samchain/econo-pairs-v1 huggingface dataset:
The combination of a strong exchange rate (still about 25% above its level of August 1996), a 20% fall in dollar oil prices over the past year, and an average fall of 9.5% in other commodity prices, is holding down retail price inflation. Domestically generated inflation is significantly higher than RPIX inflation. As the one-off effects of the rise in sterling wear off over the course of the next year or so - as indeed they will unless sterling appreciates further - inflation will start to rise above the target unless domestically generated inflation declines. In the long run, domestically generated inflation is likely to be close to the rate of increase of unit labour costs. At present unit labour costs are rising at about 3½% a year. The earnings figures released earlier this month - which showed that average earnings in the economy grew by 4.9% and in the private sector by no less than 5.6% - were undoubtedly disappointing. It is too soon to judge how far they reflect the impact of higher bonuses this year than last. In any event, to hit the inflation target those rates of earnings growth will have to fall back. These high levels of earnings growth are not the underlying cause of inflationary pressure; they are a symptom of a tight labour market. Equally, the prospects for earnings growth depend critically on the future path of output and on inflation expectations.

Mr. King looks at the UK economy and monetary policy Speech by Mr. Mervyn King, an Executive Director and Chief Economist of the Bank of England, at the Building Societies Association Annual Conference in Bournemouth on 27/5/98. Next Monday - 1 June - sees the start of the statutory basis for Britain’s new monetary policy regime. An independent Bank of England will, through its Monetary Policy Committee (or MPC), set interest rates to achieve an inflation target of 2½%. For over 30 years economic policy in Britain has been bedevilled by inflation and the resulting instability of output and employment. Stability - of both prices and macroeconomic performance more generally - requires a credible commitment to a monetary and fiscal framework embracing low inflation and sustainable public finances. That we now have. But stability of the economy is not the same as stability of interest rates. Short-term interest rates must go up and down according to the state of the economy if the inflation target is to be met. In contrast, if monetary policy is successful in achieving the inflation target then, precisely because short-term interest rates will have moved over the economic cycle, long-term interest rates will be relatively stable. And, from the perspective of your borrowers, whether on fixed or floating rate mortgages, what matters is the predictability of the cost of a loan over the life of the mortgage rather than fluctuations, within reason, of monthly payments.
Typically, a bank that runs its operations in a normal course of business is already expected to generate returns on their business or normal profits. If the entire profit is taken as base to calculate bonus for their board members, would that seem fair to the institution? I understand that some banks are exploring ways to remunerate board members which are linked not only to the profits of the bank, but also to other factors, such as the reduction of NPL, appropriate provision of loan loss and other indicators of stability. There is still no consensus on the issue, but moving away from the model of basing remuneration solely on net profit is the move in the right direction and is to be encouraged. In fact, if we continue to explore the question with an open mind, we should be able to come up with a better and fairer model. I would like to leave you with a thought:  4  BIS Review 25/2006  the part that is linked to profits should more appropriately be linked to excess return rather than normal profits. Finally when the remuneration has been set, the Board of Directors should take care to reconsider that the amount is not unreasonably high, as the Board is in the position to be the “Role Model” of what should be appropriate practices for the bank. If the Board takes undue benefits from the institution, this would undermine its authority and set bad example for staff and management to follow.

This year should mark the historic new chapter for the nation’s payment system, where we would see the transfer of the  BIS Review 25/2006  1  payments operation function from the Bank of Thailand to the private sector. This would provide greater flexibility for the system to adapt to the fast changing modern payments system development. Moreover, the recent announcement by the Thai Bankers Association of a major reform in the price structure of various payment media, including cheques, provides an important milestone towards a more efficient payment services. The move reflects a pricing based on the cost of various means of payments which would quickly eliminate inefficiency and costs to commercial banks. Another major achievement that calls for celebration is the significant reduction in the NPL last year. Thai banks have succeeded in bringing NPL down from 556,998 million baht, or 11.82 percent of total loans at the end of 2004, to 461,439 million baht, or 9.05 percent of total loans at the end of last year. In all, the NPL was brought down by a net amount of 95,559 million baht, the largest such decline since 2001, as a consequence of the recovery of the economy and improvement in business conditions. I am confident that this year will see an even more decline in NPL than last year. Moreover, the Financial Institution Development Fund has just completed the merging of Bangkok Asset Management Company, or BAM, with Asset Management Corporation or AMC.
I am very fortunate to have had the opportunity to chair the Committee during the period in which the PFMI were created. I recognize that this was just an initial step in the process, but it was an essential first step. Subsequent CPMI committees, under the leadership of Paul Tucker and Benoit Coeure, have been working with the other Basel Committees, the Financial Stability Board (FSB), IOSCO and individual country regulators to continue to take this effort forward. We have placed a lot of financial stability eggs in the FMI basket. It is important that we monitor and oversee that basket carefully. I would now like to turn the floor over to our first panelist, Claudio Borio. Claudio, the floor is yours, you have 10 minutes. Shari Bower, Caren Cox, Alex Merle-Huet, John Rutigliano, Johanna Schwab, Larry Sweet and Joseph Tracy assisted in preparing these remarks. 1  2  BIS central bankers’ speeches

