samchain/econo-pairs-v1 huggingface dataset:
Second, the Monetary Policy Council has set monetary policy against the background of potential growth for the French economy of around 2.5% per year. We consider the average growth of our economy in the medium-term, and it could be exceeded given that we have a potential to catch up in the medium term. We reckoned with a maximum price increase of 2% and potential real growth of between 2.5% and 3% in the medium term to arrive at a figure of 5% for the medium-term growth trend of the money supply. * *  BIS Review 2/1997  *  -5-  It is very important to bear in mind the essence of the policy implemented by the Monetary Policy Council. Parliament confers on the Banque de France an objective, namely the objective of price stability. Maintaining the value of the currency preserves the purchasing power of the currency, and therefore that of French citizens. In addition, Parliament has sought to create the conditions for growth and for job creation, via the stability of the currency. This is also the goal of the Monetary Policy Council. To achieve this goal, we use two means. First, by preserving the value of the currency, we enhance its credibility in France, in Europe and in the world and allow our economy to benefit from financing at favourable market interest rates.

A third conclusion is that the reason why high inflation was so short-lived on these occasions was either that politics – in connection with the First World War – became too tight and caused a recession; or – in connection with the Second World War and the Korean War – that inflation could be parried by far-reaching regulation and direct control of price-setting and wage-formation. The latter tools are hardly available any longer as alternatives in the political toolbox. It is sometimes said that economic policy-makers often base their actions during a crisis on the interpretation that has been made of the previous crisis.22 This can mean that one sometimes gets things wrong and tends to, so to speak, ‘fight the last war’. But in this case I am quite sure that, if we are at the beginning of something that turns out to be a longer period of more persistent higher global inflationary pressures, it is the last period of high inflation, the one in the 1970s and 1980s, from which we have the most to learn. That is my fourth conclusion. More difficult for monetary policy to deal with supply shocks For my continued reasoning, I need to refer to some economic theory. An economy is constantly exposed to what in economist speak are called shocks, which in principle means a rapid and unexpected development. Some shocks are positive and mean, for example, that economic activity improves and unemployment decreases. Other shocks are negative and lead to recession and higher unemployment.
I am particularly pleased to note the recent efforts to make such features intuitive – so that the man on the street is likely to notice when something is amiss The security challenge will not disappear by going cashless. The latest being the recent Ransomware attack. Cyber risk remains a real threat that must be managed. Significant efforts have been made to strengthen resilience against cyberattacks. The banking and payments systems industry has made this a key priority in recent years. However, cybersecurity is ultimately a shared responsibility between the provider and the consumer. Even the most robust systems can be breached if consumers do not exercise adequate caution or are deceived by fraudsters. In this regard, consumer education plays an important role in keeping cashless payments secure. In addition, cash is also a choice payment instrument for illicit activities. Unlike digital transactions which almost always leave a trail to the parties, payments in cash are anonymous. In his recent book, The Curse of Cash, Kenneth Rogoff points out a very sobering reality – the amount of US Dollars in circulation outside of banks suggests that each American should have around USD4,200 in their wallet. This is not the case. According to him, most of this money is used to hide transactions. However, this alone does not warrant moving away from cash entirely. Rogoff himself acknowledges this, and proposes the solution of eliminating large denomination notes – such as the United States’ hundred dollar bill. The logic is simple.

