samchain/econo-pairs-v1 huggingface dataset:
Averaged over that period average inflation has been only a fraction lower than it was before the pandemic, despite a cumulative decline of around 4% in the level of output. If that amounts to a simple matter of “overheating” – if the economy really can’t cope with aggregate demand growth any stronger than minus 2½-3% a year – then one can only conclude that the UK economy’s supply performance has been chilly at best. The reality is more nuanced. I’ve highlighted three contributing factors. By protecting individual jobs the furlough scheme has had the effect of matching lower labour demand with lower supply. In the second quarter of this year this was worth around 2-3% in terms of aggregate output. Prices of many tradable goods have risen sharply. In some cases this reflects specific supply-side problems. Also important has been the general shift in demand, away from services and towards goods, caused by the pandemic. Within the UK, those shifts – regional as well as sectoral – have caused a degree of “mismatch” in the labour market. At least during the early part of the recovery, available jobs haven’t perfectly matched available workers (including those on furlough). There’s a good case that all three of these things will prove temporary. We know the furlough scheme is being wound down, restoring a significant degree of supply to the labour market. As far as tradable goods are concerned, it’s unlikely the pandemic-related shifts in demand will continue if the threat of the illness itself recedes.

Chart 8 plots wholesale price indices for oil, metals and agricultural goods. The latter two are aggregate measures. The six-fold rise in the price of US lumber provided one of the more spectacular examples for an individual commodity (Chart 9). Chart 8: Non-oil commodity prices have also risen sharply  Sources: S&P Dow Jones Indices, Bloomberg Finance L.P and Bank calculations. Chart 9: The spike in lumber prices didn’t last long  Sources: CME Group5 and Bank calculations. But there have also been sharp price increases further up the supply chain – one notable example is computer chips. And the overall picture, evident in both surveys and official data, is that manufacturers the world over have been facing significantly higher prices for their inputs than they were not just some months ago but even before the pandemic (Chart 10). In many cases (Chart 11) firms have been unable to get hold of them at all, except with long delays, with knock-on effects on their own delivery times. 5  CME Group market data is used under license as a source of information for certain Bank of England products. CME Group has no other connection to Bank of England products and services and does not sponsor, endorse, recommend or promote any Bank of England products or services. CME Group has no obligation or liability in connection with the Bank of England products and services.
The distribution chains for goods and services provision, ports, airports, railway transport and energy are just a few examples. Finally, I should like to mention the need to reform the labour market, collective bargaining and indexation clauses. In the absence of prompt and decisive reforms in these areas we will see unemployment increase sharply, with the harmful effects that this has on activity and on the stability of our financial institutions. Conclusion We are currently facing an unprecedented international financial crisis in a severely weakened macroeconomic setting. Certainly our banking system has moved in the right direction, reinforcing its risk control management mechanisms, its profitability, its efficiency and its solvency. This gives it a solid starting position but we cannot allow ourselves to be either naive or complacent: the Spanish banking sector is facing major challenges that will affect its capacity to generate profits in the coming quarters. I am convinced that our banks, which knew how to capitalise on the expansion, will also know how to take the appropriate management measures and adopt the right strategy to allow them to address these difficulties successfully. For our part, the public authorities will continue to take the measures necessary to ensure that this unavoidable adjustment takes place in the least traumatic way possible for our economy.

