samchain/econo-pairs-v1 huggingface dataset:
The main risk is that inflation expectations stay elevated for a long time. The longer the price growth rate remains high, even if fuelled by temporary factors, the more considerable this risk is. We could already observe this over the recent three months. As regards external conditions, proinflationary risks persist as well. In the first place, they are associated with prices for energy commodities and other commodities. The damper mechanisms protect the domestic market against fluctuations of global prices for commodities. However, an increase in foreign producers’ costs might also affect inflation in Russia. For instance, this happens when we import foreign equipment and vehicles made of more expensive metals. Disinflationary risks are mostly associated with the fact that producer costs might decrease as fast as they have risen. We have recently observed a multifold increase in prices for container shipments. This has pushed up cargo delivery costs worldwide. However, this growth has stopped by the moment. Possibly, even if prices do not decline to pre-pandemic levels, they might adjust downwards considerably closer to their initial level of this year, and later on this will translate into product prices. Another important disinflationary factor is still recovery prospects in outbound tourism. I should focus on the anti-pandemic restrictions that are currently introduced. Last spring, we believed that restrictions would cause a slump in demand, that is, provoke disinflationary risks. This is exactly what happened in the second quarter of 2020.

But before I get into the details, let me say that I believe the LTCM episode and the supervisory response to it is fundamentally about two things: leverage and good judgment. Leverage is a fact of life in our financial world, and is a key part of the risk-taking necessary for the creation of wealth. But sometimes banks go too far in extending credit to their customers and counterparties. That’ s where good judgment comes in. I know - - I’ ve been there. I was a commercial banker for 22 years before becoming President of the New York Fed, and I can tell you that the most important decisions a banker makes are how to lend and to whom. Those decisions are not easy, and often involve many shades of gray. One of our aims as supervisors should be to see that banks are using the right tools to make those judgments. The importance of these issues extends beyond banks and their supervisors. Sound credit policies and procedures are essential not only for the stability of individual banks, but also – and more importantly – for the health of the financial system and the economy as a whole. This is because banks play a pivotal role in our economy as providers of credit. If banks make poor credit decisions with respect to a borrower, including a hedge fund like LTCM, the financial system and our economy will suffer.
And of course, there are other creatures in the wild that we must pay heed to: geopolitical risks like the situation in the Korean peninsula, the South China Sea, and the Middle East. Unlike fairy tales which tend to have a “happily ever after” ending, the real world is characterised by cycles of good times and bad times. Let us hope and work for the former, but also prepare for the latter. And the best way to prepare for bad times is to avoid excesses and build up buffers during good times. 6/7  BIS central bankers' speeches  Thank you, and wishing everyone once again, a good year ahead. 7/7  BIS central bankers' speeches

The Bank and its staff will have to be good at risk assessment, due diligence, assets valuation, good at project financing and management, a good landlord, skillful in project monitoring and have the necessary expertise on specific areas such as construction, agriculture, manufacturing, fishing and other industries. Under this model, the banks created are very specialized with a set of expertise that they are not trained and possess. Its an entirely new “ball game”. Currently 71%, the bulk of financing in Islamic finance is fixed, only 29% is on a floating rate. In conventional, only 26% is fixed. This gives rise to the issue of mismatching. For as long as source of funds for Banks is floating and its asset gives fixed return, the risk of funding cost being more expensive than income is a very real possibility. Rate of Return Risk and DCR will become a challenge to overcome. Would an equity based approach significantly remove such risk? Most likely, it is an area of where the practitioners can develop and explore. Or whether the benefits of equity-based financing would outweigh the risks associated with the obviously higher risks posed by the structure. The shift from asset based financing to equity based financing does not mean that Islamic banks will operate without any risks. Whilst the risk of mismatching between floating and fixed will be greatly reduced, it does also mean that Islamic banks will be taking the unprecedented step of actually owning the assets for which they are financing.
In fact this is not so different from what we have done before. Although we have always decided on asset purchases for a 3 or 4 month period at a time, we have often rolled into further purchases. The total amount is only decided – and then only temporarily – at the point we stop! So we could contemplate a rather longer horizon for asset purchases, even if we continue to cautiously decide on a few months at a time. BIS central bankers’ speeches  7  The majority of the MPC took a view in February not to make any more purchases. I accept that there was a good case to be made for that position, even if on balance I took a different view. But I think we need to keep under review whether there is merit in undertaking more asset purchases under a slightly different dynamic approach. Indeed the February meeting Minutes made it clear that the Committee will keep all its options open. Funding for lending Finally, I want to turn to our most recent approach to credit easing. The Funding for Lending Scheme (the FLS) was launched in 2012 jointly with HM Treasury after we saw that interest rates being charged to borrowers had been rising at a time when our asset purchase programme should have been bearing down on market rates. The principal reason for rising lending rates was that bank funding costs were being kept high by the continuing crisis in the euro area.

