samchain/econo-pairs-v1 huggingface dataset:
It is necessary for the communication policy of the Central Bank that the open letters and Inflation Report would be perceived as complementary factors. Role of public sector in inflation targeting strategy It should be reemphasized that the monetary policy should be supported by fiscal policy in order to be able to turn the downward trend in inflation into a long-term and lasting achievement. The fiscal policy can affect inflation through various channels. A particular channel, through which fiscal policy has direct effects on inflation, is the price and tax adjustments in the goods and services produced by the public sector. Making these adjustments in line with a pre-announced schedule or a pre-described rule would diminish  BIS Review 4/2008  3  uncertainties regarding inflation forecasts and thereby contribute to the reputation of inflation targeting regime. The Central Bank sets inflation targets on the basis of the budget projections of public sector. Therefore, while updating the monetary policy stance, the trend of public sector expenditures, which is a very important component of total demand, is closely monitored. Moreover, keeping public sector wage adjustments consistent with the inflation target is very important as the private sector take these adjustments as a benchmark for their own wage adjustments. Due to all these reasons mentioned above, the Central Bank closely monitors the income and fiscal policy implementations, and frequently emphasizes the importance of structural reforms that would enhance the quality of fiscal discipline and predictability of fiscal policies.

In view of the Treasury’s financing program for 2008 and the Central Bank foreign exchange buying auction program for 2008, the excess liquidity in the market is expected to continue generally at reasonable levels in 2008. However, as was the case in previous years, the level of liquidity in the market may change significantly depending on the changes in Treasury’s financing program as well as in foreign exchange buying amounts of the Central Bank and changes in Treasury cash accounts within the Central Bank. As long as the excess liquidity in the market remains at reasonable levels, the Central Bank will continue to withdraw the excess liquidity in the market on an overnight basis, via New Turkish lira deposit transactions in the Interbank Money Market within the CBRT and repo transactions in the Repo and Reverse Repo Market of Istanbul Stock Exchange. Hence, overnight interest rates will continue to be at the level of the borrowing rate of the Central Bank. Thus, the overnight borrowing rate of the Central Bank will continue to be the benchmark interest rate with respect to the monetary policy. In case of a permanent liquidity shortage in the market, the benchmark short-term interest rates will not be the borrowing rate of the Central Bank but the average interest rate of the repo auctions, which is the basic funding instrument. Therefore, in case of tightening in liquidity, the interest rate taken as a benchmark by the market would have increased merely due to the decline in liquidity.
As a financial centre, Singapore provides a suitable platform for public-private-partnership financing frameworks to help channel private capital into infrastructure development in Asia. BIS central bankers’ speeches  3  Build expertise for investing capital 24. While pricing capital correctly and improving the channels to distribute it more efficiently are necessary, they will be insufficient if the human expertise to manage and allocate the capital is not well developed. Building a successful team of financial intermediaries hinges on identifying the right talent and building the right competencies. 25. In Singapore, MAS and the industry have worked together to develop the Financial Industry Competency Standards (or “FICS”), aimed at enhancing the professionalism of the financial sector workforce. The accredited programmes of FICS are readily accessible, with funding support of up to 90 per cent of the programme fees. MAS supports relevant training programmes under the Financial Training Scheme, which co-funds training costs for training courses. 26. Substantial investment has also been made in the area of financial research. The work of researchers here helps to increase the body of knowledge and understanding of risks unique to Asian markets. Many research institutes have been set up in Singapore to support these efforts. 26. Singapore has put much effort into attracting asset managers to bolster the buy-side of the investment equation. As at end-2010, assets managed out of Singapore stood at $ trillion, with a rolling 5-year average growth rate of 16 per cent per annum.

