samchain/econo-pairs-v1 huggingface dataset:
Mr Noyer focuses on the challenges in Europe as seen from the point of view of the European Central Bank  Speech by Mr Christian Noyer, Vice-President of the European Central Bank, at the University of Antwerp on 26 October 1999. *  *  *  Introduction First of all, I should like to thank the organisers of the Kekulé Cyclus for inviting me to participate in such an interdisciplinary conference bringing together experts from different professional backgrounds. I will contribute to your discussions by focusing on the challenges we are facing in Europe, as seen from the point of view of the European Central Bank (ECB). Let me briefly recall that it was just a little over a year ago that the ECB was established and that for almost ten months now the Eurosystem – which consists of the ECB and the eleven national central banks of the Member States which have adopted the euro – has been responsible for monetary policy in the euro area. The introduction of the euro has been a historic event for the countries concerned, since it is the first time in monetary history that sovereign states have replaced their national currencies with a common currency and transferred their monetary policy competencies to a newly established supranational institution. The new monetary policy regime in the European Union (EU) is not only an important further step in European integration. It will also have far-reaching implications for the world economy and the international monetary system.

Apart from the EU countries participating in ERM II, a number of countries – mainly in Central and Eastern Europe and in Africa – have unilaterally decided to peg their currencies either to the euro or to one of its legacy currencies. Other countries are pursuing managed-float policies, with the euro as the main reference currency, whereas another group of countries is pegging their currencies to baskets of currencies, such as the Special Drawing Rights containing the euro. Against this background, the use of the euro is likely to increase both as an intervention currency and as a reserve currency. As a matter of fact, just like private international investors, central banks may find it convenient to diversify their portfolios to incorporate a currency offering broader investment opportunities than its legacy currencies. Apart from the existence of a large, liquid and integrated capital market, another major prerequisite for the substantial use of a currency by foreign investors is confidence in the long-run stability of its purchasing power. In this regard, internal price stability should provide a sound basis for the development of the euro’s external value in the medium term. By maintaining price stability, the Eurosystem is contributing to the emergence of a solid and stable currency over the medium term, thereby fostering the euro’s international role. Conclusions Coming to the end of my speech, let me quote Mark Twain by saying that predictions should be avoided, particularly those about the future.
Paul Fisher: Current issues in monetary policy Speech by Mr Paul Fisher, Executive Director for Markets and Member of the Monetary Policy Committee of the Bank of England, at the Global Borrowers and Investors Forum, London, 21 June 2011. *  *  *  I would like to thank Ronnie Driver for his help in preparing this speech. Monetary policy is currently a subject of great debate. More so than at any time since the start of the inflation targeting era nearly twenty years ago. That almost certainly reflects the hardships associated with the recession on the one hand and higher inflation on the other, with the resultant squeeze on real incomes affecting the vast majority of us. In this keynote address today, I want to assess some of the reasons why the current conjuncture is proving so difficult for achieving the inflation target. In summary, the nature of the shocks that have hit the economy mean that there is no easy path for monetary policy and the outlook for the economy is especially uncertain. The main message I want to get across, is that there is no magic solution to these challenges. The MPC are trying to set the best path back to the inflation target, but even the best path is an extremely uncomfortable one. Why has CPI inflation been so high recently? CPI inflation has been above its 2.0% target since December 2009, reaching 4½% in April and May 2011.

Goh Chok Tong: Challenges and opportunities for Singapore’s insurance industry Speech by Mr Goh Chok Tong, Senior Minister and Chairman of the Board of Directors of the Monetary Authority of Singapore, at the National Trades Union Congress (NTUC) INCOME 40th anniversary gala dinner, Singapore, 22 October 2010. *  *  *  1. In 1990 and 2000, I had the pleasure of celebrating with you INCOME’s 20th and 30th anniversaries. I am very happy to see that INCOME has grown from strength to strength as it celebrates its 40th anniversary. Naturally, I am anxiously looking forward to your 50th anniversary. Formation of INCOME and adhering to sound principles 2. INCOME was another of the many initiatives of the late Dr Goh Keng Swee. At the “Modernisation of the Labour Movement” seminar in 1969, he mooted the idea of setting up a life insurance co-operative (“co-op”). A year after, INCOME was formed. 3. Dr Goh believed that a life insurance co-op would advance the cause of the labour movement. Such a co-op would be fulfilling a genuine social need. By getting members of the working class to take out life insurance policies at a cost they can afford, the co-op will help them alleviate hardship at times of unexpected events and build up valuable savings for old age. Besides, the labour movement is an inclusive one, bridging different communities, languages and even to some extent, status.
2  Defining dependence as the percentage of natural capital in total capital (i.e., natural, physical, and human) and abundance as the amount of per capita commodity exports in 1970. 2  BIS Review 106/2009  on comparative advantages, but it also induces better practices and technologies, as well as more competition in the markets, all factors that enhance economic growth. On the other hand, we know that Chile is rich in natural resources, especially mining ores, but our dependence on them is ever smaller. Actually, mining exports contribute every year a large amount of resources to the country, but their share of total exports has steadily declined over time, with the exception of the last few years due to the soaring price of copper (figure 3). Another critical element mentioned in the literature, that for Chile is a strong one, is the quality of its institutions. Sound institutions, including fiscal discipline, have prevented the “voracity” effects. A well educated labor force and full access to international capital markets have kept investments in other activities free of barriers, and the real exchange rate, although widely fluctuating, has not been detrimental to the development of the exporting sector. By way of example, and to see the good position we are in now as compared with previous years, let us recall what happened with nitrate.

