samchain/econo-pairs-v1 huggingface dataset:
While not questioning the basic framework, they suggest 3 that inflation targeting central banks should aim to hit a rather higher inflation rate of around 4%, so as to give more room to cut official interest rates in the face of a collapse in demand before they hit their natural floor of zero. Thus, during the years leading up to the crisis, Bank Rate averaged around 4½%–5% and inflation averaged around 2%, so the real interest rate averaged 2½%–3%. If instead, inflation had been averaging 4% and Bank Rate 6½%–7%, i.e. the same real interest rate as before, then we would have been able to lower Bank Rate by another two percentage points before it approached its lower limit. The thinking behind this seems entirely reasonable. But, aside from ignoring the fact that monetary policy, in the shape of asset purchases 4 , can still be effective even when the policy rate reaches zero, it underplays the costs of higher inflation. Inflation at 2% or less is  3  Olivier Blanchard, Giovanni Dell’Ariccia and Paolo Mauro, “Rethinking Macroeconomic Policy”, International Monetary Fund, January 2010. 4  As well as more exotic options; see Willem Buiter, “Don’t Raise the Inflation Target, Remove the Zero Bound on Nominal Interest Rates Instead”, Citibank , 5 March 2010. BIS Review 31/2010  5  generally felt to be low enough that businesses and households do not have to consciously plan for rising prices – it is “close enough” to price stability, in other words.

Credit derivatives have contributed to dramatic changes in the process of credit intermediation, and the benefits of these changes seem compelling. They have made possible substantial improvements in the way credit risk is managed and facilitated a broad distribution of risk outside the banking system. By spreading risk more widely, by making it easier to purchase and sell protection against credit risk and to actively trade credit risk, and by facilitating the participation of a large and very diverse pool of non-bank financial institutions in the business of credit, these changes probably improve the overall efficiency and resiliency of financial markets. With the advent of credit derivatives, concentrations of credit risk are made easier to mitigate, and diversification made easier to achieve. Credit losses, whether from specific, individual defaults or the more widespread distress that accompanies economic recessions, will be diffused more broadly across institutions with different risk appetite and tolerance, and across geographic borders. Our experience since the introduction of these new instruments - a period that includes a major asset price shock and a global recession - seems to justify the essentially positive judgment we have about the likely benefits of ongoing growth in these markets. Despite the benefits to financial resilience, the changes in the credit markets that are the subject of your conference have also provoked some concerns and unease, even among those on the frontier of innovation and the most active participants in these markets.
The Riksbank works actively in various international forums such as the EU/ECB, the BIS and the IMF to be able to detect at an early stage weaknesses that could lead to financial crises and to meet threats to stability. We support in various ways the endeavours to strengthen and harmonise international regulations and supervision work in different countries. Concluding remarks The economic downturn in all three Baltic countries is a deep one. There are some indications that the recession may have bottomed out or is at least close to it. The trade and current account balances have improved, which is mainly due to domestic constraint, but to some extent also to improvements in exports. The pressure on the currencies has declined. It is easier for the countries’ governments to fund their budget deficits. Although those deficits are still high, they appear to be held in check, at least temporarily, through drastic fiscal stabilisation measures. The IMF’s and the EU’s loan programmes for Latvia are still in operation. With regard to Estonia, efforts are being focused on clarifying the conditions for a  BIS Review 11/2010  5  possible adoption of the euro as early as the turn of the year. All three countries have recently succeeded in acquiring loans on the international markets. But at the same time as we note these positive signs, we must be aware of the continued crises in the economies, with high and rising unemployment, and a heavy fall in GDP, consumption and investment.