The region’s 45 countries in the MSCI AC World Index account for less than 10 per cent of the Index although their share of world GDP is 19 per cent. 21. We need to make emerging Asia’s capital markets deep enough to effectively intermediate its considerable savings pool and broad enough to provide a range of suitable instruments for risk mitigation. 22. The crying investment need in Asia is for infrastructure. A report released by the Asian Development Bank Institute estimates that the total investment needs for national infrastructure development in Asia will average close to $ billion per year from 2010 to 2020. But private participation in infrastructure investments in Asia amounted to just $ billion in 2009, less than half the $ billion that went into real estate investment. It will be a shame if Asia’s considerable savings pool, not to mention the inflows of capital from abroad, goes into speculative real estate instead of productive infrastructure investments that enhance long-term economic growth. Having well-developed capital markets is a good way of ensuring that capital is allocated to productive uses. 23. A promising experiment in developing better mechanisms for allocating capital is the World Bank-Singapore Urban Hub. Established in 2009, it brings together Singapore’s public agencies, research institutes, and private sector players to share their experiences with developing countries, in areas ranging from water and waste management, land use planning, and urban development.
To date we have published a report on EMU’s conceivable importance for the Swedish krona; the conclusion was: not much, provided - and it is a major proviso - Sweden provides equal conditions in other respects for wealth formation and business enterprise. The krona’s part in the assessment of inflation has varied One of the topics in the discussion during the past six months has been how the Riksbank reacts to the exchange rate in the formation of monetary policy. We have been accused of being indistinct or dithery during the summer and autumn. First let me say that there is a pattern to this that I find familiar. Conducting and interpreting monetary policy is more difficult when the situation is appreciably affected by other factors than resource utilisation, for instance the exchange rate or inflation expectations. The assessments are then more complex and the Riksbank faces greater educational challenges. The decisions also tend to be more controversial because there is a clearer conflict between different goals, so that more criticism is only to be expected. Our forecasts are always based on a variety of factors. A traditional model for determining inflation in the context of a Phillips curve, for example, points to resource utilisation, inflation expectations and the exchange rate as central components. However, these variable’s relative importance for inflation changes over time.

So personally I do not think it has always been hard to understand the direction, upwards or downwards, of exchange rate movements in recent years. It is the tendency for the krona’s average value to be unduly low that has been more difficult to interpret. To some extent, this has presumably been a consequence of the American dollar being generally over-valued against European currencies. I also believe that some part may have been played by various structural factors, for example the construction of the tax system, the internationalisation of the corporate sector with the attendant relocation of certain functions, the status of the Swedish krona as the importance of the euro grows in Europe and so on. Some of these notions are supported both by arguments from principle and by somewhat anecdotal information. There is reason to believe, for instance, that the taxation of both capital gains and wealth has had effects. Moreover, at least a part of the residual item in the statistics could have to do with a tendency for firms not to repatriate export receipts to the same extent as before, which in turn may be a consequence of a larger proportion of their central functions now being located abroad. But we do not know how quantitatively important these factors are and I believe that perhaps one should be wary of exaggerating them. Still, these are questions that deserve further scrutiny and we intend to pursue them.
The Financial Stability Forum and other groups and agencies have made many proposals to this end. These proposals should help to reduce the risk and severity of future crises, though they will not eliminate them. 2  Joint statement by IMF and World Bank on “An Enhanced Partnership for Sustainable Growth and Poverty Reduction”, 5 September 2000. 3  BIS Review 76/2000  Managing the change While the fundamentals for sound financial systems are universal, specific policies to attain them must recognise the unique socio-political context of each country. To succeed, countries must change, or at least modify, deeply embedded social structures and cultural practices. As the experience of the former Soviet republics and the former East European economies shows, such a far-reaching change can only be an evolutionary process; it cannot happen overnight. The politics in each country will dictate the pace and texture of financial and economic reform. In Malaysia, Prime Minister Dr Mahathir Mohamed has made clear that in reforming and restructuring the corporate and financial sectors, his government’s social and political objectives come first. In Indonesia, monetary and banking reforms, important as they are, are subordinate to more fundamental issues of political transition, security, and national cohesion. The legal framework will constrain what is possible. In many Asian countries, laws are incomplete, and enforcement is weak. For example, not all Asian countries have adequate insolvency laws. Without these, borrowers have an incentive to become “strategic” debtors, deliberately defaulting on interest and loan payments.

