samchain/econo-pairs-v1 huggingface dataset:
Potential drawbacks of the new framework on a small open economy  But would the introduction of the euro be only good news for the Swiss economy? We know that a revolution is always associated with risks and uncertainties, thus it should not surprise you that we were very much concerned about possible negative developments. In the mid-1990s, as the European monetary construction was under way, we tried to imagine the potential negative effects of the euro introduction on the Swiss economy. Our goal was to be prepared to face difficult situations. We had identified three main challenges: a)  First, the major risk was that the new European currency would destabilize the Swiss franc. In the past, the Swiss franc, along with the German mark, played the role of a safe haven currency whenever monetary crises occurred. With the disappearance of the German currency, the Swiss franc would find itself first in line of fire in case of a dollar crisis, for example, or even worse, in case of doubts about the stability of the European currency. b)  Second, we risked seeing the euro being increasingly used as a means of payment in Switzerland. As the common currency was about to become the main unit of account for our exports, we feared that domestic firms might adopt the euro as well, so as to minimize exchange rate risks. Some were even considering wages being paid in euro.

Indeed, our recent experience has shown impressive convergence between Switzerland and the EU in monetary matters. The inflation differential has decreased and interest rates have moved closer. But we are still far from a monetary integration. On the contrary, the Swiss National Bank has been able to operate more freely since the introduction of the euro than before. BIS Review 70/2004  3  Thanks to a much more stable monetary landscape in Europe, the Swiss franc is today much less under speculative pressure than before. Our currency has still its international dimension, but it sticks closer to economic fundamentals, which is good news for our exporters. It also means that the exchange rate volatility between the franc and the euro is today less pronounced than the volatility we observed in the past between the franc and the German mark. Clearly the franc belongs to the family of the European currencies, reacting similarly vis-à-vis dollar fluctuations. In that sense, for sure, the franc and the euro are sister currencies. 4  BIS Review 70/2004
I will provide you with an overview of the Eurosystem monetary policy strategy (part 1) and then will assess its main achievements (part 2). PART 1:  The main features of the Eurosystem monetary policy  Let us see what the main features of the single monetary policy, conducted by the Eurosystem, are in terms of institutional and operational framework as well as on strategic issues themselves. BIS Review 113/2007  1  The institutional and operational framework is founded on modern concepts Let me recall first that over the past decade, a large body of literature has been devoted to questions surrounding central bank independence, the concepts of transparency and monetary strategies, and the communication of monetary policy decisions. Drawing on this analytical expertise and the experience of the national central banks of the participating countries, the Eurosystem is first and foremost based on a modern institutional framework, founded on the principles of independence, transparency and accountability and, lastly, operational decentralisation. 1. The independence of the Eurosystem fosters price stability  The Eurosystem’s primary objective, as enshrined in the Maastricht Treaty, is to achieve and maintain price stability. As many empirical studies have shown, a country’s ability to fight inflation appears very closely correlated to the degree of independence of its central bank. The independence of the European Central Bank and the 13 national central banks of the Member States of the euro area is therefore anchored in the Treaty.

