samchain/econo-pairs-v1 huggingface dataset:
There are however alternative monetary policy strategies that automatically generate similar dynamics to those of the forward guidance described above. These are the so-called makeup strategies,10 one of which is price-level targeting. In this case, the central bank announces a target growth rate for the price level (for example, of 2%). Unlike in the case of inflation targeting, if for some reason inflation stands temporarily below 2%, the central bank will have to ensure that it rises above 2% in the future in order to ensure that the price level returns to its target path. In a way, this strategy obliges the central bank to correct in future any past deviation of inflation consistent with its medium-term target. 10  See Chapter 3, 2018 Annual Report, Banco de España, for a detailed discussion of these make-up strategies. 14  A less radical strategy, albeit similar in spirit, is known as average inflation targeting”. In this case, the central bank attempts to keep average inflation at its target level over a certain timeframe. Unlike traditional inflation targeting, it includes an element of compensation for past deviations, although this is limited in time. Under price level targeting, in contrast, all past deviations must be compensated, irrespective of the time that has elapsed since they occurred.

15  In particular, the Federal Reserve states that, under its new strategic framework, when inflation stands persistently below 2% it will attempt to keep inflation moderately above 2% for a certain time.12 With regard to the ECB, in January this year it announced the launch of a review of its monetary policy strategy. This review has been delayed by the emergence of COVID-19 and is expected to extend into next year. Since this review is ongoing we still do not know what its conclusions will be, but I can confirm that this is an open process: both the ECB and the Eurosystem national central banks are performing a large amount of analysis and requesting the opinion of civil society, academic economists and other professional and social groups. One of the key aspects of this review will be the definition of price stability. The current inflation objective, consisting of rates below, but close to, 2%, may be reformulated. On one hand, it may be necessary to clarify the specific level of inflation that is targeted, in order to make it easier for economic agents to understand.
The market will then decide which types of money households and companies prefer over the long term. So far, I have focused on various types of digital token money emerging from the private sector – crypto tokens on the one hand and stable coins on the other. Inevitably, the debate about privately issued digital token money also raises the question of whether central banks should issue their own tokens. This brings me to the last section of my speech, which looks at state-issued digital token money. State-issued digital token money Just like a private institution, a central bank, too, can issue digital token money in its own currency. Essentially, there are two potential areas of application: One, all households and companies could be given access to tokens. Or, two, tokens could be made available only to commercial banks and other financial market participants, just like sight deposits at the central bank today. In Switzerland, the idea of granting all households and companies access to digital central bank money was mooted as an alternative to the Swiss sovereign money initiative. The SNB put out a statement at the time, and remains critical about the idea of broad access to digital  Page 5/7  central bank money. I would like to briefly sum up the main arguments, and point out that the discussion about access to digital central bank money needs to be conducted independently of the technology adopted.

We regularly meet with our counterparts from all over the world at the headquarters of the Bank for International Settlements (BIS), not far from the WWZ, to discuss the challenges facing us. These challenges have always revolved around monetary policy and financial stability. The increasing digitalisation of the financial sector opens up another area for discussion. Against this backdrop, the BIS announced a few months ago that it was launching an Innovation Hub. The aim of the Hub is to study technological developments with the potential to improve the functioning of financial markets and support central banks in fulfilling their mandates. Furthermore, it will provide a network for central banks to exchange knowledge on innovations. One of the Hub’s three regional centres will be in Switzerland, and will be operated jointly with the SNB. The word ‘innovation’ brings me to the subject of my speech tonight. Issuers and types of money Ladies and gentlemen, how do you pay your bill in your favourite restaurant? With cash, card or smartphone? We already have various payment options at our disposal, and these are typically based on cash or book money. In the not-too-distant future you may also be able to pay using a ‘digital token’. Money in the form of a token? What’s that, you may ask? Before we get into the detail, let’s first remind ourselves of the similarities and differences between the various types of money. Given that Basel lies at the intersection of three countries, your favourite restaurant might well be in France or Germany.
The forecast in the main scenario of the Monetary Policy Report means that growth will slacken but will still remain good during the forecast period. I personally was slightly more concerned about the problems in the financial markets and the risk of weaker developments abroad, which would of course also affect developments in Sweden. BIS Review 30/2008  3  As the minutes of the meeting show I was, on the other hand, not quite as concerned about cost pressures as before. Wages did not appear to be rising as quickly as the Riksbank assumed shortly after the new agreements were met last year. The wage forecasts were also adjusted downwards in the Monetary Policy Report. In addition, my opinion was that the slowdown in productivity growth last year was more comprehensible when the publication of National Account statistics for the third quarter showed that output growth had clearly slowed down as early on as at the beginning of 2007. Growth in the number of hours worked did not slacken as output growth. This is the normal pattern when growth slackens in that the labour market typically lags behind somewhat in the economic cycle. I therefore assessed that weaker productivity growth indicates that companies will be more restrictive in recruiting labour rather than that we will see rapid price increases in the future.

