samchain/econo-pairs-v1 huggingface dataset:
Another essential change made in Central Bank law was the prohibition of advances and credits to the Treasury and public institutions and establishments. As is known, public expenditures can be financed through collecting taxes, privatization, borrowing from domestic and foreign markets or Central Bank’s resources. Financing through Central Bank resources may cause inflationist pressures due to increases in ‘fiduciary’ supply. Therefore conducting monetary policy independently and preventing the use of Central Bank resources in public financing are significant factors for removing this effect. It is not a coincidence that in our country inflation followed a declining trend after November 2001, when the provision of public credit was prohibited. It has since dropped to single digit figures after 30 years. Another contributory factor to be mentioned in the process of fighting inflation is the communication policy of the Central Bank. The significance of efficient communication is undeniable in reducing ambiguity and increasing reliability by making Central Bank policies understandable, assessable and predictable. Since 2001, the Central Bank has placed communication policy at the core of its policies;  4  BIS Review 36/2005  and consequently adopted an efficient policy, sharing all knowledge and forecasts with the public and explained its policies clearly throughout the country. I think efficient communication is highly important in terms of the point we have reached today. Besides central bank independence and communication strategies, the tight fiscal and monetary policies implemented are two other important factors in the fight against inflation.

On the contrary, overseers and regulators in future years need to increase their efforts towards ensuring safer and more secure market infrastructures and also to further strengthen EU market infrastructures. I have highlighted three specific areas for enhancement. First, the general crisis management arrangements, particularly on disseminating information and increasing awareness about default arrangements of market infrastructures. Second, measures for building market infrastructures for OTC derivatives, also in the euro area. And third – as in the case of large value payment systems – the need for a more integrated and harmonised retail payments structure. Therefore, I regard continued full support from all stakeholders for the effective and timely implementation of the Single Euro Payments Area as a key priority for the period ahead. Thank you for your attention. BIS Review 74/2009  5  ANNEX I: Charts Chart 1 Values settled in TARGET per time band  Chart 2 Evolution of the limits on the SSP  Chart 3 Non-settled payments on the SSP  6  BIS Review 74/2009
The fiscal rules have provided a framework for assessing fiscal policies but have at times proven difficult to enforce and hard to explain to the public. In the area of structural policies, the Country Specific Recommendations have had a limited impact, with less than 10% of recommendations [33] 5 / 10  BIS central bankers' speeches  being substantially implemented each year. [33] The disparity between the outcomes of the two methods does not stem from any difference in the quality of European and national authorities. Instead, it is a consequence of the inherent difference between rules and institutions. There are two reasons why institutions have proven superior. First, rules are generally static and require countries to adhere to specific actions, whereas institutions are required to achieve prescribed objectives. Rules therefore cannot be updated quickly when unforeseen circumstances arise, whereas institutions can be dynamic and employ flexibility in their approaches. That distinction matters hugely when underlying parameters and economic relationships change – as they often do. The distinction also matters for citizens, who ultimately care most about the results of economic policy rather than the actions taken by governments. The ECB’s monetary policy during the crisis is an example of the greater flexibility of action afforded by an institution-based approach. The ECB was faced with a range of challenges that few could have predicted when our mandate was defined. But the Treaty combines our mandate for price stability with discretion over the tools we could use to achieve it.

Europe has profited a great deal from this integration: it is estimated that the Single Market raises GDP in the EU by around 9%, taking into account both the direct trade and competition effects. [7] But as countries become more interlinked, they also become more exposed to volatile capital flows, unfair competition or discriminatory actions – and this necessitates greater protection for their citizens. That protection, which EU countries have created together, has allowed them to garner the benefits of openness while limiting, to some extent, its costs. The EU’s common structures and institutions contain spillovers, ensure a level playing field and prevent unjust behaviour – in other words, they respond to the needs of citizens and allow countries to exercise sovereignty. Thus the Council and the European Parliament set common rules for the whole EU, the Commission ensures they are observed, and the European Court of Justice (ECJ) provides for judicial protection if they are violated. In the euro area, European banking supervision and the Single Resolution Mechanism help to contain the effects of financial instability. In this interconnected environment, seeking independence from EU institutions presents complex trade-offs. Countries either have to accept rules decided by others to ensure continued access to the European market, which gives them less control over decisions that affect their citizens’ interests; or they have to disentwine themselves from their most important trading partners, which gives them less control over their citizens’ welfare.
In this way, unemployment can be taken up in production, capacity utilisation increase and inflation be adjusted upwards to the target. In the same way, the interest rate needs to be above its neutral position, when capacity utilisation is full and demand is tending to grow more quickly than the utilisation of capacity. The economy then needs to be cooled down to prevent inflation exceeding the target. It is the task of monetary policy to control short interest rates so that demand pressure is adjusted to capacity growth to achieve the inflation target. The growth in capacity in the long-term is determined by other factors, however, than monetary policy. The level of the neutral interest rate varies over time. According to some theories on optimality, a very rough rule of thumb is that the neutral real interest rate in the long term and when the economy is in balance is near the long-term growth of GDP. In Germany, real short-term interest rates have since 1980s been around 3.3% while the corresponding rates in the USA are around 3.5%. While it is not possible to specify a neutral level for Swedish interest rates, there is no doubt that monetary policy even after last week’s increase will continue to have an expansive effect on demand. BIS Review 126/1999  4  In practice, monetary policy decisions are based on an overall assessment of a number of inflation indicators.