It also provides credit for long maturities (with a 3-month maturity);  -  procedures guaranteeing a high level of security for all interbank transactions and large-value payments within the euro area and with other countries in the European Union, with in particular the TARGET system, which played a predominant role in the integration process of the euro money market. 2. The strategic framework also contributes to the efficiency of the single monetary policy  From the outset, there was a consensus among the designers of the Eurosystem that the Single monetary policy would require a clear strategic framework. This framework can be characterised by two main principles: a quantitative definition of price stability and a mediumterm orientation of monetary policy. The quantitative definition of price stability has been clarified after five years of experience The definition adopted by the ECB’s Governing Council in October 1998 was confirmed and clarified in May 2003 following an in-depth review of its strategic framework by the Eurosystem. In the wake of this assessment exercise, the Governing Council specified that price stability was defined as an annual increase in the HICP close to, but below, 2% over the medium term. Several remarks should complement this definition: -  by specifying that inflation should be close to 2%, the Governing Council intended first of all to confirm the symmetrical nature of its strategy by ruling out situations of deflation.
Mr. George gives a central banker’s response to the Asian crisis Speech by the Governor of the Bank of England, Mr. E.A.J. George, at the Foreign and Colonial Emerging Markets Conference, in London, on 28/5/98. Thank you, Mr Chairman. I’m delighted to participate in this Emerging Markets Conference, sharing the platform with such distinguished company. I am particularly pleased to be joined in this session by Guillermo Ortiz - my colleague from the Bank of Mexico. The particular examination question which you set me is: “How did an OECD central banker respond to the Asian crisis?”. I have to confess that it’s a somewhat embarrassing question. If I’m brutally honest I have to acknowledge that I didn’t see it coming; I played a modest role in helping to contain its immediate impact on global financial stability; and I’m still struggling to understand its implications, in terms both of its economic after-effects, and of the lessons we must all learn to reduce the risks in the future. I would only plead in mitigation, your honour, that I was by no means alone in all of that; and I beg leave to join in my defence all my central banking colleagues, governments and Finance Ministry officials, in Asia and elsewhere, the international financial institutions, and the world’s financial markets. The storm last year in Asia struck essentially the ASEAN four - Thailand, the Philippines, Malaysia and Indonesia - spreading subsequently to South Korea and intermittently battering Hong Kong and elsewhere.

Where a country has transparently been pursuing an unsustainable macro-economic policy, most people find it easy to accept that that country should bear the burden and adjust, painful though that may be. Many people find this harder to accept where, as in the present case, conventional macro-economic policies had, for the most part, been relatively responsible. There were certainly adjustments to macro-economic policy that needed to be made - a more flexible exchange rate regime in some cases, for example, or a somewhat tighter overall macro-economic stance, with perhaps some adjustment between fiscal and monetary policy. And, once the capital outflow had started, macro-economic adjustment had to be harsher than might otherwise have been necessary, in order to re-establish confidence. But there are real dangers in extreme market movements or in excessively severe macro-economic adjustment to contain them. The political and social consequences are all too apparent in parts of Asia; but even without that there is a danger of a vicious circle of domestic default and systemic financial weakness in the affected country. And that could have seriously adverse implications - in terms of both financial and economic knock-on-effects - for the global economy. That, essentially, is why it may be in the self-interest of the international community to attempt to mitigate the market and macro-economic adjustment pressures by providing financial support.
For instance, many countries (the UK, the Scandinavian countries, many Asian countries, such as China, South Korea, Singapore, and India) have realized that the future economic success will strongly depend on the ability of a country to provide innovative solutions and offer products and services of high value added. Thus, their system of education is being adjusted to those needs. For example in 2003, the number of American patents obtained by companies from the five largest developing countries was 3,900, against 166,000 and 59,000 patents obtained by Japanese and German companies, respectively. In 2002, Polish companies filed 123 patent applications and were granted 11 patents. According to the present forecasts, starting from 2010 the annual number of graduates from engineering, technical, mathematical and related faculties in China will reach ca. 800,000, and in India – about 600,000, 2 which will jointly exceed the number of graduates from American colleges by twelve-fold. As early as now, IT companies, pharmaceutical and many other industries are launching or extending their research centres in Asia, not only with the aim of optimising their research costs, but also to gain access to the fast-growing army of highly qualified experts. Hence, a snowballing increase in the number of patents registered by companies from the developing countries, mostly in Asia, may be expected in the forthcoming years. It has been observed in many countries that the public sector itself must become a source of innovation as well as must actively support e.g.

