private consumption fell 2.5% quarter-on-quarter (q/q), a sharper than anticipated fall, mainly explained by the 18.8% q/q decline in durable consumption. Regular consumption continues on a downward trend in goods and an upward trend in services. Government consumption, on the other hand, grew more than we projected (figure 5). In any case, this evolution of private consumption is considered a preview of the decline expected during this year. This is in line with high-frequency information, such as imports of and spending on goods and services (figure 6).
In ASEAN, we are expected to be more integrated as a region arising from economic and financial integration process. It is from this perspective that I would like to expound some ideas on what ought to be the immediate priorities for the industry and the Association. Creation of domestically strong businesses With the foundation laid solidly for the conduct of professional and efficient money services business in the industry, the aspiration is for the creation of a pool of domestically strong and vibrant businesses that are able to compete with the best and expand beyond the Malaysian shores. Such businesses would be characterised by the ability to deliver a strong value proposition; and are committed to offer excellent service to their customers. To achieve this goal, I would like to focus on 3 immediate priorities for the industry: •  Firstly, continuing to nurture a mindset change within individual companies to spur and sustain the progress of the industry;  •  Secondly, putting in place a comprehensive human capital development plan to support strategies for the further advancement; and  •  Thirdly, creating the right incentives and a strong reputation for the constant delivery of high quality and innovative money services. Mindset change We are seeing many positive changes now taking place in the industry. Sustaining this transformation will call for businesses to have a long-term strategic view, the perseverance, willingness and be agile enough to adjust to changes in the operating environment.

Benoît Cœuré: Cyber resilience for pan-European financial market infrastructures Introductory remarks by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the High-Level Meeting on Cyber Resilience, Frankfurt am Main, 19 June 2017. * * *  Introduction It is a pleasure to welcome you here today to this strategic high-level meeting on cyber resilience for pan-European financial market infrastructures. The aim of bringing together high-level representatives from large European market infrastructures, critical service providers and public authorities is threefold: First we would like to gain a deeper understanding of the cyber threat landscape in Europe. The European Union Agency for Network and Information Security (ENISA) will make a presentation on the cyber threat landscape and its relevance for the financial sector. Second, we will share with you the Eurosystem’s cyber strategy for financial market infrastructures and also explain ECB Banking Supervision’s approach to the issue of bank cyber resilience. Third, we would like to hear your views on how we can all collaborate in a trusted environment to enhance the cyber resilience of financial market infrastructures. More specifically, we would like to assess with you how much interest there is in creating a highlevel cyber resilience forum for pan-European financial market infrastructures, critical service providers and competent authorities. Before we start, let me briefly set the scene.
6  BIS Review 33/2004  The “simplified standardised approach”, as we call it, is intended to be useful for those countries that do not wish to adopt all of the options available under the new framework. The trade-off, however, reflects the fact that the policy balance at stake is between simplicity and risk-sensitivity; if one chooses simpler rules, the cost is less sensitivity to risk and hence greater conservatism in capital requirements. 3. Competition and consistency of application. Another broad concern that the Committee has worked to address is Basel II’s impact on global competition. In particular, some have asked whether banks that choose Basel II’s advanced approaches will enjoy benefits over those that choose simpler approaches. Others have wondered whether banks that remain on the 1988 Accord for some time will be disadvantaged. To respond to these concerns, we should understand that adopting an advanced approach does not automatically reduce a bank’s capital requirements. In fact, a more risk sensitive capital framework is intended to align capital requirements more closely to risk. This could mean that capital requirements for an advanced bank may actually rise relative to the current rules if the bank’s exposures are actually riskier than the measures under the 1988 Accord would have suggested. Furthermore some national supervisors may set higher capital requirements than implied by Basel I, perhaps even higher than those implied by Basel II, depending on the risk environment.

For those banks that do experience reductions in capital as a result of Basel II, some observers have questioned whether the lower requirements might provide certain advantages and make it easier for those banks to acquire other banks that do not share in the same benefits. History suggests that this particular concern may be unfounded. In a paper published this past February by the Federal Reserve, researchers reported that they did not find convincing evidence that past changes in capital requirements have had a substantial impact on mergers between banks. The issue of competition between banks has also come up in the context of competition between countries. Here, we should remember that Basel II is intended to help ensure that international competition in banking markets is driven by the strengths of each bank, rather than by differences in each country’s rules. One way that the Committee has sought to promote a consistent application of the new framework is by providing banks and supervisors with detailed requirements where necessary. As I have already mentioned, these details may add to the appearance of length and complexity in Basel II, but that is a small price to pay for greater consistency and a more level playing field. However, given the need to have a framework which can be adapted to a wide range of circumstances, cooperation among supervisors is clearly the most important tool in achieving an appropriate level of consistency.