François Villeroy de Galhau: Digital innovation - what role can we play as central banks? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Singapore Fintech Festival, 8 November 2021. * * * Ladies and Gentlemen, It is always a great pleasure for me to have the opportunity to speak at the Singapore Fintech Festival, and I wish to thank Ravi Menon and the Monetary Authority of Singapore for organizing it. Although I am joining from Paris today, I look forward to coming back to Singapore soon to continue exchanging. Innovation may not be the first thing that comes to mind about central banks. After all, our institutions have been around for quite some time: MAS just turned 50 – and I take this opportunity to congratulate this golden Jubilee –, and Banque de France is more than 2 centuries old. We are more associated with stability than disruption… Yet the blossoming of digital innovation has the potential to transform the financial system in its entirety. We have to embrace these changes, but there are also things that we need to preserve in this process: the stability of the financial system. Innovation and stability can appear as contradictory in the short run; but they are complementary through a common value; a keystone: trust. Trust of the public in money. To be implemented effectively, these dual principles of innovation and stability require a cooperative setting.
At the same time, all desirable spending programmes must be prioritised within an overall budget framework. Fund structures or other forms of financing outside the ordinary budget are only a way of avoiding budget constraints. This would weaken the credibility of the fiscal rule, which in turn would affect interest rate setting. Again – policy rules and words must be followed up by action. In the words of former Norges Bank Governor Hermod Skånland: Once the authorities have charted a course, they should not embark a different path. 5  National Budget for 2003. BIS central bankers’ speeches  7  Lessons from the financial crisis – financial stability and supervision Chart 14: Household debt. As a percentage of GDP. 2000, 2005 and 2010 I have described how Norway differs from other European countries after the financial crisis. While many EU countries are in the economic doldrums and are facing high government debt, Norway has made use of its fiscal leeway and has fared well. However, there is one area in which Norway differs from other countries in a manner we perhaps do not like: Norwegian households are among the most heavily indebted in Europe. Rising debt and property prices are mutually reinforcing. Higher asset prices lead to higher collateral values for loans. Easier access to credit also leads to increased purchasing power when property is offered for sale. This increases risk in the financial system.

Someone has to pay the bill. The rapid growth in government debt in Europe and the US is consistent with a well known historical pattern. Fiscal policy was used actively in most countries to curb rising unemployment. The mistakes of the 1930s were not to be repeated. The intention was good and the policy was most likely appropriate, but weak public balances became even weaker. On top of this, some countries provided substantial government funding to banks. The situation came to a head in several euro area countries, initially in Greece, which had allowed deficits to creep up during the growth period. In the next round, Ireland, Portugal and Spain came under pressure and had to payer higher interest rates on new loans. The UK also ran a government budget deficit in the favourable pre-crisis years and when tax revenues rapidly declined and social security spending rose, the deficit increased to more than 10 per cent of GDP and government debt doubled. The authorities in many countries must now tread a difficult balance. Controlling debt requires an economy with a back strong enough to carry it. It is not certain that low interest rates are sufficient to sustain the nascent recovery if fiscal policy is tightened. Credible  2  BIS central bankers’ speeches  reforms that limit public spending in the long run, combined with moderate tightening in the short run, could be an appropriate strategy. Governments that saved during the expansion may have the scope for pursuing that approach. Greece did not save.
Working level committees have also been formed to undertake the task of considering new proposals and monitoring the implementation of the MIFC recommendations. To take into consideration global trends and to provide insights on the strategic direction, an International Advisory Panel (IAP) comprising industry leaders and experts from the global community is also being established. Conducive environment for business In continuously creating an enabling environment for the efficient functioning of the MIFC, the Government has identified several key strategic objectives. T he Government has also granted an attractive tax package to promote Malaysia as a competitive international Islamic financial centre. The objective is to build the base - that is, to create the necessary critical mass of participating financial players and to increase the scale of activity. Malaysia aims to attract global players as well as to enhance the capacity and capabilities of the existing financial institutions.

Malaysia has developed the comparative advantage in the area of Islamic finance. The comprehensiveness of the Islamic financial system in Malaysia has been mutually reinforcing with the key components of the financial system comprising the Islamic banking, takaful, Islamic money and capital markets now being at an advanced stage of development. In addition, the established legal, regulatory and Shariah frameworks in the Islamic financial infrastructure is also a key competitive advantage for Malaysia , placing it ahead of other financial centres offering Islamic financial services. In terms of Shariah governance, it has enabled the development of Islamic finance to be orderly and compliant with the Islamic injunctions, thereby ensuring that customer confidence be maintained. The conducive Shariah environment has also ensured that Malaysia is sustained as a centre of product innovation, producing cutting-edge products for the increasingly sophisticated customers. In respect of Shariah interpretation and practices, the MIFC will adopt a stance of mutual recognition and accommodate the various juristic reasoning that has been approved by recognised Shariah advisers . Next week, Bank Negara Malaysia will again host the 2nd International Shariah Scholars Dialogue, gathering the Shariah scholars from different regions in our endeavour to continuously bridge and  BIS Review 104/2006  1  foster greater interaction and promote understanding on the issues and challenges faced by the Islamic community on the aspect of Shariah. Malaysia also has a strong and advanced regulatory regime and legal structure in the Islamic financial system.
In 1835 Alexis de Tocqueville wrote that, “the authority which public men possess in America is so brief and they are so soon commingled with the ever changing population of the country that the acts of the community frequently leave fewer traces than events in a private family. .... The instability of administration has penetrated into the habits of the people”. The stability of institutions is, therefore, one of their greatest assets. Barro and Gordon (1983b) assumed the existence of an ongoing government or central bank which had an interest in preserving a reputation for “good” behaviour. A substantial literature, reviewed by Nancy Stokey (2002), analyses the circumstances in which it is attractive for a “good” government to distinguish itself from a “bad” government. Stokey shows that if it is not easy to do so, then it may be optimal to impose a monetary policy rule on all governments in order to reduce the damage done by the prospect of a bad government in the future. But how can society convince itself that it can eliminate bad government by adopting a policy rule? A really bad government will simply restore discretion to itself. Good and bad governments are not independent actors. They reflect the degree of consensus on how to construct institutions that will pursue consistent objectives. The experience of high and variable inflation itself can be an important force shaping public attitudes towards the design of institutions to control it.

