samchain/econo-pairs-v1 huggingface dataset:
During the previous year, this appreciation was 2.8 percent. The lek-foreign currency interest rate spread, though downward during three latest years, continued to be at positive levels. Economic developments during 2006 have sustained a stable domestic currency. The lek’s appreciating pressures have been concentrated mainly on July-August and December. Besides the seasonal entry of foreign currency, which is the main factor of the lek’s appreciation over this period, the key interest rate increase has also been reflected in the market. The high foreign currency supply over this period has been absorbed partly by the Bank of Albania’s interventions, in respect of the target on the rise of net international reserve and in compliance with the country’s overall macroeconomic program. 7. Monetary policy instruments  Fixed-price one-week repurchase agreement is the main instrument employed during 2006. According to the liquidity situation, the Bank of Albania has switched from repurchase agreements to reverse agreements, while the maturity term has changed from weekly to quarterly. This spectre of movements has been imposed by seasonal factors, by the budget behaviour and by the need to reveal certain monetary policy signals. To meet longer-term needs of the market for liquidity during the four last months of 2006, four Treasury bill outright purchase transactions were carried out, at a total nominal value of ALL 3.2 billion.

Thus, payments enabled by new providers have just started to take off, but it looks promising to become a new normal as they are expected to improve the user experience. How fast this segment of the financial system in the EU is developing can be witnessed by the approximately 300 new providers operating by midSeptember this year, which is just two years since the application of the new regulation-relevant regulatory technical standards under the PSD2 (Open Banking Report, 20212). Most of the companies that offer these innovative services are fintechs, but open banking also 3 1/3  BIS central bankers' speeches  offers a possibility for traditional banks. In fact the survey conducted by Accenture3 finds that three quarters (75%) of the banks see payments modernization as being driven by changes in the national payments infrastructure and regulation, which include improving bank-to-bank payments systems, new industry standards and open banking. The rapid move to digital payments has put additional pressure on banks, with three-quarters (75%) of bank executives saying that the pandemic has increased the urgency of their plans to modernize payment systems. Pressures are felt by the central banks as well. In response to changes in consumer payments preferences, the need to further increase efficiency of payments, as well as the disruption caused by COVID-19, the interest in central bank digital currency (CBDC) has also increased. In fact, last year was the launch of the first “live” digital currency in the Bahamas.
My comments will focus on three aspects of monetary policymaking: the institutional design of the central bank; the monetary policy strategy; and the operational framework used to implement policy decisions. The objective of monetary policy - price stability Monetary policy is not omnipotent. Unfortunately, in the past, this was not always recognised in the design of central bank mandates. Central banks were often charged with meeting several, potentially conflicting, objectives, some of which were simply unattainable using monetary policy alone. Unsurprisingly, the resulting inadequately designed institutional frameworks led to poor overall economic outcomes. Today, with the regrettable experience of high and rising inflation in the 1970s in mind, the capabilities and limitations of monetary policy are better - although still not universally - understood. A broad consensus now exists that the maintenance of price stability is the appropriate objective of monetary policy. This consensus is rooted in the belief that monetary policy makes its best 1  BIS Review 44/2000  contribution to overall economic welfare by maintaining price stability - and thereby allowing the relative price mechanism to work more efficiently. It goes without saying that this is a consensus with which I fully concur. The institutional framework for the single monetary policy described in the Maastricht Treaty reflects this economic consensus. Of course, the Treaty was written with the experience of European and other central banks in mind. First and foremost, the Treaty clarifies the objective of the ECB.