One of the main motivations for this rapid research effort is the swiftly decreasing use of cash. Just some two per cent of the money supply is now created directly by the central bank in Sweden, for instance. But even the avant-garde Swedes consider the e-krona a complement of cash, not a fully-fledged substitute. The potential advantages of distributed ledger technology and central bank digital currency are the following: more efficient payment systems, direct and more efficient conduct of monetary policy (perhaps even practically enabling helicopter drop of money) and, if implemented on a sufficiently large scale, an end to the need to run costly deposit insurance schemes. But will central bank digital currency become a complete alternative to cash one day? I’m not sure. Many questions remain: anonymity, susceptibility to cybercrime and IT issues. But above all those, a key issue arises: the problem of competition. Will the central bank change into a direct competitor to commercial banks? Will it serve as a “bank of last resort” for all deposits in bad times? Should it also provide credit to the real economy? Might it become a real monobank, like the ones we saw a few decades ago in former socialist countries? What would the entire money-creation process look like? These questions are too important to rush around. So far it seems to me like social engineering to talk about abolishing cash fully and issuing digital currency instead.
In corporate and labour market circles it is becoming commonplace to consider what the value or social impact of a specific activity is, and to attempt to evaluate the economic and labour consequences of regulatory changes. One good example of regulatory impact is the Ecological Transition Bill that is currently pending parliamentary approval. The aim, as you know, is to switch our economy towards an environmentally more sustainable model. This aim is very broadly shared in our society, but its achievement will have large-scale implications for our productive model that may also entail undesirable social consequences. The Banco de España is working with the Ministry of Ecological Transition to assess the economic and employment implications of the law. I can assure you that measuring these consequences is not proving easy, but also that their measurement is crucial. Why is this? Measuring the consequences is essential in order for there to be genuine transparency. There has to be information; without measurements there is only noise. 2  In the absence of information, we cannot make comparisons between alternative investments, or between consumption, economic activity or funding options. Without data, we are in the hands of image campaigns and good intentions. Responsible investment has an ambitious goal: no less than to transform the economic, environmental and social reality, or at least to contribute to this transformation. So how can this ambitious goal be achieved? The answer is simple: through the behaviour of economic agents, be they households, firms or investors.

We have the collective power to transform reality through our actions, but this power cannot be released if we lack reliable information. It is generally said that information is power. It is hard to find a more illustrative example of the truth of this statement. Much remains to be done in this field, but we should congratulate ourselves on the fact that credit institutions, investors and customers are all exerting growing pressure in favour of increased transparency and information. Naturally, a key factor is that European regulations have also committed to achieving this goal. Noteworthy in this respect are various European standards, such as the European Green Bond Standard (GBS), whose public consultation concluded a month ago, and the longawaited taxonomy that was approved in June this year. Certain private initiatives are also well-known, such as the transparency standards produced by the Task Force on ClimateRelated Financial Disclosures (TCFD) at the request of the Financial Stability Board. These are ambitious standards which take time to prepare and which I often refer to in detail in my addresses. Today, however, I wish to take this opportunity to mention two farreaching and quite new initiatives which demonstrate that there is growing demand for information that will enable us to assess business reality from both a social and an environmental standpoint.
For the medium term, our projections are consistent with the MPR reaching its neutral level towards the end of the policy horizon. The Board has estimated for some time that the neutral MPR is between 4% and 4.5%. This parameter that will also be revised in the June Report. V.4. Risk scenarios  The base scenario that I have just presented reflects the events most likely to occur with the information at hand at the close of this Report. There are risks, however, that, if materialized, may reshape the macroeconomic outlook and the course of monetary policy. On the external front, despite having steadily input lower growth prospects, the risk balance continues to be biased downward. The main risk remains that of an abrupt reversal of financial conditions facing emerging economies, which could be triggered by various reasons, including a more abrupt and widespread slowdown in world growth or the negative evolution of the various geopolitical tensions that have persisted in the recent past. Although in such a scenario the main central banks would probably expand their monetary policies, a lower appetite for risk and declines in commodity prices are also possible, more than offsetting these lower interest rates. At home, it is estimated that the risk balance for both activity and inflation is unbiased. First, the massive immigration of recent years may have a greater impact on growth and inflation.