Krzysztof Rybiński: Global labour market and its limitations – reasons and effects of the emergence of homo sapiens globalus Address by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the debate: “WORKERS 2020 – a vision of the labour market and the labour environment in the forthcoming decades”, Gdańsk, 10 June 2006. *  *  *  Ladies and Gentlemen, The question about the symbol of the global labour market would most probably be answered by a majority of the Europeans with the words: “the Polish plumber”. In France, the Polish plumber has become the key culprit of the rejection of the European Constitution, with the French media showing the Polish plumber on his quest for depriving the hard-working French plumbers of their work. At the same time, the data of the French society of plumbers show that there were 140 Polish plumbers working in France at that time, with 6000 plumber jobs still remaining vacant in the country. 1 This example demonstrates how many false preconceptions concerning globalization are embedded in the media and in the public opinion. In the recent years, the process of globalization has been broadly based across all the markets: the financial market, the capital market, the market of products, services, knowledge, and the labour market. In many countries, the opportunities and threats related to the process of globalization have been observed early and their economic policy has been adjusted accordingly.
The central bank of the Netherlands – De Nederlandsche Bank – has developed new approaches for the supervision of corporate culture and decisionmaking. 21  The MPG is working with the BIS FXWG to develop market-based adherence mechanisms for the FX Global Code. 6  BIS central bankers’ speeches  of market participants as we develop best practices. This is to ensure that the practices reflect all relevant segments of the market and to promote buy-in and thus foster their adoption. As I mentioned before, both the TMPG and the FXC are expanding their membership such that a range of market participants feels vested in their missions. In addition, we engage with other sectors of the marketplace, such as trade associations and infrastructure providers, to educate them about best practices that have been developed and facilitate their potential adoption of aspects of them. When central banks operate in the markets ourselves, we expect the best practices to apply. This has two aspects. First, we align our own practices to the best practices, except where it would inhibit our policy functions. As a corollary, we expect those institutions that choose to become our counterparties to comply with the best practices as well, so that when we transact, we do so with the confidence that our counterparties are adhering to these standards of behavior. Finally, we keep supervisors, regulators and other official sector bodies, inside and outside our four walls, abreast of the work of our committees.

In this context, it is opportune time for Sri Lanka to consider the need for the enactment of a law comparable to the applicable laws in other countries and the preparation of guidelines for industrial restructuring in Sri Lanka. Recognising the need, the Central Bank has set up a committee to review the laws for recovery of loans applicable to banking institutions. The committee comprises representatives of all relevant sectors and it is working towards arriving at a consensus on debt recovery proposals. In the meantime, the Business Recovery and Insolvency Practitioners Association of Sri Lanka (BRIPASL) has had a series of discussions and formulated draft legislation for the revival of sick industries. I appreciate the co-ordination between the two committees and their efforts in arranging this important workshop. I understand that the Keynote Speaker today, Mr. Sumant Batra from India who has acquired wide knowledge on restructuring of sick industries in India would elaborate his experience on corporate turn-around and insolvency, and respond to similar proposals that would be made at this workshop. I am confident that the eminent speakers from various fields who are present at this forum, would provide an opportunity to the distinguished participants to share and rationalize ideas, thus ensuring the formulation of sound principles to be incorporated in the draft legislation on the restructuring of sick industries. A comprehensive law on this aspect would help enterprises to become viable in the medium to long term while enabling the banks to recover the debt and be viable financial institutions.
While these and other examples suggest that, in certain conditions, volatility can be exacerbated by option-driven or option-like trading strategies, related developments in global capital markets can at times help to dampen volatility. Notably, with the growth of the hedge fund industry, there are more short-term traders willing to take risk – in effect providing liquidity – when they perceive a temporary anomaly, as perhaps happened in the US bond market during summer 2003. That is somewhat less likely, though, when the prior trading strategies of funds themselves have become part of the underlying imbalance. This points up a useful lesson. That the major intermediaries – and the authorities – would do well to try to identify where there might be big structural short, or imbalanced, option positions in a market whose liquidity might be strained in stressed conditions. Sometimes, as for example in the US mortgage market, this amounts to identifying a structurally long position and asking whether the counterpart short positions are well distributed and how managed. Sometimes, as perhaps in the structured credit market, it may amount to asking whether there is anything that could trigger an exit by apparently long-term and passive holders of short option positions. For the firms themselves, this kind of analysis may be something that could be fed into stress tests developed in recent years to examine the effects of the exit of a dealer or major fund. Central banks rely largely on market intelligence.