We acknowledge that this can make our strategy more difficult to understand, especially at the outset. Sometimes the strategy is accused of lacking clarity on the grounds that the two-pillar approach is rather complicated and therefore unclear. However, alternative strategies would only achieve clarity in a superficial sense. Rather than being simple, they may actually be simplistic - and therefore misleading. Drawing together these arguments, let me emphasise that a monetary policy strategy should not be seen as a machine that mechanically delivers policy decisions. There must be room for a diversity of views, for deliberation and for judgement in the Governing Council’s discussion. Monetary BIS Review 44/2000  4  policymaking cannot be reduced to a reaction to a single figure, be it monetary growth or an inflation projection taken from a model or a group of experts. Nor can monetary policy be formulated on the basis of a single chart, however colourful. The ECB’s strategy provides scope for extensive debate and the exercise of informed judgement, both of which are essential to policymaking. Taking an eclectic, more diversified approach to inform policy judgements - as is implicit in the two-pillar approach - is likely to lead to a better understanding of the economy, to produce better policy advice, allow better policy discussions and therefore reduce the risk of policy errors. This robust approach to monetary policymaking is at the heart of the ECB’s strategy.
Employment has continued to grow and total hours worked exceed pre-pandemic levels. At the same time, the average number of hours worked remains somewhat below its pre-pandemic level and its recovery has stalled since mid-2022. As the energy crisis fades, governments should roll back the related support measures promptly and in a concerted manner to avoid driving up medium-term inflationary pressures, which would call for a stronger monetary policy response. Fiscal policies should be oriented towards making our economy more productive and gradually bringing down high public debt. Policies to enhance the euro area's supply capacity, especially in the energy sector, can also help reduce price pressures in the medium term. In this regard, we welcome the publication of the European Commission's legislative proposals for the reform of the EU's economic governance framework, which should be concluded soon. Inflation According to Eurostat's flash estimate, inflation was 7.0 per cent in April, after having dropped from 8.5 per cent in February to 6.9 per cent in March. While base effects led to some increase in energy price inflation, from -0.9 per cent in March to 2.5 per cent in April, the rate stands far below those recorded after the start of Russia's war against Ukraine. Food price inflation remains elevated, however, standing at 13.6 per cent in April, after 15.5 per cent in March. Price pressures remain strong. Inflation excluding energy and food was 5.6 per cent in April, having edged down slightly compared with March to return to its February level.

Non-energy industrial goods inflation fell to 6.2 per cent in April, from 6.6 per cent in March, when it declined for the first time in several months. But services inflation increased to 5.2 per cent in April, from 5.1 per cent in March. Inflation is still being pushed up by the gradual pass-through of past energy cost increases and supply bottlenecks. In services, especially, it is still being pushed higher also by pent-up demand from the reopening of the economy and by rising wages. The information available up to March suggests that indicators of underlying inflation remain high. Wage pressures have strengthened further as employees, in a context of a robust labour market, recoup some of the purchasing power they have lost as a result of high inflation. Moreover, in some sectors firms have been able to increase their profit margins on the back of mismatches between supply and demand and the uncertainty created by high and volatile inflation. Although most measures of longer-term inflation expectations currently stand at around two per cent, some indicators have edged up and warrant continued monitoring. Risk assessment Renewed financial market tensions, if persistent, would pose a downside risk to the outlook for growth as they could tighten broader credit conditions more strongly than  2/4  BIS - Central bankers' speeches  expected and dampen confidence. Russia's war against Ukraine also continues to be a significant downside risk to the economy.
Caleb M Fundanga: The global economic crisis – Zambia’s strategy to maintain stability Remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the 4th Eastern and Southern African Management Institute (ESAMI) Summer School Event, Arusha, 29–30 November 2009. * I. *  *  Introduction  It is a great honour and privilege to be invited by ESAMI to discuss Zambia’s experiences in the global economic crisis and the strategies that have been chosen to deal with its effects and to bring economic recovery. In discussing this topic, I will begin by highlighting the effects of the crisis on the Zambian economy. I will also highlight the strategies used to maintain stability, indicate the current state of the economy, the challenges and then conclude. II. Origins of the crisis  As you may already be aware, the beginning of the global economic crisis has been traced to the collapse of the sub-prime mortgage market which started between 2002 and 2006. This was when lending to the household sector in the United States of America (USA) was growing at a rate far beyond that of the broader economy (i.e. growth in GDP). The rising delinquencies in the subprime mortgage market triggered turbulences in the subprime mortgage-backed securities market leading to a financial crisis in October 2008, first, in the USA, and which later quickly spread to financial institutions in Europe.