This has contributed to a well-diversified economic structure and has increased the resilience of the economy to external developments. The financial sector has also seen significant transformation. The restructuring, consolidation, and internal rationalisation of the banking sector is now virtually completed. Governance and risk management practices have also been improved while structural enhancements have been made in the capital market, significantly enhancing its role in the financial system. A comprehensive and robust Islamic financial system now also operates in parallel with the domestic, conventional financial system. Against the background of strengthened economic fundamentals and financial system, Malaysia has taken the opportunity to sequentially deregulate and liberalise the financial system. This includes the introduction of a new interest rate framework that is market-driven,  1/2  the liberalisation of foreign exchange administration rules to promote greater efficiency and enhance risk management in foreign exchange transactions, and the introduction of new foreign players into our financial system. In July this year, Malaysia adopted a managed float for the Ringgit exchange rate to better position Malaysia to respond to structural changes in the global and regional environment. Under this arrangement, the Ringgit is monitored against a basket of currencies of Malaysia's major trading partners. In this world of greater uncertainty, there has been significant focus on the issue of surveillance and risks and vulnerabilities. Experience has shown that surveillance has improved policy performance as well as the ability to take pre-emptive action to contain the impact of disruptive and destabilising developments.
This may be a case of still waters running deep – often the most dangerous time on the river. That is why an essential counterpart to our monetary stance is macroprudential vigilance and activism. Nowhere is the need for that more acute than in the housing market. Balance in housing Across the country, house prices have risen by around 10% over the past year, approaching their early 2007 levels. Price inflation has broadened and accelerated across regions. Expectations that prices will continue to rise are now most marked outside London. There have been some signs of a slowdown in activity, with mortgage approvals falling back to their mid-2013 levels. The Bank is watching closely to determine the extent to which this reflects an underlying slowing of housing demand. However, some of this likely stems from lenders adjusting to the Financial Conduct Authority’s (FCA) tough new Mortgage Market Review underwriting requirements. More worryingly, surveys suggest some slowing could reflect would-be sellers holding back properties from the market in anticipation of higher future prices – an early sign of extrapolative price expectations. The underlying dynamic of the housing market reflects a chronic shortage of housing supply, which the Bank of England can’t tackle directly.5 Since we are not able to build a single house, I welcome the Chancellor’s announcement tonight of measures to increase housing supply.

5  4  Ten years ago, former MPC member Kate Barker estimated that construction of around 260,000 homes a year would be necessary to contain real house price growth at 1 per cent per annum (Barker, 2004). Far fewer have in fact been built in the years since – just 110,000 in 2013. Because housing demand tends to rise more than oneBIS central bankers’ speeches  To be clear, the Bank does not target asset price inflation in general or house prices in particular. It is indebtedness that concerns us. This is partly because over-extended borrowers could threaten the resilience of the core of the financial system since credit to households represents the lion’s share of UK banks’ domestic lending. It is also because rapid growth in or high levels of mortgage debt can affect the stability of the economy as a whole. An economic expansion is more precarious if there are a large proportion of heavily indebted households. History shows that the British people do everything they can to pay their mortgages. That means cutting back deeply on other expenditures when the unexpected happens, potentially slowing the economy sharply. That’s why recessions that follow rapid credit growth tend to be deeper and longer lasting. It is for these reasons that the Bank of England’s Financial Policy Committee (FPC) is mandated to address systemic risks arising from unsustainable levels of debt, leverage or credit growth.
But if wage increases start to pick up more than current forecasts suggest in response to persistently high headline inflation, we are likely to see some combination of stronger consumption growth and higher medium term inflation. This scenario, which I see as quite likely, would reinforce the case for raising UK interest rates to head off inflationary pressures. Economic growth and UK monetary policy The UK’s monetary policy framework is focussed on the objective of price stability, which is currently defined in terms of a 2% target for CPI inflation. There are good reasons why we have made the achievement of price stability the centrepiece of monetary policy here in the UK, and why many other countries follow the same approach. While monetary policy can affect the growth rate of the economy in the short term, over the medium to long term, economic growth is driven by supply side factors – enterprise, innovation, investment and skills. Attempts to boost growth solely by loose monetary policy policies – which we experienced in the 1970s and the late 1980s – ended up creating greater economic instability and almost certainly hampered longer-term growth prospects. The best contribution that monetary policy can make to supporting the underlying forces of growth is therefore by fostering a climate of stability – primarily in terms of the level of prices but also by seeking to promote a relatively stable demand climate and by avoiding potentially destabilising lurches in policy.

