samchain/econo-pairs-v1 huggingface dataset:
This has often been demonstrated over the years and is one factor that international rating agencies repeatedly underline in their reports on Iceland’s sovereign ratings. Thus there is every reason to expect that macroeconomic imbalances will ease quickly in the near term. In this process, investment is bound to contract sharply when the aluminium sector projects come to an end and private consumption will shrink as well, to leave very low or even zero GDP growth in 2007. Such a scenario is necessary to achieve acceptable internal and external balance. After the robust growth episode of recent years, it is time to slow down for a while. Experience shows that the exchange rate plays a key role in macroeconomic adjustment. Given the precedents, a depreciation will smooth out imbalances fairly swiftly. In the current climate it is natural to ask whether the Central Bank has adequate instruments to keep inflation in check. The answer is yes. But it cannot be denied that a strong counter-effect by other forces, actions or expectations will obviously make the Central Bank’s task more difficult. There are many reasons that inflation is above target and will remain there for some time, which I shall not dwell upon here. They have already been discussed in depth in the Central Bank’s publications, for example. With a sufficiently tight monetary stance, the Central Bank is convinced that the inflation target will be attained, and this is its goal. It will require a sufficiently tight stance for a sufficiently long time.

The Bank’s most recent interest rate decision must be seen in this light. The rationale behind it was explained in a press release issued by the Central Bank this morning [May 18, 2006]. As I mentioned, the rise in the housing component explains the bulk of recent increases in the CPI. So it is not surprising that people have wondered whether the housing component should be included in the index on which the inflation target is based. The Central Bank has held this view, partly because changes in housing prices tend to be a leading indicator of private consumption and inflation, and also because over the years the CPI excluding the housing component has been more volatile than with it. Including the housing component in the CPI in effect makes the index less volatile. Of course it is natural to ask whether the right reference is being used for the inflation target and the Central Bank is obviously open for such discussion. However, it is absurd to change the CPI or strip it of certain components that become temporarily troublesome. The monetary policy framework and its implementation must not be changed except when the economy is in balance, and then only on the basis of long-term perspective, not vague short-term interests. Financial stability Over the past weeks and months, the Icelandic financial sector has been in the spotlight domestically and, not least, internationally. Not all of this publicity has necessarily been worth striving for.
The main entry on the liability side of the balance sheet is “central bank money”, comprising banknotes, which are supplied on demand, and the reserve accounts of commercial banks and building societies. 2 These are effectively sterling current accounts for the commercial banks – they are among the safest assets a bank can hold and are the ultimate means of payment between banks. In normal circumstances, the main entry on the asset side of the balance sheet is the Bank’s lending to those same commercial banks. 3 In setting monetary policy, our normal objective would be to lend exactly the amount of central bank money demanded, consistent with the MPC’s choice of Bank Rate. Crucially, although the targets for reserves accounts may react to the state of financial stability in the system, the Bank’s choices here are dictated by the stance of monetary policy. In normal times, we ask the banks to choose their own targets for reserve accounts and then lend just enough cash to the system as a whole so that the banks can collectively meet the aggregate of their targets. The commercial banks will then lend to, or borrow from each other in the inter-bank market, to distribute the total amount of cash around the system so that each individual institution can meet its target. Each bank is incentivised to meet its reserves target by the application of penalty rates to those who are – on average over a monthly maintenance period – either excessively short or long.

Results of the comprehensive asset-assessment exercise As you probably all know, the European bank assessment exercise, covering 130 banks, most of which will be directly overseen by the SSM, essentially comprised two components. First, an asset quality review (the AQR), which basically involved an analysis of the rigour with which bank balance sheets reflect the value of different assets. The review evaluated, as appropriate, accounting classifications, collateral values, fair value calculation methods and the recognition of borrowers’ impaired creditworthiness. Second, a stress test, evaluating how solvency would fare in two macroeconomic scenarios: a baseline scenario, considered likely, and another highly adverse scenario. BIS central bankers’ speeches  1  In addition to increasing the transparency of banks’ financial position and to providing information to help ensure the effective functioning of the SSM as a supervisory authority from the outset, the analysis aimed to detect potential capital shortfalls that needed to be rapidly redressed. To do this, quantitative benchmarks were set for capital adequacy ratios – measured by the ratio of common equity tier 1 (CET1) capital to risk-weighted assets – for each part of the exercise (8% in the AQR and in the baseline scenario of the stress test, and 5.5% for the adverse scenario). The exercise was designed to high standards. This was manifest in the breadth of the field work done for the review of bank balance sheets, in the severity of the adverse macroeconomic scenario envisaged and in the wide range of risk (credit, market, sovereign, etc.) factors considered.
The scope is relatively moderate, but appears nonetheless to have reduced bottleneck tendencies in some industries where demand has increased sharply. Traditionally, many workers from our neighbouring countries have contributed when the labour market in this country has been tight. In 2001, close to 30 000 persons resident in Sweden were employed in Norway for all or part of the year. Swedes who have registered as residents of Norway come in addition. An increased supply of labour from new EU member states to Norwegian enterprises may lead to a higher-than-normal increase in potential output for a period. Many of the foreign workers work for a shorter period in Norway without being employed in a Norwegian enterprise. Examples include foreign contractors and self-employed in the construction industry who carry out various building projects in Norway, as well as others who carry out other types of projects. Aker Kværner, for example, has contracted 300 consultants based in India to work on the Ormen Lange project in North-West Norway. An increase in the use of these short-term contracts will appear as an increase in Norway’s service imports, and contributes to increasing the supply of goods and services without drawing on domestic resources. Protectionist measures may dampen the impact on the Norwegian economy of an increased supply of labour from the new EU member states. The transitional rules from 1 May last year stipulate that foreign workers shall have Norwegian wages and working conditions.

