samchain/econo-pairs-v1 huggingface dataset:
With interest rates close to zero and a high Swiss franc, the minimum exchange rate is still the key monetary policy instrument for the SNB. Our monetary policy decisions have caused the SNB balance sheet to increase considerably. Due to the size of the balance sheet and the uncertainty on the capital markets, annual results are expected to be volatile in the foreseeable future. That is why we cannot provide you with any forecasts of the SNB’s future annual results. We are certainly very aware that the lack of a dividend is painful for many shareholders. However, as you know, the SNB is obliged by constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of the development of the economy. The SNB is required to gear its  1  Overall, illiquid assets totalling USD 38.7 billion were taken over. The funding was as follows: The SNB granted a loan of USD 25.8 billion and UBS provided 10% or USD 3.9 billion in the form of the purchase price for the option to repurchase the stabilisation fund at a later date. The difference between the funds paid into the stabilisation fund and the total sum of transferred assets was made up of contingent liabilities which, at that point, did not require any financing. 2  In 2009, the Confederation sold the equities arising out of the conversion of these notes to institutional investors, thereby ceasing its involvement.

But the crisis has not yet been overcome – which is hardly surprising, since structural reforms are also required if this is to be achieved. It is important to acknowledge the efforts that have already been made in this respect in the affected countries, and as an onlooker one should be cautious when making recommendations. Yet there is broad consensus that additional structural reforms are needed and should be implemented consistently. Such reforms should increase the growth potential of the countries affected and allow them to significantly and sustainably reduce their high level of unemployment and debt. Additional efforts are also required in the banking sector. Consequently, the bank review to be carried out by the ECB is extremely important. Only a healthy banking sector is capable of supplying the economy with sufficient credit. However, risks also exist outside the euro area. The global recovery could be held back by political tension in several regions as well as structural weakness in major emerging economies. A further source of potential turmoil is uncertainty about the future path of monetary policy in the major currency areas. In particular, the divergence in the monetary policy direction could increase. Overall, monetary policy in the advanced economies is likely to remain very expansionary since production capacity is underutilised and inflation is low. But while in the US the Federal Reserve is preparing the ground for a gradual normalisation of monetary policy, the ECB is considering whether it should undertake further monetary policy easing.
Given the famous ‘long and variable lags’ in the transmission of monetary policy, an immediate policy response to the gas price shock could not have prevented some rise in headline inflation.9 In line with its remit, the MPC needed to act to steer inflation back to its 2% target on a sustainable basis, in a difficult environment where the adverse terms of trade impact of higher imported energy prices weighed on domestic real incomes and spending. In doing so, it was crucial that monetary policy was prepared to act to contain so-called second-round effects in price, wage and cost developments, which threaten to impart a self-sustaining momentum to inflation, even as the original impetus to higher inflation from rising gas prices dissipates. By its nature, that more persistent component of inflation would last to the horizons at which monetary policy does have an effect on price developments – it is thus any such persistence in inflation that the MPC (in its recent communication) has flagged as the driver of more ‘forceful’ policy actions. Bank of England  Page 7  This is where the impact of higher gas prices interacts with developments in the labour market. Even as economic activity in the UK has weakened as higher gas prices weighed on household spending power, the labour market has remained tight. The unemployment rate recently reached its lowest level since the mid-1970s. Recruitment difficulties in a tight labour market has supported stronger underlying wage growth.