And as the EE’s are currently the main engine of growth in the world economy, and the economic prospects of the advanced world are highly conditioned on the economic health of emerging countries, it appears that this is a question of a mutual interest. Improving the home-host cooperation to avoid conflicts of interest between home and host supervisors may also help in mitigating the possible adverse effects. What I have talked above, for sure does not exhaust all the issues, but I think it gives a map of the main points which are being heavily discussed, as they can possibly impair the financial and economic prospects of the EE’s. By now, many shortcomings of the reforms have been identified, and efforts for addressing some of them have already been made. But, the timeline of the financial regulatory changes is rather long. Hence, a continuous discussion on the characteristics of the proposed financial reforms is of a great importance. Discussions and forums in this area can help for a timely identification and removal of the possible weaknesses that can easily evolve into causes of a next (global) financial crisis. 6  BIS central bankers’ speeches
Empirical studies indicate that companies only change the price of goods once or so a year, on average. 2 This could be due to various costs linked to changing the price, for example, printing new price-lists. It could also be due to a fear of losing market shares if the price is raised. 3 If the prices are not changed at all, the effect of the weaker SEK/EUR exchange rate will be that the profit margins for the Swedish cheese importer fall. 4 In this case, sales can be maintained, but profits will fall. The company can also choose something in between these two cases, that is, raise the selling price by between 0 and 15 per cent. The outcome of this will depend on several different factors, such as the currency in which the purchase price is set, to what extent similar substitutes whose purchase price is not affected are available and whether the change in the exchange rate is expected to be lasting or temporary. These factors affect the pass-through of the exchange rate to inflation. What effects can a change in the exchange rate be expected to have on the economy as a whole? The pass-through of the nominal exchange rate on prices is a large area for research. In particular, researchers have studied how much a change in the nominal exchange rate will affect import prices.

This is consistent with the research results; over very long periods of time, real exchange rates appear to “level off” and not show any special trend. In the very long run the theory of relative purchasing power parity thus appears to apply. 23 If the real exchange rate does not have any trend, it will return to its average in the long run. There are thus results in the academic research indicating that real exchange rates fulfil relative purchasing power parity in the very long run. 24 However, these results have little value for those trying to forecast exchange rate developments in the short and medium term. As I mentioned earlier, it is moreover the trade-weighted krona exchange rate that the Riksbank tries to forecast. Figure 5 showed only the development of the krona against the dollar. If we return to Figure 4, we can see that the real trade-weighted krona rate shows  22  Interestingly, there is research indicating that price differences for a Big Mac between countries even out over time in accordance with relative purchasing power parity. See, for example, Cumby (1996) and Parsley and Wei (2007). 23  See, for example, Froot and Rogoff (1995) and Rogoff (1996) for a scientific survey of the research into purchasing power parity. 24  See, for example, Taylor (2002)  10  BIS Review 3/2010  large variations over fairly long periods. 25 The krona is much weaker in real terms at the end of the period than at the beginning of the period.
The improvement we have seen in the economy over the last year and the abovetarget inflation we have experienced point to the need to begin the process of withdrawing the very substantial level of monetary stimulus which was put in place to counter the big financial shocks we experienced in late 2008 and early 2009. Such a policy should not be a threat to the recovery. In my view it is the key to sustaining the recovery. It is the right response to an economy which is growing but experiencing persistent above-target inflation. It would reduce the risk of a future shock to confidence if current above-target inflation does become more deeply embedded and interest rates then need to rise more sharply to combat it. And it would provide more confidence to the public and the business community that the MPC takes its remit seriously and is determined to ensure that this recovery is built on the solid foundation of price stability. BIS Review 134/2010  13