But that does not mean global effects are absent. The doubling of the effective global labour pool represents a huge, positive supply shock for the global economy. It has encouraged the shift of the production of goods and services that use lower-skilled labour intensively to countries with an abundance of lower-skilled workers – predominantly emerging market economies – while production of goods and services requiring more highly skilled labour has concentrated in countries with a greater share of higher skilled labour – predominantly advanced economies. The growing ability to split production components and tasks through global value chains has amplified this effect. 19  Globalisation has also increased the contestability of labour markets, weakening the extent to which slack in domestic labour markets influences domestic inflationary pressures. 20  That is, the increased ease with which  activities can be off-shored or domestic vacancies filled by sourcing workers from abroad may have reduced the relative bargaining power and wage expectations of workers. While it is difficult to measure precisely, available evidence suggests that contestability effects could be significant. 21  Greater openness appears to  22  and led to growth in domestic  have reduced the sensitivity of wages to domestic labour market conditions unit labour costs (ULCs) becoming more closely tied to global ULC growth. 23  Overall, the greater global supply of labour has lowered the relative wages of lower-skilled workers in advanced economies.
If high productivity growth and low import prices were instead to lead to inflation being well below two per cent, it might be possible to correct the problem quickly by cutting the interest rate. However, this would risk stimulating the economy in a way that would not always be desirable. By bringing inflation back on target at a slower rate, the real economy will develop in a more stable manner. We can thus contribute to stability, although monetary policy cannot affect the long-term growth rate in the economy. It is not stated in the law that the Riksbank should take developments in the real economy into account in addition to the price stability target. On the other hand, it was stated in the preparatory works for the Sveriges Riksbank Act that the Riksbank, without prejudice to the price stability target, should support the goals of general economic policy with a view to maintaining a sustainable level of growth and employment. Not having the ambition of bringing inflation back on target as quickly as possible thus creates flexibility in formulating monetary policy that provides scope to take into account developments in the real economy. At the same time, it is important that this flexibility should not give rise to doubts about maintaining the inflation target in the long term. This is why we have chosen to specify a time horizon, which states that monetary policy should normally be aimed at achieving the inflation target within two years.

Our assessment throughout the year has been that the outlook for inflation and the economy over the coming years indicates that it is reasonable to assume the repo rate will need to be gradually increased. In accordance with this view, we have raised the repo rate four times so far this year and my assessment is that the repo rate will need to be raised further in future. However, as I mentioned earlier, we both can and should change our assessment if the economy develops in a manner we had not expected. Thank you! BIS Review 84/2006  5
Later, when the financial crisis became one of sovereign debt, and most especially, when it turned systemic in the summer of 2011, the ECB had to approve further non-conventional measures that reinforced its position as intermediary in the distribution of liquidity. It substantially lengthened the horizon of its loans, up to three years, when it injected more than € billion in gross terms in two auctions in December 2011 and February 2012. In sum, the financial crisis compelled central banks to adopt, along with robust monetary policy responses, exceptional measures and an unprecedented expansion in their balance sheets. Central banks have been decisive in preventing, even though not always with total success, the deflationary risks that characterised other major financial crises in the past. Measures in the regulatory and supervisory areas The financial crisis has triggered fundamental changes in the international financial system’s regulatory architecture. Since the first G20 meeting in November 2008 in Washington, work has advanced on many fronts. I shall refer to two in particular. First, the changes in the prudential regulation of solvency, the move from Basel II to Basel III. And second, the progress in what has become known as macroprudential supervision. As we know, the financial crisis especially affected banks and, in particular, certain global systemic banks. The response of international banking regulators has had to be commensurate with the dangers of the crisis and with the cost of the crisis to taxpayers.

•  Second, pay a close attention to the implementation of PFMIs and different regulations to ensure that CCPs maintain state of the art risk management practices (margining, collateral, default funds) and adequate governance both for the sake of both their own soundness and the resiliency of the markets they serve. •  Third, define appropriate principles for resolution and recovery of Financial market infrastructures, and particularly CCPs which now concentrate a high level of risks. •  Last, bring transparency in the area of secured and unsecured interbank lending, which are the underlying reference for interest rate derivatives. Monetary policy considerations also call further transparency in that regard as it requires detailed knowledge of the organization of money market and the real conditions under which transactions take place. 2. Meanwhile due attention should be paid to an adequate calibration of the framework. The development of multiple concomitant regulations (capital, liquidity etc…) calls for a perfect coordination. We cannot pile up these different approaches without assessing their impact and the costs incurred for the market and the public. This is a particular concern when considering the collateral requirements that stem from the different regulations. 3. Last but not least, we need to promote a consistent framework.
This guideline is unlikely to stand in the way of market development, as the $ is not a currency commonly used for transactions abroad, and non-resident entities would in any case wish to swap or convert the $ proceeds into a currency of their choice for overseas use. With this liberalisation, the following will now be possible. a. First, MAS will exempt all individuals and non-financial entities, which includes corporate treasury centres, from the $ lending restrictions of the non-internationalisation policy. This recognises that such entities are not usually the prime drivers of destabilizing currency speculation. b. Second, for non-resident financial entities that continue to be governed by the $ policy, we will lift restrictions in the following financial activities: i. Asset swaps, cross-currency swaps and cross-currency repos can now be transacted freely. MAS had hitherto treated such transactions as forms of $ lending. It will no longer do so. ii. Securities Borrowing and Lending (SBL) – Financial institutions in Singapore may now lend any amount $ securities in exchange for both $ or foreign currencydenominated collateral. MAS will lift the requirement that any lending of $ securities exceeding $ million has to be fully collaterised by $ collateral. BIS Review 19/2002  3  iii. $ FX options – Financial institutions may also freely transact $ FX options with nonresident entities. FIs no longer need to maintain documentary proof showing that $ FX option transactions with non-resident entities are for hedging purposes. iv.