Competitiveness may have to return to a level we have not experienced since petroleum production began. Rough estimates indicate that the real exchange rate that safeguards the balance of trade when Norway’s oil wealth no longer has the same weight in the economy will be more in line with the real exchange rate we had in the 1960s. Thank you for your attention. 7/7
Figure 10 Growth forecasts (annual change, percent)  3.2  3.2  United States  2.9  2.9  2.6  2.6  2.3  2.3  2.0  2.0  1.7  1.7  1.4  2.6  1.4 15  16  6.8  17  18  2.6  Eurozone  2.3  2.3  2.0  2.0  1.7  1.7  1.4  19  1.4 15  16  17  18  19  6.8  4.2  6.6  6.6  4.0  4.0  6.4  6.4  3.8  3.8  6.2  6.2  3.6  3.6  6.0  6.0  3.4  3.4  5.8  3.2  3.2  China  5.8  15  16  17  18  19  15  Source: IMF. 13  4.2  World at PPP  16  17  18  19  Figure 11 Terms of trade (index, 2013=100)  110  110 Dec.18 Report  105  105  100  100 Mar.19 Report  95  95  90  90  85  85 13  14  15  16  17  18  19  20  21  Source: Central Bank of Chile.

Agreement on the reforms is also important because in an ERM II context the room for manoeuvre available to central banks is restricted. The implied commitment to a high degree of exchange rate stability - and for countries like Malta which have experienced limited day-to-day exchange rate movements, the concept of stability has taken on a very specific meaning - means that monetary policy cannot be used for demand management purposes. The onus of adjustment must then fall on fiscal and structural policies. The implementation of effective policies must also be ensured because the financial markets will be quick to spot any incoherence between a country’s exchange rate and its underlying economic condition. Since market behaviour, however, also has the potential to produce volatility to a degree unwarranted by the economic fundamentals, the exchange rate stability assessment at the end of the ERM II phase should take appropriate account of country-specific circumstances. Another precondition for maintaining the exchange rate peg and ensuring a smooth transition to the euro is financial sector stability. In this respect, a regulatory and supervisory framework based on best international practice is already in place in Malta, and the legislation incorporates almost all the features of the corresponding EU directives. Institutional responsibilities are divided between the Malta Financial Services Authority, which is responsible for the regulation and supervision of banking, insurance and investment services; and the Central Bank of Malta, which is charged with ensuring the financial stability of the system and is also responsible for the domestic payment system.
Brian P Sack: Dollar asset markets – prospects after the crisis Remarks by Mr Brian P Sack, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, at the Financial Markets Association ACI 2010 World Congress, Sydney, 26 March 2010. These remarks were presented via video conference from New York. *  *  *  Introduction The recent financial crisis provided global capital markets with the most significant stress event that they have faced in many decades. For U.S. asset markets, this episode revealed a wide range of outcomes in terms of their ability to function though a period of stress. Some markets demonstrated remarkable liquidity and an unparalleled status as a safe haven for investors; others simply fell apart as investors shied away from illiquid assets with too much complexity and opacity and too much exposure to counterparty risk. Indeed, for many of the markets involved in the intermediation of credit in the U.S. financial system, the crisis revealed structural deficiencies that made the system unstable. Once revealed, this instability required an immediate and forceful policy response to limit the damage. As certain markets ground to a halt, policymakers took extraordinary actions to mitigate the damage to the broader financial system and, ultimately, to the real economy. Those actions, which included a range of liquidity facilities launched by the Federal Reserve and by central banks around the world, proved effective and brought the financial system back from the brink of a complete meltdown.