In addition, the risk has grown that prices abroad may increase at a faster rate than in the main scenario, which would have an impact on inflation in Sweden also. My international outlook in February We must look at the overall picture when we make our monetary policy decisions. The forecast in the report should be seen as an average forecast, which is always surrounded by a substantial uncertainty interval. In this case it was unusually difficult to have an idea of the probabilities for the different outcomes. Even though the present situation has certain similarities with some previous episodes, the differences outweigh the similarities and there is, therefore, little previous experience to learn from. Prior to the monetary policy meeting in February I felt, and still do feel, more concern over international developments than is reflected in the main scenario of the Monetary Policy Report. My view of international developments did not differ greatly from that of the main scenario in the short-term perspective. However, I was concerned that the financial crisis would be both deeper and more protracted than was forecast. The financial market turmoil continued up to the monetary policy meeting. The problems in the interbank market appeared to have been alleviated to some extent, although interbank rates were still higher than normal and risk premiums in the credit market continued to be high. The turmoil continued to be great and the financial crisis expressed itself in other ways.
Caleb M Fundanga: Zambia’s Financial Sector Development Plan Welcome remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Financial Sector Development Plan (FSDP) Phase II Consultative Meeting, Lusaka, 20 October 2009. * • • • • • •  *  *  The Honourable Minister of Finance and National Planning; The FSDP Steering Committee Chairman & Secretary to the Treasury; Co-operating partners; Chief Executive Officers and Representatives from Banks and Non Bank Financial Institutions; Distinguished Invited Guests; Ladies and Gentlemen. It gives me great pleasure, on behalf of the Bank of Zambia, to welcome you all to the Financial Sector Development Plan (FSDP) Phase II Stakeholders’ Consultative Meeting. Honourable Minister, this very important forum is a demonstration of the recognition, by Government and various stakeholders, of the strategic importance of the financial sector to the country’s development and poverty reduction efforts. Distinguished invited guests, there are a number of strategies currently being implemented by both the private and public sectors to make the financial sector more inclusive, thereby increasing the benefits for the average citizen to participate in the formal economy. The Financial Sector Development Plan is one such Government initiative. The FSDP was aimed at realising the vision of a financial system that is sound, stable and market-based and one that supports efficient resource mobilisation necessary for economic diversification and sustainable growth. Ladies and Gentlemen, various countries have established specific programmes to strengthen their financial sectors.

In business abroad, ordinary earnings improved notably, driven by the strength of business in Latin America. Thus, the Spanish banks with the most international activity obtained ordinary profit in excess of pre-pandemic levels. 10  Between December 2021 and April 2023, the pass-through was 42% in the case of lending for house purchase and to NFCs, and 27% in other lending to households. 11 The year-on-year improvement in this ratio was driven by loans to firms (-1.8 pp, to 9.7%), while the ratio increased in loans to households (by 0.9 pp, to 5.7%). 12  The cumulative decline from the December 2012 peak is 79.6%. 13  ROA excluding the windfall tax on banking sector profits and other extraordinaries rose to 0.83% in Q1. 14  By comparison, net interest income rose by 17.2% between March 2014 and March 2019 and fell by 1.8% between March 2019 and March 2022. 5  Dividend payments amounted to more than € billion in 2022, with a payout ratio of 40%, similar to the pre-pandemic level. Also noteworthy were the rise in earnings per share and the sharp increase in share buy-backs made by some banks, the aim being to subsequently cancel the repurchased shares and reduce share capital, thus providing additional remuneration for shareholders. Solvency After falling by 25 bp in 2022, in 2023 Q1 the CET1 ratio was virtually unchanged on the same period of 2022.
John C Williams: The economic outlook- getting back to "more like normal" Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at One Hundred Black Men of New York, 25 February 2021. * * * Hello, everyone. I’m really pleased to be joining your meeting today. Your work in bringing together leaders and visionaries in support of Black communities across our city is invaluable. We’re approaching the one-year mark since the pandemic took hold. At this time last year there was an increasing sense of fear and uncertainty about the future. And the events since then have posed tremendous challenges to families, communities, and the economy. The ongoing human toll is a tragedy we won’t forget in our lifetimes. What has been an extraordinary public health crisis also has had profound consequences for the American and global economies. The cause of this recession—a global pandemic—means that our economic future will be determined in large part by the path of the virus and our collective success in overcoming it. We still face many hurdles on the road to recovery from both COVID-19 and the severe economic hardship that has ensued. A lot depends on the success in quickly getting a large part of the public vaccinated against a backdrop of the spread of emerging new strains of the virus. Despite these challenges and uncertainties, I have become more optimistic about the mediumterm outlook for the economy.