At home, the recent evolution of demand and prospects for consumption and  5  investment continue to indicate that the economy will narrow its capacity gaps further over the coming quarters. About the magnitude of these gaps, however, the mix between lower headline inflation and strong nonmining GDP imply that they will exceed previous projections, which, as has been noted, is consistent with the expansion of the labor force coming from massive immigration, among other factors. In order to tone down uncertainties about the values of this and other structural parameters used in the calibration of monetary policy, the Board has decided to update these estimates in the Monetary Policy Report next June. V.1. Activity  In our baseline scenario, we expect the Chilean economy to grow between 3% and 4% in 2019. This range runs somewhat below our December forecast (3.25% to 4.25%), due to a poor-than-expected mining performance which, as I just mentioned, is clearly noticeable in the figures early this year. For 2020, we foresee that the economy will grow between 3% and 4%, a little above our December forecast. Finally, in this Report we present the first growth projection for the year 2021, that is, within a 2.75% to 3.75% range. About expenditure, we still estimate that investment will be its most dynamic component, with annual growth over 6% in 2019. By 2020 and 2021, it should decline to around 4%. Consumption will continue to grow at rates consistent with GDP.
Norges Bank is therefore in the process of establishing a clear organisational divide between the investment division for real estate and other investment divisions. A management team for the real estate division has been established and we will appoint a division head in the course of the year. Large real estate investments will be subject to consideration by an investment committee. The largest investments will also be subject to approval by Norges Bank’s Executive Board. The integrated structure for the management and reporting of GPFG performance and risk will be continued. Moreover, the Ministry proposes increasing the number of central bank deputy governors from one to two, and that both function as members of the Executive Board. The Executive Board will in that case aim to establish a risk and investment committee for investment management. The committee will comprise one deputy governor and two of the Executive Board’s external members. The committee will strengthen and improve the Executive Board’s work on overarching risk management of the GPFG, the framework for the GPFG’s real estate management and decisions relating to large real estate investments. The GPFG is a long-term and responsible owner. Our work on responsible investment is an integral part of the investment process. As of this year, the Council on Ethics issues recommendations on company exclusion directly to Norges Bank. Norges Bank’s Executive Board will on the basis of these recommendations assess exclusion against other tools in the exercise of ownership. The aim is to establish a unified chain of tools.

Øystein Olsen: Management of the Government Pension Fund Global (GPFG) Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 4 May 2015. *  *  *  Please note that the text below may differ from the actual presentation. I would like to thank the Chair of the Committee for the invitation to speak on the management of the Government Pension Fund Global. The objective of the Government Pension Fund Global is to underpin long-term considerations in the spending of government petroleum revenues. Norges Bank manages the GPFG with the aim of achieving the highest possible return subject to the framework defined by the Ministry of Finance, including the limitations set for risk-taking. The investment strategy is designed with a view to achieving this aim. The proportion of real assets in relation to nominal assets is the most important choice with regard to the investment strategy. Today, the allocation to equities is 60 percent. The proportion invested in real estate is likely to reach 5 percent in a few years. The Ministry of Finance has started work on assessing the allocation to real estate and the possibility of investing a portion of the GPFG in unlisted infrastructure. We have been requested to provide advice to the Ministry on this matter. Real estate investment, and infrastructure in the event, is more resource-intensive than securities investment, both in operational and management terms.
External sector of the economy continued to be characterised by a positive, though falling, contribution of foreign demand to economic growth. The correction pace of the trade deficit was slower in this quarter. Trade deficit reduced by 1.2% compared to two-digit correction rates recorded in the first half of 2010. This situation of the trade deficit is determined mainly by the acceleration of imports, which marked a year-on-year increase of 10.8% in the fourth quarter of 2010, recording a growth for the third consecutive quarter. On the other hand, Albanian exports increased by 48.8% year-on-year, maintaining high rising rates. The Bank of Albania holds that the Albanian economy will find it difficult to maintain the same growing rates of exports during 2011; among other things, this projection reflects temporary factors that influenced on 2010 growth and is in line with the global economy situation and basic statistical effects. Nevertheless, external demand is expected to generate positive contribution to the economic growth during 2011, as well. 2  BIS central bankers’ speeches  Monetary indicators, financial markets and inflation Performance of monetary indicators continues to generate controlled monetary inflationary pressures on the domestic economy. Money supply increased by 12.5% in December 2010, reflecting a good performance of deposits in the banking sector during the second half of the same year. Our assessments indicate that monetary expansion is in line with the private sector demand for real money.