Conclusion  The Bank of Zambia and the Government will continue with efforts to deal with challenges from the global economic and financial crisis, which still remain significant and continue to threaten macroeconomic stability and the long term growth path of the economy. In this regard, focus will be on attainment of the following objectives: •  Maintaining macroeconomic stability;  •  Maintaining fiscal prudence to ensure that it does not become the source of instability;  •  Increasing or consolidating public and private sector investment in infrastructure that builds the long term productive capacity of the economy and helps to diversify the economic base;  •  Improving the business climate by lowering the cost of doing business; and  •  Harnessing regional markets as an alternative source of demand for exports as well as source of supply for goods and services, including energy. 6  BIS Review 161/2009
These were, namely: the appreciation of the euro; higher oil, commodity and food prices;, worsening confidence and tighter financing conditions, prompted by the financial strains; and, of course, the effects of the above-mentioned weakening in the US economy. In Europe, this made for a slowdown in the pace of activity in the second half of the year, although euro area growth remained more robust than in the United States. The resilience shown by the euro area has led analysts to project growth for the coming quarters that will be slacker but not far off potential, albeit with a similar measure of uncertainty to that expressed in the case of the US economy. Turning to prices in the euro area, the rate of inflation stood at 3.5% in March 2008. This worrying figure reflects the strong short-term upward pressures stemming from energy and food price rises in recent months. Foreseeably, although inflation may hold at a rate of over 2% for a number of months more, it should begin to move back to this level in the second half of 2008. That said, considerable upside risks remain, linked essentially to the possibility of second-round effects emerging in wage- and price-setting. The Spanish economy ended the year 2007 with a GDP growth rate (of around 3.5%) that we might qualify as robust. But it began to show signs of undergoing a change in cycle, following an upturn that had lasted for more than ten years. Into 2008, the information available confirms this perception of the domestic macroeconomic situation.

These have increased its growth potential and provided it with elements of flexibility that leave it better placed to face any shocks that may arise. Acting along these lines have been Spanish euro area membership, notable population dynamism and the investment drive made in recent years, which have equipped the Spanish economy with sound foundations to maintain sustained growth in the medium term. Undoubtedly, though, the external turbulence that arose during 2007 may detract from the effectiveness of this flexibility. One possible source of risks is lower growth of the world economy, either because certain economies – particularly the United States – may contract more than expected, or because the loss of dynamism may spread more intensely to other areas. This would hinder the buffer role that external demand should play in the context of slowing domestic demand. Another series of potential risks are those that would arise from any prolongation of the financing difficulties in international markets generated by the turmoil. Let me go more deeply into this second area, as I believe it is of particular relevance for this Meeting. Much has been written and said in recent months on the origins and propagation of the turbulence. I shall therefore focus here on the consequences of this episode for the Spanish financial system, a matter on which there has also been no shortage of comment, though not perhaps always well-founded.
One trend in the market environment that we must track concerns the increasing harmonisation in accounting rules and practices internationally. The IIF has quite correctly noted the need to align the supervisory framework more closely with the emerging framework for harmonised accounting guidelines. A greater “meeting of the minds” is warranted especially now that the New Basel Accord includes explicit disclosure requirements intended to promote greater insight into a bank’s risk profile. Yet as the Institute’s comment letter reminds us, there are also other areas of the New Accord, such as its treatment of provisions and the valuation of financial instruments, where supervisors and accounting professionals should continue to work toward convergence. We think that In order to contribute to financial stability, accounting standards should be consistent with sound risk management and control practices in banks and should facilitate market discipline. The Committee has, therefore, attached great importance to taking an active role in the international debates on accounting and to promoting the supervisory perspective on key accounting issues. The Committee has consulted extensively with representatives of the accounting profession and this dialogue will continue. I should add that we are interested in pursuing new opportunities for discussion on issues of mutual concern with accounting-standard-setting bodies and private sector accounting professionals. In this respect, we very much welcome your initiative to enhance this important dialogue. Recognition of diversification An area of change that capital rules must mirror is the constantly evolving state of the art in risk management.