Bank of England  Page 4  The large portfolio of gilts accumulated as a result of quantitative easing (QE) is being run down: since March, by ceasing to reinvest the proceeds of maturing bonds; and, since the start of this month, by selling gilts back to the market. The language surrounding monetary policy has shifted dramatically: from so-called forward guidance suggesting that Bank rate would remain at its effective lower bound until economic slack had eroded, to a more data-dependent outlook for interest rates reflecting current concerns over the persistence of inflationary pressures.2 This substantial shift has been driven by two factors. Normalisation of the monetary policy stance First, the stance of monetary policy needed to be normalised after more than a decade of exceptional ease, originally established in the face of the global financial crisis and then maintained more-or-less until this time last year. (Of course, the ‘normalisation’ implied here relates to historical norms for the level of Bank Rate and size of the Bank’s balance sheet.) With the failure of Lehman Brothers in 2008, Bank Rate was quickly floored at its effective lower bound, and additional easing was then provided through large-scale asset purchases. The resulting highly supportive overall stance was justified by a combination of downside risks to the inflation target, a weak economic outlook and tensions in the financial system, all of which had emerged in the aftermath of the financial crisis.
In our view, the key issue here is to reduce a possible large swing in the availability and the price of credit stemming from the tendency of banks to underestimate risks in good times, and then to overestimate them in bad times. On this, our approach has been to ensure that banks’ capital and riskmanagement policy is forward-looking by using a combination of three instruments. The first is stress testing to ensure that bank’s own internal process for assessing the adequacy of capital and overall risk management is alert to possible key risks. Thai banks have begun conducting stress tests as part of the supervisory process since early last year when we first underwent the FSAP assessment. From our experience, we find stress testing to be a useful and effective instrument for helping banks in formulating strategy for capital and risk management in a forward-looking manner. Also importantly, it provides a formal process for a two-way dialogue between banks and supervisors on risk management and on other financial stability issues. The second instrument is the fair value accounting rules or IAS 39, which we have adopted for non-performing loans and for structured products. In our view, these rules can help strengthen market discipline over bank lending and investment. And because fair valuation involves marking to market, its adoption also helps make provisioning for asset impairment more forward-looking. The third instrument is prudential policy to limit excessive procyclicality.

Bandid Nijathaworn: Financial globalization and emerging market economies Speech by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the Panel Discussion, Bank of Thailand’s International Symposium 2008, Bangkok, 8 November 2008. *  *  *  First, let me thank the organizer for inviting me to take part in this panel. A lot has been said in the last two days about financial globalization and emerging markets. We spoke about the challenge for monetary policy, the challenge for financial regulation, and the implications for capital flows management, and on this panel, we discuss the importance of having the right international financial architecture to respond to the global challenge. But more important at this time, I think the current global financial turmoil also offers a unique and important perspective for us to look closely at financial globalization, in terms of the inherent risk, the lessons that can be learned, and how emerging markets should go about managing the process of financial globalization. My remarks today will be on the practical challenge faced by emerging market economies like Thailand in managing the process of financial globalization. On this, I will focus on the financial sector and the implications that financial globalization has for the financial sector in emerging markets. A good starting point to discuss the issue is to look first at the lessons that can be learned so far from the current turmoil.
Chile’s economic outlook for 2014 Nevertheless, the changes we have seen in the world macroeconomic scenario have had an impact that exceeded our forecasts of some months ago. Our new projections for 2014 will be released in our upcoming March Monetary Policy Report, but it should come as no surprise that our growth outlook for this year has been corrected downward from December. Private forecasts have already internalized this change. What are the factors behind this? First and foremost, there has been a slowdown in domestic investment, caused by both the abatement of global mining investment cycle and other specific developments. The slowdown in consumption has been more gradual, in line with fundamentals that, although they ceased to improve, are still good. As I said, investment is the one component of expenditure that has endured the biggest adjustments in the past few quarters. One explanation is the deceleration of emerging economies, China mostly, and the impact it has had on commodity prices, particularly metals. The price of our main export – copper – is around $ dollars per pound, compared with a little over $ a year ago and nearly $ in early 2012. In addition, the outlook for future prices has also been revised downward, triggering a postponement of mining investments whose effects spread to other economic sectors. At any rate, what is happening in Chile has been mirrored in other metal exporters, but maybe with a different timing.