This is one of the HKMA’s key policy objectives, but it is also an area in which HKAB has a keen and constructive interest. In particular, HKAB, together with the HKMA, is joint owner of Hong Kong Interbank Clearing Ltd, which operates one of the key features of Hong Kong’s financial infrastructure, the Real Time Gross Settlement System. One other project on which HKAB can work closely with the HKMA is in the development of a Commercial Credit Reference Agency. Some of your members are already participating in the Working Group that is now engaged in thrashing out the details of how the CCRA would work. An issue which has been raised in the deliberations of the Working Group is whether HKAB should participate in the ownership of the CCRA, as it does in HKICL. This was not an idea that found much favour when we consulted the industry on the CCRA  4  BIS Review 55/2001  scheme last year. But perhaps, now that it seems likely that such a scheme will go ahead, it is an idea which should be revisited at some stage in the future. That is a matter for HKAB and it is one that I leave you to think about. Even if you were to confirm the earlier view not to participate directly in this particular project, it would not undermine the general principle that the HKMA and HKAB should, wherever feasible, work hand in hand in developing important pieces of the financial infrastructure.
There are a host of unanswered questions about the transition to the higher target, including the potential for it to destabilise inflation expectations. And it is necessary to consider whether the benefits from less frequent episodes at the ELB justify the costs of the additional inflation at the permanently higher target. As Ben Bernanke has recently argued, unconventional policy tools already achieve the equivalent of raising the inflation target in the US from 2% to 5%, without needing to incur any of these costs. Moreover, research by the Bank of Canada shows that it is those who are most vulnerable and on the lowest incomes who lose out the most from higher inflation.37 So even if the costs of a higher inflation target might be small in aggregate, the distributional consequences could be considerable. Such fundamentally political considerations are a reminder why it is best for governments to choose the definition of price stability and for central banks to work out how to achieve it with the tools are their disposal. Before closing I would like to acknowledge a set of broader political economy considerations that could arise in a low-for-long world. These could complicate the execution of current inflation targeting remits, and in the extreme overwhelm them. While all monetary policy tools have distributional effects, asset purchases have generated far greater attention than have changes in interest rates. For example, there is a perception that asset purchases increase inequality.

On 15 January, the Swiss Franc moved by more than 30 standard deviations. For rough scale, an 8 standard deviation move should happen once every three billion years or so for normally distributed data. You may at this point recall the saying popularised by Mark Twain, about “lies, damned lies and statistics”. I think I can be reasonably confident in saying that the fact of these events happening does not mean that we should expect low volatility in financial markets for at least the next three billion years. I am not going to spend time discussing the causes of these events; suffice to say that there was news of an unexpected sort, and the size of the resulting moves points to greater sensitivity in the response of markets. The ability of markets to trade without triggering major price moves was limited. That said, by the end of both days, volatility had reduced, prices had retraced a portion of their peak intra-day moves and liquidity returned. This quick stabilisation helped to limit contagion to other markets, and thus wider effects on the stability of the financial system. Should we therefore be concerned? My answer to that is we should certainly be keenly interested. I agree with the conclusion of the Federal Reserve Bank of New York that understanding the manner in which the evolving market structure is affecting market liquidity, efficiency and pricing is highly important (Potter (2015)).
Provided that the flood situation starts to improve by early December, we should see Thailand staging a respectable comeback on the back of domestic demand revival. We expect private consumption to rebound as early as the first quarter next year, and investment to regain its firm footing by the second. This will be made possible by pushes from reconstruction spending and fiscal stimulus, both through the government’s direct spending and additional measures. And in particular, higher investment on developments of flood warning and prevention systems is also urgently needed, both to prepare Thailand for future flood incidents and to restore foreign investors’ confidence. I would like to stress again that Thailand’s fate will depend upon her success in reviving domestic demand, given that the problems in the U.S. and the Eurozone are still far from resolved and are expected to last well into the next year and beyond. Early resolution of the  BIS central bankers’ speeches  1  U.S. and the Eurozone crises will rejuvenate the now-sluggish global growth momentum, and this will benefit Thailand by allowing her exports to work with domestic demand in driving growth. But if the opposite happens, then it is likely that another global economic slowdown, even a global recession, is coming underway. Ladies and Gentlemen, This leads us to our second focus today on developments in the U.S. and the Eurozone, along with their implications on Thailand’s outlook going forward. Serious structural concerns continue to threaten the health of the U.S. economy.