The downswing in the economies was very rapid and severe, as a number of factors combined: •  The countries’ competitiveness had been undermined by the large wage increases, at the same time as the strong demand in the domestic markets had led to a waning interest in production for export. •  “Bubbles” of overproduction and high prices, primarily in the property sector, led to a more or less complete stop in construction. •  The global crisis meant that demand for the countries’ export goods declined. •  The global crisis led to foreign investors being neither willing nor able to inject capital to the Baltic countries. At the same time, foreign depositors made large withdrawals from the banks. The crisis led to GDP in the Baltic countries falling by up to 20 per cent during 2009 alone, and budget deficits soared, as did the outflow of currency, which put pressure on the foreign currency reserves. Real wages fell, unemployment rose, property prices collapsed and the number of borrowers experiencing problems repaying their loans increased rapidly. However, the outcomes in the different countries differed somewhat from one another. How has the Riksbank assessed developments in the Baltic countries and what action has it taken? As many of the major Swedish banks have such large commitments in these countries, the Riksbank has long been closely following developments in the region.
First, large Malaysian banks with nationwide and regional and international presence that are able to compete with global financial players;  b. Second, banking institutions with nationwide presence that are able to offer a broad range of financial products and services; and  c.  Third, specialist niche players delivering specialised value added products and services for specific segments of the market. Ladies and Gentlemen: The financial services industry has evolved considerably over the recent period. New emerging trends have provided us with new opportunities in our quest to create a dynamic financial system that will best serve our economy. In striving towards high performance and world-class standards in the industry, we look forward to working with you in this dynamic and challenging environment to achieve this common goal. Let me now conclude and wish you a most productive Summit. 6  BIS Review 28/2004

If inflation deviates from target by more than 1 percentage point, the MPC has to write a public letter to the Chancellor to explain why, and what it is doing to bring it back. These arrangements remain relatively novel and unusual in UK constitutional terms. Prior to 1997, a longstanding objection to Bank of England independence was concern that such arrangements would be inconsistent with Ministerial duty to answer to the House of Commons on major matters of policy. A high level of transparency and openness about MPC decisions has been a critical aspect of meeting expectations of parliamentary and public accountability as well as an effective way of enhancing the credibility of monetary policy. In fact greater openness about monetary policy was part of the package of changes that were made to restore credibility after the UK’s exit from the ERM in 1992. The Bank played its part by introducing a new quarterly Inflation Report, which by 1997 had won widespread respect for its objectivity and  1  Goodhart, C (1999) ‘Recent developments in central banking: some special features of the Monetary Policy Committee and of the European system of central Banks’ Jean Monnet Lecture, Dublin European Institute, 1999. BIS Review 17/2005  1  professionalism. Against this background, the 1998 Bank of England Act required the new Monetary Policy Committee to sign off the Bank’s Inflation Report. In practice, the MPC’s sign off has been far from a formality, though the Inflation Report formally remains the Bank’s report.
Our central view remains that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills. But it is important to look through those temporary effects to the outlook further ahead. The discussion within the Monetary Policy Committee is explained in the minutes of our June meeting which were published this morning. As ever, there is room for differences of judgement as to the appropriate level of Bank Rate – as shown by the differing views within the MPC. But every member of the Committee is determined to bring inflation back to target and keep it there – or as close to the target as possible – indefinitely. In the long run, it is of the utmost importance that the right institutions to secure both monetary and financial stability are in place. I believe they are. Chancellor, you are now moving on. Our country continues to benefit from the institutional arrangements you introduced in 1997. As that great political commentator Niccolo Machiavelli noted, “nothing brings a man greater honour than the new laws and new institutions he establishes”. I encourage you to be equally bold in your next job. Institutions outlast us all. Over time, they are adapted as we learn the lessons of the past in the light of a changing present to meet our future needs.

