samchain/econo-pairs-v1 huggingface dataset:
When energy prices rise faster than other prices, the numerator (CPIF) increases faster than the denominator (the CPIF excluding energy) and the ratio rises. Energy prices rose more slowly than other prices during the period 2012-2016. Since 2016, on the other hand, energy prices have risen faster than other prices in the CPIF. Which properties are desirable for measures of underlying inflation? Which properties are then desirable for measures of underlying inflation? Here are some of those most often discussed in academic literature: 15 The measure of underlying inflation should have the same average as the actual inflation rate. The average for the measure of the underlying inflation should agree with the average of the actual inflation rate. In other words, it is desirable that 15 See, for instance, Clark (2001) for a discussion of this. 8 [19]  measures of underlying inflation neither underestimate nor overestimate the long-term development of inflation, the measure should have the same average as inflation. Policy-makers should thus not be guided by an indicator that can be misleading and can lead to conducting a too tight or too expansionary monetary policy. If the average is the same as for the target variable, it makes communication easier. The measure of underlying inflation should covary with the trend in actual inflation and should have lower volatility. The underlying measure should covary with long-term movements in the target variable.

In it, we distinguished between two types of CBDC: wholesale CBDC that is limited to selected financial institutions, and general purpose currency for use by the public. The report highlighted the potential benefits in wholesale CBDC for more efficient and secure wholesale payment systems, although more exploration will be required to fully understand these benefits. 2 4 . MAS started on our wholesale CBDC journey two years ago when we introduced a digital token representing the Singapore dollar on distributed ledger technology (DLT) to settle interbank debts. Last year, we delved deeper into the problem of decentralised netting while preserving privacy, and demonstrated that these could be solved in the three major DLT platforms Corda, Hyperledger Fabric and Quorum. This year, MAS, Bank of Canada and Bank of England embarked on a project to explore how wholesale CBDC, underpinned by DLT, can be used to address the 25. 5/6  BIS central bankers' speeches  inefficiency that correspondent banking faces. It will identify pain points that commercial banks experience when making standalone cross-border payments, or payments as part of trade financing, securities services and foreign exchange. The project also looks at resolving settlement issues between commercial banks, and settlement of reserve between a central bank and a commercial bank. After these use cases are developed, a technical proof-of-concept will be conducted, building on the success of Jasper and Ubin, which are the DLT platforms from the Bank of Canada and the MAS respectively.
Kevin Stiroh: The theory and practice of supervision Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the SIFMA Internal Auditors Society Education Luncheon, Harvard Club, New York City, 11 April 2016. *  *  *  Introduction Good afternoon. I’m Kevin Stiroh, the head of the Supervision Group at the Federal Reserve Bank of New York. I’d like to thank SIFMA for the opportunity to speak today about the theory and practice of supervision. By way of background, I took over my current role in October of 2015, after spending time in the New York Fed’s Research, Markets and Integrated Policy Analysis Groups, as well as earlier positions within Supervision. I am an economist by training and I spent much of my career studying the performance and function of financial institutions in the U.S., the critical role of bank capital, and the potential link with financial stability. I’d like to cover three topics today related to the theory and practice of supervision. First, what is supervision? Second, why is it necessary? Third, what are some of the emerging issues in the execution of supervision? Before beginning, let me emphasize that my comments today are my own and do not necessarily represent those of the Federal Reserve Bank of New York or the Federal Reserve System. What is supervision?