We would like to see only a gradual increase in non-performing loans or a gradual decrease in credit quality, given the extent of the crisis. We try to make sure that this is a gradual process and nothing unexpected or unforeseen happens. Next: lay the foundation for the longer term Aside from an immediate task of keeping the recovery intact, the other thing we have been doing is to lay the foundation for the longer term. Specifically, we try to ensure that our financial sector responds well to the landscape post-Covid-19. It is hard to say how exactly the post-Covid-19 landscape would look like, but there are at least two trends that will become significant in the future. Firstly, the world will become much more digital, and secondly, there will be a much greater emphasis on sustainability. On this, we have published the Bank of Thailand’s financial landscape consultation paper that put out our view about how we see things evolving in the financial sector. The paper indicates what we want and do not want to see and what are the red lines in each of these areas that we regulate. In the digital space, the first element of our plan is an open competition. For instance, the current financial landscape in Thailand, as in many markets in the region, is dominated overwhelmingly by banks.
11  See H M Treasury (2013), which points out, for instance, that “The Government intends that the frameworks for monetary policy and macro-prudential policy, operated by the MPC and FPC of the Bank of England respectively, should be coordinated” (p. 5), and “In order to foster coordination between monetary and macroprudential policy, there is overlap between the membership of the Monetary Policy Committee and the Financial Policy Committee” (p. 10). BIS central bankers’ speeches  5  need to provide support to macroprudential policy when it comes to counteracting the buildup of financial imbalances.12 One argument in favour of monetary policy needing to provide support to macroprudential policy is that there will probably always be incentives to try to circumvent macroprudential policy measures, as it may be profitable for the party that succeeds, in much the same way that there are always incentives to avoid paying taxes. We do not yet know how successful the systems for macroprudential policy now being implemented around the world will be. However, we do know that changes in policy rates are significantly more difficult to circumvent.13 It may therefore be necessary to use the policy rate in certain situations, despite a side-effect being that some areas of the economy that do not need a higher interest rate will also be affected. Failure to take macroprudential policy measures, or measures that are too weak, will put more pressure on monetary policy in this respect.

The Czech Lands had been a key industrial and economic part of the former AustriaHungary and hence had a relatively well-developed banking sector. An awareness of the close links between government finances, the banking sector, firms and households shaped the economic policy of the First Czechoslovak Republic. Karel Engliš worked systematically to balance the budget and deserves most of the credit for sorting out public finances in the early 1920s. In 1927 he submitted three tax laws that substantially lowered corporate taxation and supported the creation of capital. At the same time, though, he tied the tax reform, which led to lower revenues, to cuts in government expenditure and a streamlining of the civil service. So, Rašín and Engliš established a trinity of traditions in our country: a stable currency, sound government finances and non-inflationary economic policy. These traditions became a theoretical, practical and moral legacy for subsequent generations of economic policymakers. It is unusual these days to look back to the communist period for economic inspiration. The socialist system was inefficient and cumbersome and discouraged initiative and innovation. Central planning by definition made the system less adaptable to change and created an economy of shortage. Despite this, the Czechoslovak version of socialism tried to eliminate the most glaring imbalances and preserve basic macroeconomic equilibrium. Fortunately, our central planners didn’t cause any major imbalances in the consumer market in the 1980s, so the savings surplus wasn’t as large as in other communist countries.
Stefan Ingves: The Riksbank's role in the economy Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at Umeå University, Umeå, 6 February 2006. *  *  *  Let me begin by thanking you for the opportunity to come here and talk to you! Travelling around the country and meeting representatives of different regions, industries and sectors of society is an important part of the openness the Riksbank wishes to maintain. These trips provide us with input for our discussions at the bank, while we build up confidence in our operations. This is my first public appearance as Riksbank Governor, and it feels good to stand here in front of students, teachers, local politicians, regional business representatives and other Umeå residents. I hope we will have a stimulating discussion and I will certainly do my best to answer your questions. Introduction After living and working abroad for many years, it is an honour, as well as exciting and a pleasure to be back in Sweden and at the Riksbank. The bank I left some years ago is now different in many ways. The most important change is that the Riksbank has been governed since 1999 by an Executive Board, consisting of a Governor and five deputy governors, which makes all of the strategic decisions, including monetary policy decisions. Previously the interest rate decisions were formally made by the General Council, which now instead appoints the members of the Executive Board.