The interactivity between the  2  BIS Review 132/2008  players and the combination of their respective responsibilities should constitute a virtuous basis for a “sound financing of a sustainable economy”. “Sound financing of a sustainable economy” and “financial stability” are mutually reinforcing concepts. I would like to thank you for giving me the opportunity of presenting these considerations, before handing the floor to Ms Kosciusko-Morizet. Minister, please allow me to stress the formidable efforts you have made, both at the national and European level together with President Sarkozy and Mr Borloo, to provide sustainable solutions to the current challenges. You take a long-term view by calling for “a common battle” – these are your own words– in favour of the economy and the environment. This is clearly an “awareness” that we have to share collectively today! BIS Review 132/2008  3
This matters, not for issues of inclusivity or political correctness, but because common, mutually agreed standards are key to facilitating capital flows internationally. And more efficient allocation of capital internationally is vital for the developed and developing countries alike. But we have to recognise, at once, that committees composed of 150 members from every country in the United Nations are unlikely to be effective. To be effective, the standard-setting groups will need to remain relatively small, albeit differently balanced. So we must find methods, in addition to adjusting Committee memberships, which allow us to secure the benefit of the experience of others from different backgrounds. To get this benefit we must create the right sort of opportunities for dialogue, and ensure there is sufficient capacity amongst emerging market countries to propose constructive solutions. Of course Singapore, as a major financial centre, is probably in a position to share skills with others rather than require assistance. Nonetheless, the point remains that emerging markets themselves need to formulate their opinions effectively and to be listened to by the key committees. Formulating an opinion requires both technical skills and organisation. The UK has been active in strengthening the regulatory skill set in Emerging Markets. As a major contributor to the Financial Sector Reform and Strengthening (FIRST) initiative – a $ multi-donor capacity building programme for financial sectors in developing countries – we believe that resources must be both forthcoming and targeted appropriately.

– it would be impossible, I think, to respond with a categorical ‘yes’. There are a number of enhancements which need to be made. In each case there are signs of progress. But there will be a continuing need to push and prod, if we are to overcome the forces of inertia built into the existing cumbersome system. The new Chairman of the Financial Stability Forum will find a sizeable agenda of work in his in-tray. BIS Review 25/2003  7
Although mortgage growth has remained relatively low in 2017 – as in the previous year – developments on the real estate market show a somewhat different picture: price growth in the residential property segment 2 had been falling since 2013, but recently transaction prices have started to pick up again. Moreover, with the exception of a few quarters (including the third quarter of 2017), prices in the residential investment property segment have risen markedly since 2013. As prices over this period have increased more strongly than fundamentals such as rents, risks have accumulated in this segment; it is thus especially vulnerable to a substantial correction in the medium term. This situation is compounded by brisk construction activity in the rental apartments segment, which could lead to oversupply. Signs of this can already be seen in rising vacancy rates. Second, the risk appetite of domestically focused banks remains high. This is particularly evident from the affordability risk data. The share of new mortgages with high loan-to-income ratios has risen significantly in recent years and has reached a historical high. The interest rate risk of domestically focused banks likewise remains high, while their interest margin continued to decline in the first half of 2017. As long as there is pressure on margins, incentives for domestically focused banks to increase risk-taking will remain substantial. Third, notwithstanding the risks in the macroeconomic environment and the banks’ high risk appetite, SNB stress tests continue to suggest that, overall, domestically focused banks’ resilience remains adequate.

However, such turnaround may lead to new concerns and challenges going forward. Today’s event thus provides an opportune occasion for us to deliberate and exchange views on this topical issue. 3. Although latest economic data point to stronger growth momentum and smaller tail risks, uncertainty and short-term threats still remain. For example, the situation in Europe can easily come back to take centre stage thus providing a reality check and a pointed reminder that structural problems take time to resolve. Besides, anti-austerity pressure could delay ongoing reform efforts. This may, from time to time, raise uncertainty and spark volatility in the market. Meanwhile, improving economic outlook in the US needs to be tempered with reality of the fiscal drag and the near-term risk from spending cuts which can come back to hit market sentiment. Thus, we should proceed with care since the market has somewhat overly priced in the global recovery story. 4. The challenges from the great rotation can be viewed in two dimensions. First, risk preference has shifted from safety to riskier assets with the improved global sentiment. Particularly, global stock markets have rallied far beyond the modest global recovery. This can be seen in the MSCI World Index which surged by almost 25% during the last 9 months while global growth remains at low level. 5. Rallies in stock prices on the back of over optimistic sentiment may sow the seeds of potential bubble.