First, I would like to touch briefly on the Bank of Thailand’s latest view on domestic growth in short and medium term. Then I will delve more deeply into concerns in the U.S. and the Eurozone, along with the likely implications on Thailand’s recovery. Ladies and Gentlemen, I would like to first share with you the Bank of Thailand’s latest economic projection and our outlook for the Thai economy. Despite the fact that we have less than two months to go for 2011, the Bank has just revised down its growth projection for the Thai economy this year, from 4.1 percent in July’s assessment to only 2.6 percent in October’s. This significant downward revision reflects the severity and the broad-based impacts of the flood, which has brought about a halt in agricultural and manufacturing production in affected areas, and has also disrupted production chains in other areas as well. The automobile industry, which has just recovered from supply chain disruptions following natural disasters in Japan earlier this year, is once again terribly affected. And in the big picture, we have sharply lower consumption and investment spending that will require some time to resume their normal trend. But even in the face of this hardship, and amidst the external environment that is quite unpredictable given heightened risks and uncertainty from the U.S. and the Eurozone, we still expect Thailand’s growth outlook to be favorable next year.
This support will continue to be provided by the net asset purchases until the end of the year, by the sizeable stock of acquired assets and the associated reinvestments, and 6/7  BIS central bankers' speeches  by our enhanced forward guidance on the key ECB interest rates. Thank you. 1 In moving annual sums. Source: US Department of the Treasury. 2 See Cœuré, B. (2017), “The international dimension of the ECB’s asset purchase programme”, speech at the  Foreign Exchange Contact Group meeting, 11 July. 3 See also Bergant, K., M. Fidora and M. Schmitz (2018), “International capital flows at the security level – evidence  from the ECB’s asset purchase programme”, ECMI Working Paper No 7. 4 For quantitative evidence, see Cœuré, B. (2017), “Monetary policy, exchange rates and capital flows”, speech at  the 18th Jacques Polak Annual Research Conference hosted by the International Monetary Fund, Washington, 3 November. 5 See Cœuré, B. (2018, op. cit.). 6 See Cœuré, B. (2018), “Forward guidance and policy normalisation”, speech at the Deutsches Institut für  Wirtschaftsforschung, 17 September. 7 See, for example, Rey, H. (2015), “Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy  Independence”, NBER Working Paper No 21162. 8 See Cœuré, B. (2018, op. cit.). 7/7  BIS central bankers' speeches

•  After the change in our legislation in 2016, which established the finality of payment irrevocability on a legal level, we felt it was timely to resume previous conversations with CLS. Our legislation now should fully meet all the high standards and requirements for the Peso to operate in CLS. •  After demonstrating our interest to CLS, I met personally with the Vice-Governor of the Federal Reserve Board to express our interest. The Federal Reserve Board and the New York Fed are respectively in charge of the regulation and supervision of CLS, hence the importance of their opinion about the benefits and performance of the system. Besides, the Fed presides the oversight committee along with 23 central banks representing the 18 currencies that settle in CLS. Then, it was important for us to show our commitment with the process in order to be part of this committee once the Peso is incorporated. •  We subsequently moved on to the due diligence stage last July 2019, when together with CLS we held the first workshop at the CBC for the private sector. III. Benefits of the CLS for Chile  •  Since the beginning of the process, the CBC has publicly stated on several occasions the benefits of CLS and its intention to incorporate the Peso to the system. •  CLS mitigates the settlement risk, through a multicurrency Payment versus Payment (PvP) system with legal certainty, meaning the payments are final and irrevocable.
In the last decade or so, the shocks have been larger and the variance of inflation in a number of countries has at times increased, but with a tendency to undershoot. This has been less marked for the UK, but here still we currently face a period of below target inflation. And, as discussed previously, we have moved into a period of inflation targeting in the face of much larger shocks. To be clear, this does not for a moment call into question the benefits of targeting inflation. Indeed, it is notable that over the same period inflation expectations in the UK have not become de-anchored or more volatile, despite the greater economic volatility. But this shift has required central banks to be somewhat more flexible in the way we go about seeking to hit the inflation target, and the tools we use to do this. This is apparent in a number of approaches used by central banks: the adoption of an averaging over time mechanism to calculate the relevant inflation target, thereby allowing some catch-up to account for past inflation shortfalls; allowing inflation to return to target over a longer period of time where there is a trade-off of weaker activity and above target inflation; or using forward guidance such as the MPC is at present in the face of very great uncertainty, so that we make clear that we will need strong evidence that inflation is likely to return sustainably to target before policy should be tightened.