2/4  BIS central bankers' speeches  The Path Forward While the short-term outlook for the economy is highly uncertain, the longer-term picture is more favorable. With the ongoing vaccine rollout, more people will be able to travel, eat out, and shop in person safely. In addition, the fiscal package enacted in December provides much-needed support to households and businesses until vaccinations are more widespread. Moreover, additional measures are currently being discussed in the Congress. Fiscal support, combined with highly favorable financial conditions and steady progress on vaccinations, are all reasons to be optimistic the economy will experience a strong recovery this year. But the speed of the recovery will also depend on the global picture. We are seeing a slower rollout of immunizations in parts of Europe and a more subdued rebound in other parts of the world, which will have an effect on the United States. In addition, the emergence of new strains of the virus could slow the path to a post-COVID world. Our Response Given all the factors I mentioned earlier, in January the FOMC decided to maintain the target range for the federal funds rate at zero to ¼ percent.
The annual return on the actual portfolio was ½ percentage point lower than the return on the benchmark portfolio. The results were not due to investment in high-risk fixed income instruments. At the end of 2008, as much as 64 per cent of the bonds in the Fund’s fixed income portfolio had the best  BIS Review 58/2009  5  credit rating, AAA, 20 per cent had the second best, AA, while ten per cent were rated A. Five per cent of bonds were rated BBB. Only one per cent of the fixed income portfolio has a lower credit rating. Realised losses as a result of bankruptcies have been low. How then can an excess return become negative from one year to the next? The Fund’s fixed income portfolio is well diversified across different types of bonds and different regions and the active strategies had low correlation in normal markets. However, the financial crisis revealed that these strategies were exposed to more underlying, systematic risk. Correlation was not expected to be high between investments in, for example, Japanese inflation-indexed government bonds, bonds issued by international organisations such as the European Investment Bank, European covered bonds and US mortgage-backed bonds. These experiences and the abrupt turnaround in market liquidity suggest that active management of the fixed income portfolio should be limited and measured on the basis of a number of criteria, as laid down by Norges Bank’s Executive Board. The Fund currently has extensive holdings of bonds that are difficult to trade in today’s market.

This also enhances the expected return on government wealth and contributes to diversification of risk. The Fund is by law fully integrated with the government budget, and the same priorities are imposed on spending from the Fund as on any other government spending. This means that the entire petroleum revenues are transferred to the Fund. Then, as part of the budget resolution, the Norwegian parliament decides on an annual transfer from the Fund to cover the government budget deficit. This procedure effectively prohibits use of the capital in the Fund for purposes not considered sufficiently important to be prioritised in the regular budget process. In 2001, the Norwegian parliament approved new fiscal policy guidelines stipulating that the annual transfer from the Fund to the fiscal budget – that is annual spending of oil money – should correspond to the expected real return on the Fund. The expected real return is estimated at 4 per cent. The point of reference for the spending rule is a normal cyclical situation. In the event of particularly high capacity utilisation, spending should be lower than 4 per cent, whereas in a cyclical downturn, somewhat higher spending may be appropriate. The governance structure is based on a clear division of responsibilities between the political authorities and the operational management. •  The Ministry of Finance is the owner of the Fund. The Ministry defines the mandate and monitors and evaluates performance. Key changes to investment guidelines are presented to the Norwegian parliament before implementation.
Tarisa Watanagase: The Thai economy – risks, challenges, and opportunities Speech by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Foreign Bank Association Dinner Talk, Bangkok, 28 February 2007. *  *  *  Mr. Chairman, Distinguished members of the Foreign Banks' Association, Fellow bankers, members of the press, Ladies and gentlemen, I am very pleased to be here today, and to have this opportunity to share with you some thoughts on the challenges and outlook for the economy and our banking sector this year. This forum has always been one where we can have frank discussions. And I very much look forward to hearing your views. Indeed, open communication is the cornerstone of a healthy working relationship. Today, I would like to focus on three key topics. First, the outlook for the economy, Second, the immediate challenges for the economy and the banking sector, And third, prospects for the Thai economy and the banking system in the medium and longer terms. Let me begin with the economy. Last year was a challenging year for all of us. The economy was buffeted by several negative factors. These included political uncertainties, high oil prices and severe flooding in many provinces. The combination of these factors led to increased upside risks to inflation, especially during the first half of 2006; and downside risks to growth. Domestic demand softened, and robust exports on the back of strong global growth helped sustain the momentum of the economy. Our policy response, namely monetary tightening, proved timely.