One of the most interesting can potentially arise when a particular market is characterised by traders who are structurally short options, have short holding periods, and are leveraged; and where the underlying markets are not highly liquid. That needs a bit of unpacking. Options can, of course, be hedged with an offsetting position in a similar option: a so-called ‘static hedge’. Where, for one reason or another, traders cannot do that, they can attempt to hedge by running a position in the underlying instrument, with the intent that gains or losses on the value of their option positions will be offset by losses or gains on the underlying asset position: a so-called ‘dynamic’ hedge. It’s dynamic hedging that can be interesting. The effects of dynamic hedging of long and short option positions can be quite different. Broadly, dynamically hedging a long option position entails selling the underlying as prices rise, and buying as prices fall. Conversely, those who have sold (or written) options need to buy to balance their hedge when the value of the underlying is rising, adding to the buying pressure. And, if the price of the underlying instrument is falling, they need to sell to balance their hedge, adding to the selling pressure. This is, of course, going on every day in a wide variety of deep and liquid markets without anything particularly odd happening to market dynamics. Things are potentially more interesting when markets are structurally imbalanced, with short-term traders, dynamically hedging, concentrated on one side.
Only through the achievement of surpluses during a cyclical upswing can there be room for countercyclical deficits in a downturn. The retrenchment currently being experienced in many countries highlights the consequences of leaving fiscal imbalances unaddressed. Fiscal consolidation is also necessary to bring the debt ratio below the 60% limit. For example, if the deficit ratio does not shed one percentage point in 2011 as planned, the deficit would be some EUR65 million higher than the projected amount. At current interest rates, this would imply an addition of about EUR3.3 million to the annual interest charge on the debt, which at EUR 198 million this year is considerably more than government  4  BIS Review 156/2010  investment in the infrastructure; and the debt ratio would rise by an additional percentage point to 70%. Improving the long-term sustainability of public finances assumes additional importance in view of the expected doubling of the share of the elderly in the Maltese population by 2060. As a result, age-related spending is set to increase by more than 10% of GDP. Partly because of these demographic trends, Malta is among the group of EU countries facing the greatest challenge in terms of fiscal sustainability. 10 Since this task can only be addressed gradually, we have to start now. Completing the planned reform of the pension system must be part of the solution. In particular, introducing funded pensions promises to deliver benefits on several fronts.

Without wishing to preempt what you shall be taught, I wish to only explain that good corporate governance is one of our strategic objectives and its inclusion as a strategic objective reflects our commitment to align our operations with world best practices, consistent with our vision ‘to be a world class central bank’. The module on Risk Management was included to provide you with knowledge that will enable you appreciate why the Bank has introduced the Risk Management Department. Director - Risk Management will do a presentation during which he will explain what risk management is all about and its relevance to Bank of Zambia. Finally, the inclusion of a module on the Core Functions of the Bank of Zambia is designed to provide you with knowledge on the operations for which the Bank was established. This is important for a number of reasons. First, we want to have a cadre of enlightened and well informed managers who will portray a positive image of the Bank and reflect our standing as a world-class Bank. As managers, you have to have a reasonable understanding of how the Bank’s core activities departments operate and are organised. Second, as managers, especially as “world-class” employees, you are also expected, by the public, to  BIS Review 125/2006  1  have a reasonable grasp of issues pertaining to core operations of the Bank.
At the same time, the high productivity and relatively good corporate profitability can be expected to be reflected in favourable wage growth in the period ahead. Altogether, this means that the prospects for good for firm growth in domestic demand and employment over the coming years. 2/4  Compared with the assessment in June, we today have somewhat more expansionary monetary policy. The budget bill that was presented in September also suggests that fiscal policy, particularly in 2006, will be slightly more expansionary that we anticipated then. That indicates that we might have to revise up our growth forecasts for the Swedish economy somewhat in the years ahead. All in all, this means that growth appears able to remain firm in the coming years. Gradually, however, growth should slacken somewhat, which is in line with a normal cyclical pattern with a normalisation of growth in investment and productivity. Less expansionary economic policy is also expected to contribute to somewhat lower growth in 2007 and 2008. Capacity pressures to rise gradually As regards developments in the labour market, the assessment of the current tendencies has been made more difficult by the change in methods in the labour force survey. With this reservation, it can nevertheless be said that there are signs that the situation in the labour market is improving. According to the National Accounts the number of hours worked began to rise in the second quarter this year.

While this will open up new opportunities for enhanced efficiency and productivity gains in Asia, a better understanding of the risks inherent in networks will better prepare the regional economies to address these risks. This will be a shared responsibility within and among the regional economies. Closer regional cooperation, strategic alliances and smart partnerships will be important key responses for enhancing the prospects for higher growth and development in Asia. Thank you. 2  BIS Review 32/2006