Last year, there were several bond deals of about $ billion from domestic corporate issuers successfully placed in Singapore. Structured debt products now account for about 35% of the total $ debt issuance, reflecting a move towards more sophisticated debt instruments. With deeper and more mature capital markets, and greater confidence and experience in managing larger $ flows, we are now ready to make a further move. Since October last year, MAS has been seeking the views of key market participants on how we can facilitate the continued growth of the $ capital markets. Following these dialogues, we have reviewed the non-internationalisation policy, taking into account their ideas and suggestions. We have decided to further liberalise the policy, to lift many of the specific restrictions on the use of the $ Henceforth, we will retain only two basic guidelines: a. First, financial institutions may not extend $ credit facilities exceeding $ million to nonresident financial entities, where they have reason to believe that the proceeds may be used for speculation against the $ exchange rate. This continues to be necessary, as we have no reason to allow offshore speculators to access the liquidity in our onshore FX swaps and money markets. b. Second, when a non-resident entity wishes to obtain a $ loan, or tap our equity or bond markets to fund overseas activities, it must swap or convert the $ proceeds into foreign currency as and when it uses the proceeds offshore.
The question is how the so-called transmission mechanism looks and in what time frame interest rate changes affect inflation. If a central bank overestimates the deviation from the inflation target or underestimates the effect of a change in its interest rate policy, there is a risk that it will raise or lower interest rates too much. In such a situation, the policy in the end will become excessively restrictive or expansive and it may become necessary for the central bank to shift its policy in the opposite direction. Such a change may create instability and reinforce cyclical swings. Therefore it would appear that there is reason to proceed with some caution when the policy is changed. Central banks also tend to adjust interest rates in relatively small steps. Nevertheless, the conclusion that a central bank should proceed carefully is not self-evident. The question is how the markets players interpret a certain behaviour. Ever so small changes in the instrumental interest rates, which may be interpreted as the first step in policy change, can have a big impact. (cf. the Federal Reserve’s increase in February 1994). There is probably no obvious and simple rule for action. Most likely, the central bank’s task is to account for, as clearly as possible, both its long-term plans and the uncertainty that is inherent in its assessment.

Let me provide some further information on these operations. That day, the SNB announced that it was narrowing the target range for the three-month Libor from 0.00–0.75% to 0.00–0.25%. It also stated its intention to expand sight deposits at the SNB. These were subsequently increased from around CHF 30 billion at the beginning of August to over CHF 250 billion by the first week of September. The SNB used a range of well-established instruments to effect this extraordinary increase in the supply of liquidity to the Swiss franc money market, as chart 3 shows. Firstly, reverse repo operations were discontinued. As a result, outstanding reverse repos fell from CHF 26 billion on 3 August to zero a week later. Secondly, the SNB stopped renewing SNB Bills that fell due, and later started to repurchase those that remained outstanding. While these amounted to some CHF 110 billion at the end of July, this figure gradually decreased to below CHF 45 billion by the end of August, reaching some CHF 20 billion by the end of November. Thirdly, to further boost liquidity, on 10 August the SNB also started to employ foreign exchange swaps. These amounted to approximately CHF 80 billion by the end of the third quarter. Fourthly, the SNB again resorted to conducting repo operations, which provided the Swiss franc money market with approximately CHF 18 billion of liquidity in August and up to around CHF 33 billion in November. These exceptional liquidity measures exerted downward pressure on interest rates.
BIS Review 44/2003  5  While the Swiss economy therefore remains weak, it is set to strengthen somewhat into the fourth quarter of 2003 and the first quarter of 2004. Improved corporate expectations, a pick up in residential construction and strengthened financial conditions suggest that the trough of this cycle was reached during the second quarter of 2003. Provided the growth momentum in the U.S. sustains itself, exports should rise gradually, followed by an increase in equipment investment. Given considerable margin of slack in resource utilization, an improvement in the labour market can only be expected in the course of 2004. As we have indicated in our quarterly monetary policy assessment on September 18, the Swiss National Bank will continue to support the economy by conducting an accommodating monetary policy. Low interest rates – we continue to target our 3-month libor rate at 0.25% - are designed to keep Swiss franc investments unattractive. Despite a rapid expansion in our monetary aggregates which we monitor closely, price stability is currently not threatened. A rapid expansion of monetary aggregates does not automatically lead to higher inflation. In Switzerland, commentators often compare the current environment to the one in 1988, when money supply expansion rates were similar to what we observe today and inflation eventually rose to 6% by 1991. While understandable, the comparison is flawed. For one thing, current interest rates are significantly lower than they were at the time, thus reducing the opportunity cost of holding money to virtually zero.