But I believe that Thailand will persevere, and that we should continue to take all advantages that globalization has to offer for years to come. Our outlook for the Thai economy in the medium term remains positive. Our forecasts, once incorporating the risks I mentioned, show the Thai economy growing by 4-5 percent in 2007 and by 4-5 percent in 2008. The growth is expected to come mainly from exports, given healthy global conditions, additional government spending, and lower oil prices. These represent a respectable growth outlook for Thailand in light of the challenges and our focus on stability. BIS Review 20/2007  1  But a positive outlook by no means allows for complacency. We must constantly work to identify and manage the challenges. This leads me to my second point. What are the key challenges to the Thai economy in the near term? The first major challenge is that of financial globalization. On the financial system front, globalization brings complex financial instruments that require significant improvement in risk management, and the challenge of meeting international standards of Basel II and IAS 39. These are the manifestation of the forces of globalization that the Thai banking system is already facing, and will continue to face. The overall effect is that the financial system and the economy may be subject to heightened uncertainties. And unless we strengthen our ability to manage these risks and challenges, the vulnerability can exacerbate, with possible implications for our economic and financial stability.
Yet, cautiousness is needed, as once the profitability breakeven is crossed, prices can respond stronger to the overall cycle and wage pressures. Hence, central banks have to be cautious in accommodating, as not always this is warranted by low inflation. Low prices might be a reflection of a more structural features (competition for instance), or cyclical ones (such as profitability). In the first case, the impact of the central bank is constrained, while in the second case – once the impact of the profitability cushion wanes – the monetary accommodation can add to stronger inflation pressures than acceptable. Chart 20: CESEE GDP deflator, unit labor costs and mark-ups (percent change) 15.0  Mark-up, change in % Unit labour cost, change in %  10.0  GDP deflartor, change in %  5.0  0.0  -5.0  -10.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Eurostat, SEE Jobs Gateway Database, National Statistics and Authors’ calculation. Conclusion In the last couple of years we have dealt with the issue of the impact of the monetary policy normalisation, of the ECB in particular, on the region. At the current stance, not only that normalisation is distant, but rather stronger accommodative approach is being employed. The prolonged monetary expansion has called for greater vigilance in the context of excessive risk –taking and debt build-up. At the same time, more scrutiny has been put on the causes of the low inflation that might possible disclose a need for cautiousness in providing monetary stimulus.

The outlook for commercial property prices and rents is uncertain because it largely depends on the future path of economic activity as developments in commercial property markets follow the business cycle rather closely (See Chart 6). Some forecasters expect continued decreases in capital values and rents throughout 2009 and 2010. Turning next to the household sector, although household indebtedness has stabilised over the past six months, the balance sheets of this sector remain a potential source of risk to financial stability. A relatively negative outlook for the labour market and household income is expected to offset, at least partly, the ongoing positive effect of the past declines in interest rates on the ability of households to service their debts. The annual rate of growth in loans to the household sector, especially for house purchase, has further moderated, in line with the weakness of economic activity, the uncertain income prospects and the marked slowdown in house prices (See Chart 7). Indeed, several euro area countries have recorded declines in house prices in the first half of 2009. BIS Review 168/2009  3  IV. Risks in the euro area financial system  Let me now turn to the main sources of risk in the euro area financial system. Investor appetite for risk has begun to return after the first quarter of this year, bringing with it an improvement in market liquidity and a decline in asset price volatility.