Asymmetric information also creates issues on the liability side of a bank’s balance sheet. The banks’ creditors – depositors or providers of funding – don’t have as much information about the health of the institution as insiders do. This asymmetry makes banks opaque and inherently fragile, which can subject them to runs. This type of “run risk” has been largely mitigated, at least in the case of retail depositors, by deposit insurance, access to lender of last resort facilities, and other elements of the bank safety net. Importantly, however, a broad safety net weakens market discipline of banks and can create incentives for excessive risk-taking. This contributes to the need for risk-sensitive regulation and supervision. Regulations can control risk-taking through a variety of means such as setting minimum requirements for capital and liquidity positions, while supervision can identify and constrain activities that are not well-captured through regulation but still affect a firm’s risk management, governance and control infrastructure. One common objective is to counter the incentive for excessive risk-taking by intermediaries. •  Externalities A second and distinct type of market failure that creates a need for public sector intervention stems from the externalities that the failure of a large, systemically important bank failure can have on the rest of the financial sector or the economy as whole. For example, the financial crisis vividly demonstrated how the distress of a large financial firm can destabilize broader financial markets and impact other financial firms. These effects can be seen through direct linkages via counterparty exposures.
BIS central bankers’ speeches  7  Figure 1 Inflation indicators (*) (annual change, percent) 8  8 Services EFE  6  6  4  4 CPI  2  2  CPIEFE  0  0  Good EFE  -2  -2  -4  -4  -6  -6 11  Jul. 12  Jul. 13  Jul. 14  Jul. 15  Jul. (*) As from January 2014, the new indexes with annual base 2013=100 are used, so they are not strictly comparable with earlier figures. Sources: Central Bank of Chile and National Statistics Institute (INE). Figure 2 Labor market (percent; annual change, percent) 12  12 Unemployment rate(1)  10  10  8  8 Wages (2)  6  6  4  Employment (1)  4  2  2  0  0  -2  -2 00  05  10  15  (1) Spliced series using monthly variation in February 2010. (2) For nominal wages, average ULC and IREM were used. Spliced series using monthly variation in February 2010. Sources: Central Bank of Chile and National Statistics Institute (INE).

Figure8 Real MPR (*) (9ercent) 8  Brazil  6  8 6  Indonesia  4 2 South Africa  0  Mexico  New Zealand  Colombia  4  Peru 2 0  Chile -2  Australia  -2  (*) Calculated as the current MPR minus inflation expected at December 2016. Sources: Central Bank of Chile and central banks of respective countries. 12  BIS central bankers’ speeches  Figure 9 Total corporate debt (*) (percent of GDP) 125  125  External Debt  Local Debt  100  100  75  75  50  50  25  25  0  09  10  11  13  12  14  15  0  III  (*) Excludes banks. Based on firm-level administrative information. Source: Central Bank of Chile based on Achef, SBIF and SVS data. Figure 10 Corporate financial indicators (1) (percent; times) 12  0,8 Indebtedness (right axis) (3)  9  0,6  6  0,4 Profitability (2)  3  0,2  0  0,0 95  97  99  01  03  05  07  09  11  13  15  (1) Data at December of each year, except 2015 which uses information up to September. (2) Accumulated profits in twelve months before financial expenses plus taxes over total assets. (3) Debt to equity ratio. Source: Central Bank of Chile based on SVS data.
Broken line represents the Riksbank’s forecast in the M PR 2008:2. Sources: Statistics Sweden and the Riksbank  Inflation (CPI) Annual percentage change 5  5  4  4  3  3  2  2  1  1  0  0  -1  -1 00  01  02  03  04  05  06  07  08  09  10  11  Note. Broken line represents the Riksbank’s forecast in the M PR 2008:2. Sources: Statistics Sweden and the Riksbank  BIS Review 100/2008  13  Inflation expectations – 1 and 5 years ahead Annual percentage change 4  4 1 year ahead, all 5 years ahead, all  3  3  2  2  1  1  0  0 96  97  98  99  00  01  02  03  04  05  06  07  08  Source: Prospera Research AB  Wages, productivity and unit labour costs Annual percentage change 10  10 Unit labour costs Labour costs per hour Productivity  8  8  6  6  4  4  2  2  0  0  -2  -2 94 95  96 97 98  99 00  01 02 03  04 05  06 07 08  09 10  Note. Broken lines and columns represent the Riksbank’s forecasts in the M PR 2008:2.