There has been a limited pass-through of the peso depreciation in to final prices, but no spillovers in medium-term inflation expectations or nominal wages. Given the recent slowdown of output, we expect some increase in the amount of slack in the  BIS central bankers’ speeches  3  economy that should help to contain second round effects of this transitory inflation shock but we remain vigilant. Monetary policy has turned toward a more expansionary instance. The monetary policy rate (MPR) has been lowered by 100 basis points in recent months to 4%, and the Bank has pointed out in its latest communication that it will assess the possibility of introducing additional cuts according to the evolution of domestic and external macroeconomic conditions and their implications for the inflation outlook. This response of the Chilean economy to the changes in terms of trade and external financial conditions accurately reflects the operation of our policy regime. Over the years, the Central Bank has shown its commitment to take action to safeguard price stability. We have been consistent over time and we have built a credibility record that gives us room to use monetary policy in a counter-cyclical fashion when it is advisable. Our policy framework allows for timely adjustments of the real exchange rate and the interest rate, which provide the right signals to keep the domestic economy growing around potential, smooth the adjustment of the capital account, while inflation and inflationary expectations remains anchored. This makes a difference with our economic history.
Muhammad bin Ibrahim: Developing a safe and secure electronic payment ecosystem to promote financial inclusion Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Regulatory Forum for the Asia Pacific Region: “Developing a Safe and Secure Electronic Payment Ecosystem to Promote Financial Inclusion”, Kuala Lumpur, 4 August 2014. *  *  *  Ladies and gentlemen, it is my pleasure to be here today to deliver the Keynote Speech for MasterCard’s Regulatory Forum for the Asia Pacific region with the theme “Developing a Safe and Secure Electronic Payment Ecosystem to Promote Financial Inclusion”. With 2.5 billion people across the world still unbanked, financial inclusion is a significant global agenda to ensure that all segments of the society, including the most vulnerable groups, have access and usage of quality and affordable financial services. This forum, which brings together regulators, international financial institutions and other payment system stakeholders, is an important platform to surface and exchange ideas on emerging trends, risks and opportunities in the use of cost-effective electronic payment system to drive financial inclusion. Over the years, Bank Negara Malaysia has taken many measures in promoting financial inclusion and in accelerating the country’s migration to electronic payments (e-payments). I will share some of my thoughts on the key areas in the payment value chain that could drive and expand the financial inclusion agenda via e-payments.

The same systems that allow international trades to be conducted from a hub are also conduits by which volatility is transmitted globally. For the risk to be satisfactorily managed, collaboration is necessary. Regulatory collaboration can take many forms. It begins from interaction on occasions such as this, which represents an opportunity to compare notes, discuss issues and exchange views. Such informal but regular contact should not be discounted. Indeed, I understand from my colleagues that a series of telephone conversations and e-mails with regulatory counterparts elsewhere in the aftermath of Sep 11 contributed considerably to a quick appreciation of the type, and magnitude, of issues that could be expected. This contributed to the avoidance of instability in individual markets. Looking back, we can all agree the markets stood up remarkably well. International meetings and joint forums such as IOSCO are a further step towards setting the foundation for more structured lines of communication amongst regulators. Participation in IOSCO taskforces requires resources but helps to develop better appreciation of characteristics unique in other markets, and alternative approaches to addressing regulatory concerns. It is in recognition of this that MAS has devoted resources to active participation in IOSCO’s committees and working groups. We have also found the Memorandum of Understanding (“MOU”) to be a useful instrument for setting out mutually agreed procedures by which regulators may exchange information and provide mutual assistance.
This confidence is still – looking back in a long-term historical perspective – a relatively new element of the Swedish economy. The fact that shocks have been so common in the supply side of the economy in recent years has also made it more important to clarify our view of how monetary policy should deal with the trade offs that then arise. Events have included price effects from mad cows and shocks on energy markets as well as unexpected shifts in productivity. I do not wish to comment on whether supply shocks have in general been more frequent in recent years, but developments have nevertheless made it clear that changes in inflation that are not primarily due to traditional cyclical fluctuations are something that monetary policy has to face regularly, not merely in exceptional cases. The clarification from 1999 can be regarded as one step on the path towards more nuanced inflation targeting. At that time there was a fairly indirect discussion of the need to consider real economic developments. The argument was that monetary policy did not need to try to parry temporary price shocks. The fact that the Riksbank worked with a two-year perspective was then justified by the fact that monetary policy’s impact comes after a time lag. In the description of our method of working I have just given, I emphasised that monetary policy in the short run often concerns trade offs between stabilising inflation and the real economy.