A good progress of the economic activity and falling risk premia are also reflected on the upsurge of demand for loans by the private sector. Satisfactory parameters of the banking system in terms of liquidity and capitalisation have enabled additional support to the private sector with bank loans. In December, the growth rate of loans to the private sector reached 10.6% year-on-year. In addition to private businesses, which were the main users of credit funding during 2010, positive signals come from household consumers, whose demand for loans increased during the last quarter of 2010. Financial markets are characterised by dropping risk premia and liquidity, reflected in a further decline of yields in the primary market and interest rates in Albanian Lek deposits and loans. In the inter-bank market, short-term interest rates remained close to the key interest rate and showed low volatility. Foreign exchange trading in the domestic market was also calm. The Albanian Lek continued to depreciate in annual nominal terms against foreign currencies, although more slowly compared to 2010. *** Taking into account the information summarised above, the Supervisory Council deemed that inflationary pressures for the medium-term horizon remain contained. Consumer price situation is expected to be under the pressure of price increases in world markets, but, in the absence of second round effects, their impact is expected to be transitional. On the other hand, the actual insufficient demand will continue to condition levels below the potential domestic capacity utilisation, exercising downward pressures on inflation.
The industry plays a key role in helping contain costs and to align the consumers and medical industry towards preventive care measures. This will reduce the burden of individuals in society, especially those less privileged. Further, the world’s population is ageing and Malaysia is not far from this. An ageing population will put pressure on growth and the social protection system. Insurance will have a role to play in ensuring the life, health and pension needs of society are met in a sustainable manner. These demands on the industry are far from trivial and will not be met without strong leadership, a longer-term view on investments in capacity, and a relentless focus on quality standards and operational efficiency. Yet, today these conditions remain hampered by what is still a fragmented industry. It is therefore timely, if not more urgent, for institutions to consider synergistic partnerships to achieve the scale and competitive edge to lift performance and break into new markets. Our economy is in need of transformational change in the insurance sector – not incremental ones. To achieve this, we believe there is room for further consolidation in the industry. Technology and innovation Let me turn to our views on innovation. This industry has no shortage of evidence of its ability to seize opportunities provided by technology to improve itself. In the United States in the 1950s, the life insurance industry was one of the first and largest commercial users of the computer during its formative years.

The effects are more pronounced among lower income groups and micro- and small businesses that are disproportionately impacted by events such as the death or incapacitation of a breadwinner, or business disruptions. Insurance and takaful therefore play a critical role in reducing inequality. This is key and growing risk can be seen in economies that are becoming more prosperous, and at the same time more divided. A well-developed insurance sector also contributes to wider economic efficiency and resilience. At a time where global developments can have a far greater impact on domestic economic performance, it is important for countries including Malaysia, to continue to develop our growth potential through further diversification into new and higher value-added economic activities. Insurance facilitates this by allowing businesses to take risks, without which we cannot have innovation. It also enhances access to financing. This is possible because insurance has the ability to pool, assess and assume risks that are outside the expertise and capacity of banks or businesses themselves to bear. Such examples would be weather-related crop and property insurance, key people risks or product liabilities. Premiums that are paid for insurance also act as strong incentives for businesses to improve risk management, which in turn, increases business resilience. Of course, insurance also plays a key role in the development and resilience of our financial markets. In these recent episodes of heightened market volatility, insurance and takaful companies, alongside banks, have had an important stabilising effect on markets.