At the same time, to ensure no disruption to the financing of the US deficits, there may be a need to consider broadening the scope of investing in US assets especially the physical assets. This is to ensure continued interest in US assets at a time when some segments of US financial assets may be less appealing than before on account of the ongoing stress in the credit market. But in the longer-term, we need to look at this process of adjustment from a global perspective and the key to the issue would be to rebuild a stronger domestic demand growth outside the US. Doing so would require stimulating public investment in infrastructure especially in Asia, as well as continuing with the financial reform to support private investment and credit expansion. And finally, greater flexibilities in prices will also go a long way in promoting an efficient resource allocation. All these points are not new, but they are a good reminder of what needs to be done. Since, our theme today is on the new trends in reserves management, let me end my remarks with a few points on reserves management and financial markets. Reserves management is essentially the flip side of reserves accumulation. In terms of the stock of reserves, notwithstanding a successful adjustment in the global imbalance, the relative importance of countries, as measured by their reserves positions, is unlikely to change significantly in a foreseeable future from the position we are in today.
After that, however, it is foreseen that the more strained resource utilisation connected with stronger economy activity will lead to a renewed increase in inflation. The risk spectrum mainly concerns domestic inflationary pressure. If resource utilisation is more strained than the Riksbank now assumes or if potential growth has been overestimated, there is a risk of future inflation being higher than in the main scenario. When the risk spectrum is taken into account, underlying inflation, measured by UND1X, amounts to 2.3 per cent both one and two years ahead. Monetary policy conclusions I should like to conclude with some words about monetary policy. In the light of increasingly clear signs of an economic recovery and resource utilisation that is somewhat more strained than expected, the Riksbank has decided to raise the repo rate 0.25 percentage points, to 4.0 per cent. By safeguarding price stability, we aim to create conditions for a stable and sustainable development of production and employment in the Swedish economy. Last year’s higher inflation and our assessment that it was not solely transitory have already left their mark on monetary policy. That was the case not least last summer, when we raised the repo rate because of concern that the weak exchange rate combined with comparatively high resource utilisation might lead to the higher inflation becoming entrenched. In September we, like other central banks, cut the interest rate 0.5 percentage points; later in the autumn, however, we were more cautious about lowering the instrumental rate than, for example, the European Central Bank.

1  2  Borio, C.: Monetary policy and financial stability: what role in prevention and recovery?, BIS Working paper No. 440, January 2014  BIS central bankers’ speeches
This legislation has successively defined and redefined these purposes, rights and obligations among stakeholders. This legislative path has been long and winding – Table 1 provides a summary. It has been shaped importantly by the social, legal and economic climate of the day. And it is the interplay between these contextual factors that, through an evolutionary process, has delivered today’s corporate governance model. Moving to incorporation Tracing definitively the origins of what today are called companies is not straightforward. It is possible to sketch a timeline stretching back at least to Rome around 700BC to find something resembling a company (Shelton (1965)). Certainly, by the sixth century AD a number of corporate entities were codified in Roman Law (Moyle (1913)). Modern concepts of tradable “shares” in companies appear to have emerged in the mid-thirteenth century in continental Europe. In England, early methods of incorporation were set out in a common law case in 1615: incorporation was a privilege bestowed by the state, either by a Royal Charter or a private Act of Parliament. 3 At least in principle, this meant a company was incorporated with public good objectives in mind. A prominent early example of such a company was the Bank of England. It was established in 1694 under both a Royal Charter 4 and an Act of Parliament. 5 The Charter establishing the Bank made clear that its purpose was “to promote the public good and benefit of our people”. And so it remains today. But this incorporation process was costly, lengthy and cumbersome.

Should it emerge in the course of work - either with regard to sanctions or prudential oversight - that the planned reform is becoming so cumbersome that it jeopardises the present level of banking supervision, we reserve the right to reassess the project. Conclusion My explanations clearly reflected the National Bank’s wish to adopt a moderate stance with regard to public interventions. We are pleased that the Federal Council requests through the FINMA Act that the regulation consequences of new projects be assessed. The ongoing reform of capital adequacy requirements is driven by international standards (Basel II). It is the responsibility of the SFBC and the banks to find correct and acceptable solutions. Everything beyond this must be prepared by the G-10 bodies. The call for moderation directly affects the National Bank with regard to the oversight of payment and securities settlement systems. We contribute to minimising the regulatory burden by interpreting the term “systemically important” in line with the law, by closely cooperating with the SFBC and by taking into account the activities of foreign oversight authorities. We will continue on this path in the future, too. 2/2
These initiatives are set out in the Financial Services Industry Transformation Map (or ITM), a roadmap that paints Singapore’s vision as a leading global financial centre in Asia in 2020. 22 In the ITM, our action plan includes the following: First, growth strategies by business lines – leveraging global and regional opportunities, and strengthening our position in activities where we already have a strong competitive advantage; Second, innovation and technology adoption – embracing innovation, sharpening our competitiveness and injecting even greater dynamism into the sector; Third, programmes for upgrading skills – expanding and deepening our talent pool. 23 I will briefly share two areas of relevance to this audience. The first area is on the strategy to grow our FX market into the e-trading centre in this time zone. Today we are already an established international financial centre and FX market, ranked third globally after London and New York by FX volumes. In the next phase of our transformation, we want to become a global FX pricing and liquidity centre, operating in the Asian time zone. 4/5  BIS central bankers' speeches  Many of you have provided valuable feedback to MAS that there is further opportunity for price discovery of Asian FX trading to take place in Singapore. As Asia’s FX trading needs grow, and as electronification of Asian FX trading progresses, there is a need for a more efficient price discovery venue where pricing and matching of FX trades take place. We aim for Singapore to be the e-trading ecosystem in the region.