Some advocate that the Riksbank should be clearer than it is now with regard to what is considered a desirable path for the real economy over the coming years. I wish to point out here that the discussion on real economy considerations taken in monetary policy does not mean that we should supplement our price stability target with a growth target. This may be a semantic issue for some people; what is the difference between consideration and a target. To speak in general terms of a target for the real economy would send the wrong signals. The Riksbank has a statutory objective for monetary policy and that is to maintain price stability. In addition, we attempt to set the interest rate in such a way that monetary policy – given the price stability target – contributes to subduing short-term fluctuations in the real economy. There is no reason to change this. It is a precarious task to try to quantify what level can be considered normal for capacity utilisation. Estimates of the output gap - that is, the difference between actual output and equilibrium output – can vary considerably depending on what method is used. This means, for instance, that attempts to estimate the amount of spare resources on the basis of an analysis of the labour market can provide an entirely different picture than when only GDP data are used to calculate the output gap.
It meets in Washington, D.C., eight times per year to deliberate and vote on monetary policy, that is – should we change interest rates and, if so, how much. As the current New York Fed president, I am vice chairman at these meetings. At these meetings, each committee member presents his or her current outlook for the economy. For these assessments, we augment input from our research departments with critical information about local economic conditions supplied by our boards of directors, regional advisory councils and conversations with local stakeholders. My visit to New Paltz today is a part of these regional activities in which I learn first-hand about the economic and financial conditions important to you. One thing that makes my job even more interesting is that New York has some roles unique within the Fed. For example, the New York Fed is the Reserve Bank charged with implementing monetary policy. This means that at the direction of the FOMC, we buy and sell Treasury securities in order to adjust short-term interest rates. We are also the eyes and ears of the Fed on Wall Street, and we supervise many of the largest financial institutions in the country. We operate Fedwire® – the conduit for large money transfers between banks. And, we provide banking services to the U.S. Treasury, and central banks and governments from around the world. At the regional level, we continually track economic conditions in our District with the help of a number of tools that we have created for this purpose.

I will now be happy to answer some questions. 6  BIS central bankers’ speeches
For instance, when I look at the negative growth of the last quarter – minus 1.2 per cent in France – one comforting aspect was that three-quarters of the decline was due to a reduction in  4  BIS Review 29/2009  inventories. So that was of course much better for the future because it means that once the inventories are back to the required level, to the level that corporates want to have, production starts up. So it is difficult to comment without seeing all the explanations. For the time being I have the feeling that our situation will be relatively, slightly better than that of some of our neighbour countries. What was one of our weaknesses in the past – that is a strong reliance on domestic demand and domestic consumption for growth, and certain weakness in net exports – has become a strength in the downturn. Exports have fallen, like in Germany, but their weight in GDP is much lower, so that it has hit the economy less. The consumer spending trend has remained positive. Compared to countries like Spain or the UK the average indebtedness of households was lower, so that the effect of the turmoil on consumer spending has been also relatively lower than in other countries. For all these reasons we felt that we had some slightly better resilience, but we must remain prudent. FT: Should Germany do more in terms of fiscal stimulus? CN: I think that they have decided on a second package that is sizable.

Big data has brought us tools and techniques that can be applied to rapidly process large sets of traditional data too. This makes it much easier for us to realise projects like MMSR and AnaCredit and helps us to keep pace with an ever-changing world. AnaCredit, for instance, involves immense sets of extremely granular data, reflecting the far greater complexity and interconnectedness of today’s economy. To understand this complexity and assess the interconnections, we need a very detailed view. And this is exactly what AnaCredit gives us. Thanks to the granular data it provides, we will be better able to understand what is driving credit growth, making it easier to know whether such growth is healthy or not. MMSR, on the other hand, is about speed: money markets move fast and never stop. So taking a snapshot every now and then does not suffice. We need much faster data, and that’s what MMSR provides. It allows us to constantly assess who lends how much money to whom in the money market and at what rates. This gives us a very clear and quick picture of how the market is structured, how exposed players are to one another and how vulnerable they are. And MMSR helps us to keep pace in other ways too. Look at the important role benchmark rates play. They provide anchors for contracts in financial markets and are important for the 3/4  BIS central bankers' speeches  transmission of monetary policy.