On average, it was 1.1% in this period, dropping 1.8 percentage points from the previous quarter. The rapid decline of annual inflation rates, which has started in the third quarter of the past year, is driven mainly by the slowdown of price rise in food items during this period, as well as the stability of prices of other consumer goods. Inflation performance has reflected the simultaneous action of supply and demand factors. On the supply side, slowdown of commodity prices in international markets and of inflation in our trade partners, combined with the stable exchange rate, have transmitted lower imported inflation rates to our economy. Likewise, contribution of administered prices has been lower. Inflation expectations have been anchored and production cost pressures contained. On the demand side, pressures remain low, conditioned by the continuation of the negative output gap. Reduction of factual inflation rates, shifting of the inflationary pressures balance to the down side and the increase of aggregate demand below its potential, under the conditions of a controlled fiscal policy, have created the space for further increase of the monetary stimulus to the economy during the first quarter of the year. The Bank of Albania has lowered the key interest rate twice, bringing it down to the historic low of 4.25%. Such a decision, besides being in line with maintaining price stability over the medium term, provides the appropriate conditions for boosting private demand at home.
But let me stress one thing very clearly: it is  BIS Review 134/2008  3  important that we get neither too zealous nor to indulgent about regulation. In times such as these, it is easy for opportunism to gain the upper hand, resulting in regulations that do more harm than good. For example, I am a little bit worried about where the discussion on procyclicality is heading. Suggestions have been made that both Basel-rules and fair value accounting standards should be relaxed to cut the banks some slack under stressed circumstances. In my opinion, this seems like a very hazardous way forward. I am also worried about what I in some instances have seen being proposed with regard to the regulation of credit rating agencies. In can agree that in certain aspects regulation in this area could be considered, for instance in relation to the use of credit ratings for regulatory purposes and also concerning some governance issues. But for me, it is quite hard to see how a more general regulatory intervention in this particular area could be justified. There seems to be neither any proof of an existing market failure, nor any convincing assessments on the benefits of imposing rules. On the contrary, as the credit rating business strongly builds on the confidence of those using the ratings, market mechanisms should be quite enough to provide an efficient output. If agencies cannot deliver qualitative and reliable credit assessments they will soon go out of business.

The banks' increased dependency on financial markets to fund their operations also creates a need to keep an even closer eye on certain markets, and in particular the credit markets, which banks not only use for their funding needs but also to manage risks. The greater market dependency also entails the need to apply a greater international outlook in our analysis. Even if a country’s financial system is dominated by a few domestic institutions with limited operations abroad, they can evidently still suffer from the breakdown of institutions and markets elsewhere. However, a wider geographical focus is not only justified by the growing importance of markets. Over the last decade, institutions have also become more international. In Europe, for example, we now have a few truly pan-European banks and even more that operate across borders on a regional basis. Furthermore, in the last year we have seen that not only deposit-taking commercial banks can pose threats to financial system stability. Events in the US tell us that a broad array of other financial institutions, such as investment banks, monolines and the banks’ various kinds of special purpose vehicles have contributed to the build up of imbalances. Therefore, analytical focus is needed not only on commercial banks but also on their different counterparties. Another lesson for central banks I would say is to use their expertise to work more proactively on financial stability policy issues. The current crisis – as well as most historic ones – can partly be explained by regulatory failures.