These positive developments are occurring against a background in which, moreover, competitiveness gains are being sustained, our exports continue to gain market share and the substantial external surplus persists. That said, this favourable situation 8/9  should not be understood as meaning that Spain has managed to completely overcome the imbalances built up during the previous expansion and during the crisis that began in 2007, as demonstrated by the figures for unemployment, public debt and external net borrowing, among others. Persevering with reforms to increase the economy’s growth potential, maintaining competitiveness gains and fiscal consolidation policies are a prerequisite for progress in making the reductions required in the budget deficit and public debt, controlling the economy’s financing costs, improving the balance of payments and, last but not least, increasing the Spanish economy’s capacity to generate employment. Thank you for your attention. 9/9
There is also firm evidence that the inflation targeting regime has earned credibility in the markets and the community. The monetary regime will be further tested in the period ahead, which will among other things be characterised by an exceptional level of foreign direct investment in the aluminium industry and associated publicly owned and debt financed power plants. Our experience is a strong indication that inflation targeting is a policy which can be pursued in a very small and open economy as in a large economy with very deep financial markets. This policy is resource-demanding and imposes by necessity a very strong discipline on the respective central bank. In our view the increased focus on financial stability in the Central Bank Act of 2001 was natural and well within the accepted framework of central bank activities. The Bank was responsible for banking supervision until the end of 1998 when that function was merged with the Insurance Supervisory Authority in a new and unified Financial Supervisory Authority, with which the Central Bank cooperates quite closely on financial stability issues. While the Central Bank had responsibility for banking supervision, its attention was necessarily focused on individual institutions and overseeing that their operations complied with existing laws and regulations. Before banking supervision was transferred elsewhere, the Central Bank had also begun to focus its attention on broader financial stability issues along the lines that many other central banks were doing at that time.

This part of the city survived the 1963 earthquake, when nearly all the city's beautiful neoclassical 18th and 19th century buildings were destroyed. After the earthquake, international financial aid poured into Skopje in order to rebuild the city. Today, Skopje is seeing a makeover in buildings, streets and shops, and many projects (Macedonian Struggle Museum, the Archeological Museum of Macedonia, National Archive, Constitutional Court, New Philharmonic Theatre) were finished in order to return some of the looks and spirit of the city. In economic aspect, being many times since 2006 on the list of 10 best reformers by the Doing Business rank of the World Bank, proves that Macedonia has undergone considerable economic reforms. It has developed as an open economy with the trade accounting more  BIS central bankers’ speeches  1  than country's GDP in recent years. Although the environment was highly difficult, first with the global financial crisis, afterward with euro area crisis and more recently, with Greece crisis, our GDP growth was on average above 3% for whole this period, which is one of the highest in Europe, and for 2015 it is expected to be around 3.5%. The unemployment from a very high level, throughout this period is on declining path, by implementing many structural reforms and ALMP. The government strategy to attract foreign investments and establishment of a good business environment for the development of small and mediumsized enterprises (SMEs) was paid off.
The flexibility of their wages and prices makes them therefore unusually well-suited to a currency union like EMU. At the same time, these countries have not shied away from reforms that many leading EU countries have not yet been able to bring about. Estonia, Latvia, Lithuania, Hungary and Poland have, for example, carried out comprehensive reforms of their pension systems, which now resemble the Swedish model with savings partly invested in funds. In these areas in particular, it is rather the EU that has something to learn from the candidate countries than the other way around. It is as Pope John Paul II said, that now finally can “Europe breathe with both lungs”. The new member states enrich the EU, not just economically but also intellectually, and of course also culturally and in human terms. The enlargement puts the EU in motion; not just the trade and investment, but also the institutions and the ideas. BIS Review 51/2004  5

For large banks, we are making progress on resolution planning, and this world is different to five years ago, but we are not there yet by any means. I have a background in resolving banks, and I regard having the capacity to resolve failed large banks – including the largest – as the holy grail of resolution. Unlike the legendary Holy Grail, I think there is a good reason to believe that the objective of being able to resolve large banks that fail can be within our grasp. I am very clear that when firms mess up, they should be allowed to fail, and by doing so they are putting at risk the money of their shareholders and if necessary after that those who provide debt funding according to levels of seniority. But I am also very clear that really achieving the objective of avoiding a no failure regime requires a fundamental change of mindset both inside firms, the authorities and in society more broadly. Fear of failure is an important conditioner of behaviour in a financial regulator, and achieving a change on this front depends on establishing a wide acceptance of our approach that orderly failure which does not compromise our public policy objectives is an acceptable outcome. BIS central bankers’ speeches  3  To be clear, we should be criticised where failure compromises those objectives and we could have taken steps to avoid it.
It is already clear however that it will amplify the headwinds to the strong recovery that the euro –area has been experiencing in 2021, and that it will intensify inflation pressures in a context where inflation has already increased significantly and will remain high over the coming months. The general uncertainty that marks the euro-area macroeconomic environment has implications for the conduct of monetary policy. In these conditions, it is important to balance carefully the risks of waiting too long to act as opposed to those of normalizing too soon. In any case, the  commitment of the ECB is clear: the Governing Council will do what is necessary to bring inflation firmly and durably to around two per cent over the medium term. The forward guidance, relying on state contingent criteria and the “sequencing” are instrumental to this goal. Policy normalization will follow a clear order: the ECB will end its asset purchases first, likely in Q3 2022, then raise the key interest rates, eventually reducing its balance sheet in a third step. All along this gradual process of normalization, the Governing Council of the ECB made it clear that it will maintainoptionality; gradualism and flexibility in the conduct of monetary policy. In that context, financial markets are currently considering that the rise in interest rates might start in the near future, with a first 25 bps hike almost fully factored in (90 %) as of next July, followed by two others by the end of this year.