BIS Review 95/2008  5  I hope that this gives you a sense of the use we make of business surveys, and business intelligence more generally, in making our regular assessment of the state of the economy each month, before taking our decision on the appropriate level of Bank Rate. The timeliness of this information is particularly important at the current juncture, when the economic climate is changing rapidly. The global and UK economies have been subject to two large shocks of uncertain magnitude, duration and impact. The first is the continuing de-leveraging in the banking system and the attendant squeeze on the terms and availability of credit. The second is the fairly relentless rise in commodity prices, especially that of oil, driven in part by the robust growth in demand in the emerging economies. These two shocks both depress output growth, though they have divergent effects on inflation. In our May Inflation Report, our central expectation was for four-quarter GDP growth to slow markedly through this year, reflecting both subdued real income growth and tighter credit supply (see Chart 7, which also includes the same backcast information as Chart 6). It was then expected to gradually recover through 2009 as credit conditions slowly improved. The corresponding projection for CPI inflation is shown in Chart 8 (note that no uncertainty is shown for the past, as the data for CPI inflation are rarely revised).
But perhaps equally important is the fact that it has been possible to adjust workforces and wage growth at a local level. First, companies can adapt the use of labour to production by using overtime, part-time positions or contract labour. Moreover, the supply of labour is highly flexible. When demand rises, the number of job-seekers increases. Those who are already employed work more. During upturns, we have in particular observed an increase in labour force participation among young people. Along the same lines, the number of persons in education tends to rise when unemployment is rising. When labour demand increases, we see an influx of job-seekers from our neighbouring countries. In addition, close to 30 000 persons had some form of employment in Norway throughout or during parts of 2001, but resided in Sweden. With the enlargement of the EU, Norway has become part of an extended labour market. Enlargement also provides scope for increased trade in services. This increases the production capacity of the Norwegian economy. For example, it seems that capacity in  1  See Kydland, F.E. and E.C. Prescott (1977): “Rules rather than discretion: The inconsistency of optimal plan”, Journal of Political Economy 85, pp. 473-490. 2  See Akram, Farooq Q. (2003): “Reell likevektsvalutakurs for Norge” (Real equilibrium exchange rate for Norway), Norsk Økonomisk Tidskrift 118, pp. 89-112. 4  BIS Review 21/2005  the construction industry has increased. The activity level is now very high, and there are still no signs of rising wage growth.

Clothing prices, as measured in the consumer price index, have fallen by 15 per cent since 1995. In comparison, other consumer prices  2  BIS Review 65/2002  have on average risen at about the same rate in the same period. In 2002, cheaper clothes will save Norwegian consumers about NOK 4-5 billion.1 I would like to highlight two factors that have had a particular influence on economic policy when we compare today’s situation with the situation 30 years ago. •  The phasing-in of a large petroleum sector and thereafter of the revenues from this sector. •  Development of the Norwegian financial market and its integration in the global market. Norway's large petroleum revenues pose considerable challenges to economic policy. Norway’s export revenues and central government revenues can be expected to be high as long as production remains high. At the same time, we know from experience that revenues may vary sharply from year to year. As a result of the high level of earnings and fluctuations in these revenues, the most important contribution fiscal policy can make to stabilising the Norwegian economy is to provide a sound, longterm strategy for the use of petroleum revenues. Attempts to use the central government budget to fine-tune economic activity may achieve the opposite of what is intended if these attempts are perceived as a break with the long-term strategy for the phasing-in of petroleum revenues. Second, economic agents look to the future today when they make decisions about consumption and investment, wages and prices.