Instead, discussion should be focused on how to make the use of leverage less procyclical, to identify those sources of leverage that are most productive and to better monitor the vulnerabilities that can result from excessive leverage. Conclusion The crisis offered a rare view into how our capital markets function under extreme stress. Those circumstances revealed vastly different degrees of robustness across alternative segments of our financial system. At one end of the spectrum, markets for certain dollar assets demonstrated considerable resilience to financial stress and were extremely appealing to investors in stress circumstances. At the other end, the crisis highlighted that segments of U.S. credit markets had structural shortcomings that must be addressed to ensure the viability of these markets going forward. Those shortcomings have necessitated two waves of policy response. The first wave was aimed at putting out the fire. To that end, the crisis demonstrated that U.S. and global authorities have the ability and willingness to respond in a manner that meets dollar funding needs in a time of crisis and that promotes broader market stability. The second wave is aimed at building a sounder financial system for the future. Those efforts are still underway, and the reform process may be long and involved. However, I am hopeful that many of the shortcomings are likely to be addressed, and that we will emerge from this episode with a more robust and efficient financial system. BIS Review 40/2010  7
At present, there are no research findings on the costs associated with capital controls or how much those costs rise each year, as this is a complex estimation task that may not even be feasible until several years from now. On the other hand, it can be argued that the costs were small to begin with because of the situation represented by a worldwide financial crisis. Furthermore, in implementing the capital controls, the Central Bank has attempted to reduce these costs as much as possible by granting exemptions. A bill of legislation relaxing certain restrictions affecting firms and individuals is expected in the near future. But none of this changes the need to make every effort to abolish the capital controls. I mentioned long-term costs. In addition to this, the controls were imposed as an emergency measure and constitute a deviation from our contractual obligations under the EEA Agreement. That deviation has been approved by our counterparties, but we are still obliged to make our best effort towards lifting the controls without jeopardising financial and economic stability. Does this mean we must revert all the way to the regime we had before the crisis? I think that, as regards corporate and household capital movements, the answer is broadly yes. On the other hand, it will be necessary to limit financial companies’ exchange rate risk more than was done before the crisis, including the maturity mismatches in their balance sheets and overall size of foreign-denominated balance sheets.

And in closing, I wish to say this: We have a tendency to give little thought to our important economic and societal infrastructure until it gives way. This is true of electricity and heat utilities, water and sewage systems, and matters such as payment intermediation. But fortunately, we have specialised groups of people who monitor such systems, and within the Central Bank and its subsidiary, Greiðsluveitan, is just such a group specialising in payment intermediation. The banking crisis put domestic payment intermediation to the test. The system passed that test, although banknote inventories were very slim at one point. Since then, significant work has been done to enhance payment intermediation security and to learn from the weaknesses that came to the fore during the crash. In 2011, changes were implemented in the banks’, savings banks’ and Central Bank’s decades-long joint ownership and operation of payment intermediation infrastructure, which is now solely in the hands of the Central Bank. In addition to improvements in security, emphasis has been placed on enhancing transparency and disseminating information on payment intermediation. In part for this purpose, the Bank has issued two reports on payment card transactions: a report on credit card transactions, issued in 2011, and a recent report on debit card transactions. We hope that both of these reports will increase all stakeholders’ knowledge and understanding of the payment card market and will highlight the items in need of improvement.
But the ECB has had to take account, too, of domestic demand pressures within the euro area, and of the fact that, even on the core measure, Euro area inflation was moving up gradually to the top of the ECB's 0-2% range. Frankly I don't see how anyone can be confident whether the ECB had it precisely right or wrong - it is perfectly normal for even the best-informed people to disagree on these judgements, as anyone who reads our own Monetary Policy Committee meeting minutes will tell you. But I am wholly confident that the ECB is sensitive to the issues surrounding those judgements, including the downside risks in the US, as indeed it demonstrated a fortnight ago. So, too, are we in the United Kingdom. In our case, we again enjoyed relatively steady overall economic growth through last year, combined with a further fall in unemployment to its lowest rate for over 25 years. Inflation meanwhile continued to run below the Government's 2½% target - and is currently running at around 1½% on the eurozone measure of inflation. This relatively low inflation rate was partly a result of the dampening effect of sterling's surprisingly persistent strength against the euro. The problem for us - and it is a real problem which has been with us for some time now - is the sectoral (and associated regional) imbalance within our overall economy.