I have no doubt about the parties’ insight into the importance of the inflation target for wage formation in general. However, most agreements expire next year. It has proven during the autumn that the majority of the teacher training places in the sciences and mathematics are vacant. This is not so strange since a person who can successfully study mathematics and physics at university can also become a graduate engineer or industrialist scientist. Initial salaries between a graduate engineer and a science teacher differ by SEK3-4,000. Salaries for a competent engineer have no ceiling while for a teacher the top salary is not much above SEK20,000. Teachers have not been slow to make use of the scarcity of certain categories of teachers to demand 15% more than all other groups over a 5-year period, despite there not being a shortage of all categories of teachers. This has naturally led to protest from the Swedish Trade Union Confederation. 3  BIS Review 126/1999  If this type of imbalance cannot be dealt with by the union organisations and employers without a general scramble for pay increases, the Riksbank will be confronted by the unpleasant task of constraining the economy in order to prevent excessively high wage increases having an impact on inflation. The low inflation policy may therefore be said to be confronted by a test: the labour market is improving with falling unemployment and increasing capacity use otherwise.
3 Junker, J.-C., Tusk, D., Dijsselbloem, J., Draghi, M. and M. Schulz, (2015), “Completing Europe’s Economic and  Monetary Union”, European Commission, Brussels. 4 See, e.g. Gordon, R. (2016) “The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil  War”, Princeton University Press. 5 Constâncio, V., (2016), “The challenge of low real interest rates for monetary policy”, Lecture by Vítor Constâncio,  Vice-President of the ECB, Macroeconomics Symposium at Utrecht School of Economics, 15 June 2016. 6 Inflation as a global phenomenon has been documented e.g. by M. Ciccarelli and B. Mojon (2010), “Global  Inflation”, The Review of Economics and Statistics, 92:524-535, although there is less evidence of the phenomenon in developing countries: Parker, M (2016) “Global inflation: the role of food, housing and energy prices”, RBNZ Discussion Paper 2016/05. Measures of global economic slack are good predictors of national inflation in advanced countries, as shown empirically e.g. by C. Borio and A. Filardo (2007), “Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation” BIS WP no. 227; and in New Keynesian open economy models e.g. by R. Clarida, J. Gali, and M. Gertler, (2002) “A Simple Framework for International Monetary Policy Analysis,” Journal of Monetary Economics 49: 879–904. 7 IMF (2013), “The dog that didn’t bark: has inflation been muzzled or was it sleeping?”, World Economic Outlook,  April. 8 Mersch, Y. (2016) “Bares bleibt Wahres”, Spiegel Online. 7/7  BIS central bankers' speeches

has noted that climate change may result in physical and transition risks that could impact the 1/2  BIS central bankers' speeches  safety and soundness of individual financial institutions and have broader financial stability implications for the banking system. In response, the Committee established the TFCR to undertake work on climate-related financial risks in February of 2020. I am acting as a co-chair of the Task Force, along with Frank Elderson, Executive Director of Supervision at the Netherlands Bank. In the first phase of work, the TFCR conducted a stock-take of members’ existing regulatory and supervisory initiatives on climate-related financial risks.3 This work highlighted the increasing focus on climate-related risks. To take the work forward, the TFCR is following a gradual and sequential approach from a banking supervisory perspective with a current focus on understanding climate risk transmission channels, as well as methodologies for measuring and assessing these risks. The TFCR plans to complete these fundamental research initiatives by mid-2021. Building on this analytical work, the TFCR will then consider the extent to which climate-related financial risks are incorporated in the existing Basel Framework and identify effective supervisory practices to mitigate such risks. The TFCR does not currently have a view on potential prudential treatments or supervisory expectations related to the mitigation of climate-related financial risks.
And so when exchange rates move sharply, which they do, the currency mismatch results in large losses. 12. But I suppose we all learn from mistakes. We in Hong Kong did so the hard way in the early 1980s when the situation was compounded by uncertainties about the political future of BIS Review 115/1997  -3-  Hong Kong. We had our currency crisis in 1983, after nine years of operating with a floating exchange rate, against volatile capital flows, without any effective mechanism for monetary management or currency anchor. Our banks had been overly exposed to credit, maturity and currency risks, and a total of seven banks had to be rescued directly or indirectly through the use of public funds. In short, we had been complacent. 13. But, thankfully, never have we been in any doubt about the need to maintain free and open markets, and a liberal financial system. The correct response to financial turmoil is not to resort to controls or to apportion blame, but to put one’s own house in order, and ensure that one is in a position to cope. This we did through a series of reform measures to strengthen our monetary and financial systems implemented in the past ten years. This was, in part, also spurred by the desire to minimize the risk of possible financial disturbance ahead of and through political transition, and to provide the environment for Hong Kong’s continuing development as an international financial centre, as required under the Basic Law.