Data needs could originate from the necessity to cover new areas of measurement and use new methodologies to improve data quality, use and availability. They could also stem from the requirement to come up with new subject measures and variables. Therefore, national data compiling agencies must be cognizant of such evolving data needs to remain relevant and useful. After all, it is the responsibility of the statistical community to make sure to address new data-related challenges which are driven by current and emerging user demands for official statistics. It is potentially in recognition of emerging data-related challenges that the IMF took several steps to enhance transparency and openness, and launched two key data dissemination standards in the 1990s. These included the Special Data Dissemination Standard (SDDS) and the General Data Dissemination System (GDDS). Let me briefly touch on these standards. The SDDS was established in 1996 to guide IMF member countries, interacting or set to interact with international capital markets, in the provision of their economic and financial data to the public. Countries that subscribe to the SDDS agree to follow good practices in four areas which include the coverage, periodicity, and timeliness of data, public access to those data, data integrity, and data quality. Earlier this year, the IMF Board expanded the scope of the SDDS to include seven financial soundness indicators in order to make all stakeholders better understand cross-border linkages, and made it mandatory for participating nations to report international investment positions on a quarterly basis over a transition period of four years.
Firms in the US and the UK cut the size of their workforces at an early stage and adapted their operations to demand, whereas European firms waited until the last minute to carry out the necessary cutbacks. While profits and the future outlook have now turned around more and more clearly in the US corporate sector, the immediate future continues to appear gloomy for European firms, which have seen their competitiveness deteriorate during the slowdown. So in this respect labour market legislation can be a hindrance to high long-term growth. Furthermore, it is likely that legislation sometimes contributes to amplifying cyclical fluctuations rather than smoothing them, since productivity and profits in the corporate sector can easily become procyclical. There are indications that this has been the case during the most recent economic slowdown, as productivity has fallen sharply in the euro area at the same time as it, if anything, has tended to rise in the US. This also suggests that the US economy will normally emerge from slowdowns quicker than the euro area. Sweden among the first to have a sustainable pension system Another area in which Sweden has led the way is in pension reforms. The ATP reform in 1960 included buffers for the government finances. On the other hand, the reform was partly based on the assumption of continued robust growth and an average life expectancy of around 70 years. As we know, the 1970s and 1980s can be viewed as wasted years in growth terms.

It is in no way justifiable to allow bank customers or taxpayers to pay for either exorbitant profits or inefficient operations, which is happening in many countries in the euro area. There is no doubt that we in Sweden can also do more to promote competition in the financial market, not least when it comes to banking activities aimed at private customers and small firms. The largest market players continue to enjoy a high level of market concentration. However, the establishment of a number of new niche banks in the past few years and the recently raging price war on credit for tenant-owned apartments show that deregulation gradually leads to increased competition and consequently to lower prices for consumers. Continued reforms necessary To sum up, we have reason to be proud of the reforms introduced in Sweden over the last decade. They have resulted in Sweden today having a higher growth potential than several of the large economies on mainland Europe. At the same time, we cannot settle for what we have done so far. Sweden must continue to remain a step ahead on the reform agenda that the EU Member States  BIS Review 45/2003  5  decided upon in Lisbon in 2000 and which aims to make the euro area “the most competitive and dynamic knowledge-based economy in the world by 2010”. Reforms are under way in a number of countries in the euro area and will in the long run make the euro area countries more attractive to international investors.