Moreover, with the achievement of what constitutes for all practical purposes price stability across many economies, a number of central banks discovered that with it came a new challenge: policy could no longer be directed exclusively to push inflation lower but had to pay at least as much attention to avoid inflation that could conceivably fall too low and thereby undermine the goal of price stability by initiating deflationary tendencies. As has traditionally been the case, vigilance will therefore continue to be the “Leitmotiv” for the world’s central banks. 3. Global Competition and Disinflation  A number of factors have contributed to the striking disinflation since the 1970s.5 Good monetary policy has undoubtedly made an important contribution of which many of today’s leading central bankers have every reason to be proud of. In many cases, a precondition for good monetary policy was institutional independence. Politicians have therefore played an important role as well. They have empowered central banks and freed them from political interference. Fiscal policy probably also contributed somewhat to an improved global macroeconomic environment though the case is not entirely convincing.6 Finally - and this is the point I would like to emphasize today – the global disinflation of the last twenty years has been facilitated by dramatic structural changes in the global economy. These changes are best encapsulated by what is loosely referred to as globalization.
However, this should be seen in the light of the earlier forecasts having been wrong in the other direction; when the Swedish and international economies grew at a very rapid rate, while inflation was low. The surprising upturn in prices during 2001 came to affect policy. Although the Riksbank made the assessment - as early as May 2001 - that the upturn was essentially temporary, there remained concern that it might to a greater degree than anticipated reflect a high level of resource utilisation. When there were signs that inflation expectations were about to rise during 2001, at the same time as the krona weakened, we made the assessment that it was necessary to intervene and raised the repo rate by a quarter of a percentage point. This took place in early July 2001. A couple of months later, after the terrorist attacks in the USA on 11 September, the Riksbank chose to lower its steering interest rate by 0.5 percentage points in the light of the poorer economic prospects. However, no further reductions were made. The reason was that a tentative upturn in economic activity was expected in the future and resource utilisation was assessed as relatively high, despite the slowdown. Compared with other countries, fiscal policy was tangibly expansionary, while a weak exchange rate gave impetus to the Swedish economy. Developments in 2002 During spring 2002 the repo rate was raised by 0.25 percentage points on two occasions.

Increases in electricity and oil prices are examples of this type of supply shock. It is therefore important to separate the effects of the energy price rises from the effects of other driving forces behind inflation. This is also completely in line with the clarification of the inflation target published by the Riksbank in 1999. The Riksbank's assessment is that energy prices one to two years ahead will fall back to roughly the same levels as forecast before the increases. However, these forecasts include a slight trend increase in electricity prices. Uncertainty in connection with the Iraq conflict Assessing more exactly how much is a temporary rise in inflation and how much depends on more lasting tendencies is a delicate task. The assessment of economic activity, both here in Sweden and abroad, plays an important role here. The uncertainty currently prevailing in the global economy makes it more difficult than usual to interpret various economic indicators and to predict future developments. When weak figures are received from various sources, it is difficult to know whether they are the result of a slowdown in the economic recovery due to fundamental reasons, such as households wanting to increase their saving to compensate for the large stock market falls, or whether they are the result of an inability to act while waiting for the solution of the Iraq crisis. The assessments of the economic situation and even more the oil prices are largely due to the assumptions made with regard to developments in the geopolitical situation.