David Carse: The current state of banking reform in Hong Kong  Speech by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the luncheon of the Hong Kong Foreign Bank Representatives Association, held at the Hong Kong Club, on 5 September 2000. *  *  *  Ladies and gentlemen, I am pleased to have the opportunity to address this lunch gathering of the Hong Kong Foreign Bank Representatives Association. As an international financial centre, it is the essence of Hong Kong that it should be a host to foreign banks. And as the banking regulator in Hong Kong, it is important that the HKMA should keep in close touch with foreign banks through events such as today’s lunch. This gives us a chance to explain aspects of our policies and how we see the current state of banking in Hong Kong. It also gives you the opportunity to provide feedback to the HKMA on any issues of current concern to you. Hopefully, I will not have to address too many hostile questions. The 1998 Banking Sector Consultancy Study I have chose to speak to you today on the subject of “The current state of banking reform in Hong Kong”. This seems a good time to undertake this stocktaking. It is over a year since we embarked on the reform programme that we devised in response to the Banking Sector Consultancy Study undertaken by KPMG and Barents in 1998.
Normal competitive pressures can push valuation methods away from the conservative extreme and generate larger exposures to risk. As a result, individual firms and the overall market are more exposed to risk in a stress scenario than would be desirable. Another set of challenges comes with the broader damage to markets that can accompany the failure of a major financial institution. Firms have strong incentives to avoid large financial losses and to reduce the risk of failure, of course, but they do not have the incentive to internalize the potential external consequences of their distress on the financial system, and it is unrealistic for market participants to incorporate these risks into market prices. This “public good” dimension of financial stability means that while the whole economy benefits from a more stable financial system, each individual institution would prefer that others incur the costs associated with its provision. As a result, firms may collectively underinsure against the risk of failure and underinvest in the infrastructure and policies that promote financial stability. And finally, policies designed to reduce the risk of failure in financial markets create moral hazard, dulling the incentive individual firms face to self-insure against potential loss. We apply a set of capital requirements and supervisory constraints to offset the distortion created by the safety net, but these may not fully compensate for the impact on behavior of the broader range of financial intermediaries of the perception that the authorities will act to protect the financial system from systemic risk.

Timothy F Geithner: Hedge funds and derivatives and their implications for the financial system Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Distinguished Lecture 2006, sponsored by the Hong Kong Monetary Authority and Hong Kong Association of Banks, Hong Kong, 14 September 2006. *  *  *  I want to thank Joseph Yam for inviting me to Hong Kong for this occasion. We are approaching the 10-year anniversary of the financial crises of 1997-99. Those crises were remarkable both in the scope of countries and markets they affected, and for their speed and severity. The circumstances leading up to the crises varied across countries and regions, as did the magnitude of the resulting damage to the real economy. But each of these events had one dynamic in common the confluence of a sharp increase in risk perception, and the subsequent actions taken by financial institutions and investors to limit their exposure to future losses. As asset prices declined and volatility increased in response to increased concern about risk, firms moved to call margin, to reduce positions and to hedge against further losses. These individual actions had the aggregate effect of inducing even larger price declines and further heightening perceptions of risk, ultimately propagating and amplifying the effects of the initial shock. The dynamic I just described was not unique to the crises of the late 1990s, nor was the damage to overall economic activity they left in their wakes.