The seller will be obliged to make the investor — the so-called investor who is just an individual — acquainted with these documents. No less important is the law the Speaker has spoken about, setting forth the rules for selling investment financial products. This is where the Federal Antimonopoly Service could step in and make the difference. Misselling should be punishable. We are working on this draft law jointly with the Finance Ministry, and hopefully the Federation Council will in turn assist in passing it as soon as possible. A number of regulations may even need tightening there. Apart from this future law, it is our responsibility to protect investors from product offerings or financial instruments whose risks they are unable to evaluate, from products they may buy at banks on the assumption that they are buying a sort of bank deposit. That is, it turns out that people do not realise that they become retail investors when they buy these products and assume some risks. As I see it, urgent action is needed to rectify this situation. This is what we propose. The decision we are bringing up for discussion today has taken us quite some time to formulate given all the compromise solutions 3/4  BIS central bankers' speeches  we had to consider. We propose that direct restrictions be imposed on the sale to non-qualified investors of structured financial products, that is, products with leverage and those with a forex component in an asset base.
Few doubt that there are challenges to defining and calibrating the indicators used to determine when capital buffers should be triggered, and by how much. However, to quote Borio, “while calibration is  17  Assenmacher-Wesche and Gerlach (2010). 18  Hott and Monnin (2008). 19  For examples of models which illustrate downward spirals, please refer to Markus Brunnermeier and Lasse Pedersen (2009), Stephen Morris and Hyun Song Shin (2004). BIS central bankers’ speeches  5  not straightforward, the difficulties can be overstated”.20 To support his claim, Borio notes that traditional monetary policy also confronts such challenges when interest rates are set on the basis of indicators, such as output gaps or natural interest rates which are unobservable and difficult to measure accurately. It is however commonly accepted that central banks have, to a large extent, surmounted these difficulties. Of course, countercyclical buffers cannot be implemented without inflicting some costs to the economy, but the trade-off involved seems significantly more favourable than is the case with “leaning against the wind” policies. A 2011 study by the Bank of International Settlements estimates that, by reducing the probability of a severe crisis, the benefit of countercyclical buffers is on average 10 times higher than their costs in terms of real output growth per year. V.  The Swiss case  Every central bank in the world faces its versions of the challenges I have mentioned. The Swiss National Bank is no exception.

133–153, February. Rajan, Raguhuram G. 2005. Has financial development made the world riskier? NBER Working Papers. No. 11728. National Bureau of Economics Research, Inc. Taylor, John B. 1993. Discretion versus policy rules in practice. Carnegie-Rochester Conference Series on Public Policy 39, pp. 195–214. 12  BIS central bankers’ speeches  Taylor, John B. 2009. The financial crisis and the policy responses: an empirical analysis of what went wrong. NBER Working Paper 14631, National Bureau of Economic Research, Cambridge, MA, January 2009. BIS central bankers’ speeches  13
At the same time, the rise in inflation is expected to be moderate, but this requires among other things a gradual increase in the interest rate. A look further back… It is now almost one and a half decades since we in Sweden were forced to abandon the fixed exchange rate. This was the starting point for the changeover in economic policy that led to both monetary policy and fiscal policy taking on different roles than they had in the 1970s and 1980s. Fiscal policy had previously often been overly expansionary and contributed to excessively high inflation. It was now given the main task of ensuring that public finances developed in a way that was sustainable in the long term. Monetary policy, on the other hand, was no longer tied to defending the exchange rate in that the krona was allowed to float. Its main task was instead to more directly maintain inflation at a low and stable level, by using interest rate changes to affect demand in the economy. The new regime has lived up to expectations (Figure 1). Following the initial deep crisis, inflation has been much lower and fluctuated less than in the 1970s and 1980s. At the same time, growth in the economy has been higher and more stable than before. Real wages have also developed favourably. In many respects, developments in Sweden are good also from an international perspective, and this was certainly not the case during the 1970s and 1980s.

These forecasts are, of course, uncertain and developments in recent years in particular have shown that events occur from time to time that are difficult to predict. It is therefore necessary to assume that inflation will during certain periods deviate from the target and sometimes deviate substantially. The important thing in the long term is not the temporary fluctuations in inflation, but that expectations are anchored around the inflation target. The inflation target can then fulfil its important function as nominal target when prices and wages are set and investment decisions are made. And in this respect we appear to have succeeded well (Figure 7). Let me in this context also briefly mention how we make our forecasts. Previously we made forecasts on the basis that the repo rate - our policy rate - would remain constant during the forecast period. If inflation was expected to be lower than two per cent, this was a signal that the interest rate needed to be cut, and if it was expected to be higher, the rate needed to be raised. However, the assumption that the repo rate would remain entirely unchanged over a long period of time is fairly unrealistic. Many times – for instance when everyone is expecting a long period of interest rate increases or interest rate cuts – this assumption of a constant repo rate makes it difficult for us to make reasonable forecasts. Now our forecasts are instead based on an assumption that the repo rate will develop in line with market expectations.