The essential instrument of monetary policy - control over short-term interest rates operates, through a number of different channels, certainly - on the demand side of our economies - primarily on domestic private sector demand. There is very little that monetary policy can do directly to influence the supply-side capacity of our economies to meet that demand over time, which is what determines the rate of growth that we can hope to sustain. Improving supply-side performance is therefore fundamentally important and hugely more complex than overall macro-economic management of which monetary policy is a very important part. Our supply-side performance is affected by the whole range of public policy decisions. It is affected, for example, by the extent of free trade and market competition both nationally and internationally; by all forms of regulation, which have an important bearing among other things on the flexibility of goods and labour markets. It is affected by the level and structure of taxation on the one hand and of public expenditure on the other. And perhaps most fundamentally it is affected by the attitudes, and the technical and entrepreneurial skills of the workforce and management which, in turn, depends importantly on education and training. Decisions in these areas often involve difficult political judgements on how to strike the right balance between social and economic considerations. I shall have no more to say about supply-side issues in my remarks, except to thank my lucky stars that I was born a central banker and not a politician.
But the plane, which is well built, will continue on its longhaul journey, with its flight path unchanged. There is consensus amongst leaders from the major political parties on the direction of India's economic reforms. Whichever party is in power will have to deliver the economic goods, which the Indian people deserve and demand. In June last year, India concluded its first comprehensive Free Trade Agreement (FTA) with Singapore. This is a strong signal that India intends to leverage on external economies and open itself  BIS Review 86/2006  3  further. The FTA will also act as the building block for India's comprehensive economic integration with Southeast Asia through the ASEAN-India FTA. Of course, India faces some serious challenges like inadequate infrastructure and rigid labour market. India must also find ways to make the bureaucracy more pro-business, especially towards foreign companies. In addition, India's growth in the last 10 years has been driven by its IT and services industry. But India cannot grow into a major economy on services alone. It will have to expand its manufacturing sector massively. Vietnam Next, Vietnam has grown strongly over the past decade. In the 1980s, there was a paradigm shift in the leadership's thinking. Vietnam implemented economic renovation, or doi moi, and the efforts are bearing fruit. Intel is building a chip plant in Ho Chi Minh city. Singapore, Taiwanese and Korean firms are among the biggest foreign investors in the country. The new generation Vietnamese leadership will press on with reform.

Only by attracting the right talent, can the industry prosper. In attracting talent, you have to compete with other sectors. That means paying a package that is as good as others. Skill sets including technical, analytical and creative thinking doesn’t come cheap. You have to pay for quality. The industry need to devise a scheme that commensurate with the talent they expected. Anything less, would not position the industry well or competitive. For existing talents, continuous professional and skills enhancement programmes organised by professional bodies like MII, would help the insurance and takaful industry in meeting the industrys’ needs. Conclusion Let me conclude my remarks. As we advance forward into the future, the economic and financial landscape would evolve and it would evolve very rapidly. Our duty as industry leaders is to build on the existing foundation that got us here. But moving the industry to next level would require strategic change. It would require fundamental rethinking to stay ahead of the curve and to meet the difficult challenges. The highest of priority needs to be given to raising performance standards, improving customer experience and retention, as well as  BIS central bankers’ speeches  3  attract new and fresh talent. But all this can only be achieved if we embark on a collective effort. Only effective effort would ensure an industry that is vibrant and resilient. Thank you, and enjoy the rest of the evening. 4  BIS central bankers’ speeches
8  BIS Review 9/2010  Figure 5 Spread of short-term external financing of resident banks (*) (monthly average, percent) 2.5  2.5  2.0  2.0  1.5  1.5  1.0  1.0  0.5  0.5  0.0  0.0  03  04  05  06  07  08  09  (*) Loans of non-related banks at variable rates. Gray area depicts the interval between percentiles 5 and 95 of the sample in each month. Source: Central Bank of Chile. Figure 6 World growth (annual change, percent) 5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0  0  Sep.  09  May  Sep.  1990-1998 average (a) Projections for 2010  Dec.  Sep.09  Dec.09  2000-2004 average (b) Projections for 2011  Source: Central Bank of Chile.

BIS Review 9/2010  9  Figure 7 Contribution to annual GDP growth (real annual change, percentage points)  16 12 8 4 0 -4 -8 -12 -16  16 12 8 4 0  -4 -8  -12 -16  97  98  99  00  01  02  03  04 05  06  07  08  Net exports (*)  Private consumption  Government consumption  Inventory variation  GFCF  GDP  09  (*) Goods and services exports minus goods and services imports. Source: Central Bank of Chile. Figure 8 Current inventories 70  4  60  2  50  0  40  -2  30  -4  20  -6  04  05  06  07  Manufacturing (1) Retail (1)  08  09  Inventories over GDP percentage (2)  (1) Figures above (below) 50 points indicate more (less) than desired. (2) Seasonally-adjusted quarterly series. Sources: Central Bank of Chile and Icare/Universidad Adolfo Ibáñez. 10  BIS Review 9/2010  Figure 9 Gross fixed capital formation (1) (quarterly change, percent) 15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15  -15  00  01  02  03  04  05  06  07  08  09  Developed (2)  Asia excluding China and India  Commodity exporters (3)  Chile  (1) Seasonally-adjusted series.