The case of the Italian banks has illustrated just how complex it is to combine the resolution regime laid down in the Bank Recovery and Resolution Directive (BRRD) with the State aid framework for orderly liquidation. In addition, confidence in the Single Resolution Fund (SRF) and its capacity to intervene has to be bolstered. The setting-up of a common backstop, as mentioned in the European Commission’s communication of 11 October, is a promising avenue, which could take the form of a credit line granted by the ESM. Furthermore, the issue of the liquidity of the newly resolved entities – mainly the “good banks” – is not sufficiently clearly addressed: liquidity support by public sources beyond what can legitimately be expected from the Eurosystem should be clarified. Second, consistency in the legal framework and requirements: faced with the accumulation of new and “separate” requirements, we need to adopt a holistic and consistent approach in order to avoid a prudential overload. In particular, the TLAC requirement resulting from the new international framework requires a consistent adaptation of the European minimum requirement for own funds and eligible liabilities (MREL). In the same vein, the consequences of an internationally-agreed Basel III package – if and when it comes – should be carefully taken into account, as it would lead to increased risk-weighted assets, which will in turn impact the MREL.
One danger of such developments is that, in the face of a prolonged period of low interest rates, asset managers might be tempted to chase “tail-risks”. This calls both for more market discipline in the form of better monitoring and disclosure of the risks borne by financial institutions and possibly by investors, and for a close supervision of these institutions. Demographic shifts are a key factor in the equation of the future world economy. They are key for economic activity, the fiscal stance, and, maybe less obviously, for the monetary policy stance, given their impact on output gap and financial stability. That is why I found the topic of this session particularly appropriate and timely, and I am sure that your discussions will bring very interesting insights. 2  BIS central bankers’ speeches

It is well known that the process of transition will entail two types of risks to the financial system: (i) on the one hand, the physical risks caused by the direct effects of climate change, as a result of the gradual increase in temperature, or more frequent or more severe climate events such as storms, flooding or natural disasters; (ii) on the other, the transition risks, which refer to the potential effect on specific bank borrowers of the regulatory measures aimed at sustainably transforming the economy, technological changes, and changes in customer behaviour and preferences driven by greater environmental awareness. This leads me to the second element: the contribution of banks to the transition of the economy. Of course, if banks incorporate climate-related risks into costs and capital, they indirectly become “facilitators” of change, by reducing the cost of financing of activities that 3/5  contribute most to the sustainable transformation of the economy, while at the same time discouraging more polluting activities. At the same time, we should stress that the change of production model will also entail opportunities for economic agents, which banks and companies should seize. By way of example, to achieve the EU's 2030 targets agreed in Paris, it is estimated that, for the EU as a whole, there is a need to fill an investment gap estimated at 260 billion EUR per year.
HICP inflation excluding energy, which is a measure of the underlying inflation rate, was 1.0 per cent in July. In the euro area, too, the underlying inflation rate measured in this way has been relatively stable in recent years and declined considerably less than HICP inflation over the past year (see Figure 10). Rest of the world We are forecasting better growth for emerging markets and developing countries outside of the OECD than for the OECD countries. This view is supported by the IMF's most recent update to its World Economic Outlook. The IMF writes that the global economy is beginning to pull out of the recession, but that the stabilisation is uneven between different regions and that the recovery will be sluggish. The IMF, for example, is forecasting strong growth in China and India both this year and next year (see Figure 11). However, the economies in Russia and Brazil are expected to shrink this year and then grow again next year. 4  3  Monetary Policy Report to the Congress, July 21, 2009, Board of Governors of the Federal Reserve System. 4  See the World Economic Outlook update, 8 July, 2009, IMF, http://www.imf.org/external/pubs/ft/weo/2009/update/02/pdf/0709.pdf. BIS Review 98/2009  3  The OECD’s leading economic indicators for June paint a slightly brighter picture and indicate that economic developments have shown a turnaround during the first half of this year in all of the “BRIC” countries: Brazil, Russia, India and China.

Our forecast is that the surplus this year will correspond to around 7 per cent of GDP this year, despite exports being expected to fall by around 16 per cent. One reason for the large surplus in the current account is that exports have developed strongly since the early 1990s. At that time exports corresponded to around 30 per cent of GDP, but now the figure is around 50 per cent of GDP. This means at the same time that exports are very important to the Swedish economy and that the weak economic growth abroad therefore hits Sweden particularly hard. New information during the summer points to a slight improvement To summarise, the new information received during the summer tends to point to a slightly stronger economic activity than we had forecast at the beginning of July. GDP was three tenths of a percentage point better and employment fell two tenths of a percentage point less than we had forecast. A number of indicators have also exceeded market expectations. All in all, this supports the view we had that the deep economic recession has bottomed out. However, most indications are still that the recovery will be weak. Inflation fell slightly more than we had anticipated in July, but underlying inflation was in line with our forecasts. However, we will not make an overall assessment of economic developments until it is time for our next monetary policy decision on 2 September.
Such caution holds back spending below the levels of our productive capacity. For example, I regularly hear from business contacts that they do not want to risk hiring new workers until they actually see an uptick in demand for their products. Most businesses do not appear to be cutting back further at the moment, but they would rather sit on cash than take the risk of further expansion. 1  Real GDP fell about 5 percent during the recession, and growth has averaged about a 2-1/2 percent annual rate so far in the recovery. (The number in the text was based on the difference between actual and potential real GDP as calculated by the Congressional Budget Office through 2011:Q2.) BIS central bankers’ speeches  1  Considering the substantial lost wealth that came with the Second Great Contraction and the enormous uncertainty over the recovery today, it is understandable why households, businesses and market participants are exceedingly cautious. We seem to be following the tendency, documented by Carmen Reinhart and Kenneth Rogoff, that recoveries from economic downturns caused by large financial crises usually are painfully slow. Accordingly, it is of the utmost importance for monetary policymakers to respond appropriately. Recently, many critics of the Fed’s actions have raised concerns about the credibility of Fed policy. Credibility – that is, the general belief that the Fed does what it can to achieve its mandated policy objectives – is certainly a critical issue. Defining “credibility” sounds easy, but there are several aspects to credibility.

As in the 1930s, today’s low Treasury interest rates in good part reflect elevated demand for low-risk assets – we see investors run to U.S. Treasury markets every time they hear any bad economic news from anywhere in the world. Consider another metric for interest rates, the well-known Taylor  4  BIS central bankers’ speeches  Rule, which captures how monetary policy typically adjusts to output gaps and deviations in inflation from target. Its prescriptions would call for the federal funds rates to be something like –3.6 percent now, well below the zero lower bound the funds rate is currently stuck at. Our large-scale asset purchases have provided additional stimulus, but by most estimates not enough to bring us down to the Taylor Rule prescriptions. Also, I should note that in 1998, Friedman gave a similar recommendation to the Japanese, advocating that the Bank of Japan undertake more accommodation by buying government bonds on the open market. Other critics raise the specter of 1970s-like structural changes in the economy. Such changes, they argue, have reduced our productive potential, in particular the mechanisms by which resources – most notably labor – move from declining to expanding sectors of the economy.3 I am acutely aware of the costs of making such an error. No central banker wants to repeat the painful experiences of the 1979–83 period.
carry trade) and instead incentivize them to focus on their core activities. 4  BIS central bankers’ speeches

Another untapped segment of the market is the takaful sector in view of the fact that Muslims constitute more than 40% of the population in ASEAN, mainly in Malaysia , Indonesia and Brunei . Globally, the Muslim population accounts for about 24% of the total population. This has supported the growth of the takaful market in recent years as an alternative to  2  BIS Review 134/2007  conventional insurance. The global takaful market is expected to grow between 15 and 20 per cent per annum. Based on the market penetration level which is at 6.8% in Malaysia and less than 5% in many Muslim countries, this represents significant market potential for the future growth of takaful business. The expansion of insurance markets in ASEAN will need to be reinforced by further consumer education to increase awareness among the public on the importance of longterm financial planning as well as to equip them to evaluate product features and make informed decisions. The insurers must recognise that it is an important responsibility on their part not just to ensure that adequate information is provided to the consumers, but that consumers are suitably advised in the sales process. This includes ensuring that information about insurance products is presented in a manner that is meaningful and easily understood by consumers. This distinction between quantity and quality is important.