For the world as a whole, the IMF calculated that inflation will rise from around 4 per cent in 2007 to almost 5 per cent in 2008. Inflation expectations have also risen in several countries. The most probable development is that inflation will slow down next year. When adjusted for energy and food prices, inflation has been relatively stable. Normally, inflation slows down when growth slows down, even if this is with some time lag, and our forecast in the Monetary Policy Report is for growth in the world to be lower this year and next year. At the beginning of the summer we were also able to note that, unlike the situation in the spring, monetary policy expectations had swung towards higher interest rates in several countries. A tight monetary policy contributes to dampening inflation. But there is a risk that the inflation process will be more prolonged. It was estimated that growth in the world will continue to be relatively strong, despite a slowdown in the United States and the euro area. In a slightly longer perspective, when the slowdown in the United States and the euro area becomes an upswing once again, there is also a risk that the problem of rising commodity prices will return. Several emerging countries will experience rapid growth for some time to come. 2. Developments in Sweden  Weaker growth and labour market in Sweden Growth will also slow down in Sweden.
Miguel Fernández Ordóñez: Financial integration and stability in Europe Opening remarks by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Conference on "Financial Integration and Stability in Europe", organised by the Bank of Spain, the European Central Bank and the Center for Financial Studies, Madrid, 30 November 2006. *  *  *  Good morning ladies and gentleman. First of all, allow me to welcome you. We are really delighted to host this conference at the Banco de España in Madrid. Some of you are perhaps too young to remember, but it was here in Madrid, in 1989, that the European Council decided to embark on the first stage of Economic and Monetary Union, as envisaged in the Delors Report which was the catalyst for the EMU process. I would like to start my intervention today with a quote from the Delors Report; a quote that refers to financial integration. Simplifying, it said the following: The objective of a single financial area, in which all monetary and financial instruments circulate freely, and banking, securities and insurance services are offered uniformly throughout the area, would be fully implemented through the approval and enforcement of the necessary Community directives. You can appreciate the appealing simplicity of its definition of an integrated financial market: one where all monetary and financial instruments circulate freely, and where banking, securities and insurance services are offered uniformly.

Against the background that I have portrayed in my previous comments, it is clear that central banks have a genuine interest in improving their understanding of how the objectives of financial integration and financial stability, or even macroeconomic stability, interact with each other. I already mentioned that this is an area which is under-researched. Two years ago, the Network on Capital Markets and Financial Integration in Europe identified this gap and decided to include the relationship between financial integration and financial stability in a list of the network’s priority areas, posing a series of stimulating questions aimed at providing some guidance for researchers’ efforts. I think it is useful to recall the five questions posed by the Network: -  First, how can financial regulations be designed so as to be conducive to integration while still ensuring financial stability? -  Secondly, what are the main links between financial integration and contagion? -  Thirdly, what are the mechanisms that can trigger contagion and financial fragility? BIS Review 118/2006  3  -  Fourth, how does competition in the financial services industry affect the ability of the financial system to withstand shocks? -  And finally, how and to what extent do financial crises affect economic activity? As you will have realised, there is an almost perfect correlation between these questions and the main topics of the different papers that make up the excellent and well-balanced programme that the organisers have put together for this Conference.
Inflation has been much lower and more stable since the target was introduced and the new Sveriges Riksbank Act came into force in the 1990s (see Figure 3). Having said that, the good target attainment would not have been possible without an overall reform of the entire stabilisation policy framework. As the 1990s crisis was a sovereign debt crisis, a foreign currency crisis (or monetary policy crisis if one prefers) and a financial crisis, there was a lot of homework to be done. Both monetary policy and fiscal policy came to be reformed in the direction of a more norm-based framework from the 1990s. 17 Wage formation was also significantly improved. 18 For a long time, we were also aided by strong growth under low inflationary pressures. The period from the middle of the 1990s up to the global financial crisis was marked by what is known as ‘The Great Moderation’. Combined with the new framework, the stable macroeconomic environment had clear consequences for how monetary policy was conducted in practice – in the direction of a more ‘minimalist’ system, where the Riksbank controlled the repo rate with the aim of attaining the inflation target. This made accountability relatively simple. There was namely a clear link between a tool – the repo rate – and a target – an inflation rate of 2 per cent. The Riksbank gradually developed so-called flexible inflation targeting – we took into account developments in production and employment without neglecting price stability.

One solution could be to create more flexible groupings within the Fund to discuss particular topics. For example, the Managing Director’s powers to initiate bilateral consultations about the policy choices of individual members could be expanded to cover multilateral issues discussed by the relevant group of members. If this does not prove practicable, other mechanisms will need to be found to introduce the requisite flexibility in how countries come together under the auspices of the Fund. The institution itself, though, also needs to change. The IMF has the great merit of being a universal institution. But it needs greater focus, independence and legitimacy. In terms of focus the members of the Fund, through the IMFC, could usefully restate the Fund’s mandate in terms of global economic and monetary stability. If it is to be able to meet its remit then surveillance should focus at least as much on balance sheets as on exchange rates. The mandate should make clear both what the IMF is responsible for and what it is not responsible for. But producing more focussed surveillance cannot be achieved in isolation from more fundamental reforms of the Fund. In terms of independence the responsibility for the delivery of a new mandate should be placed more firmly in the hands of the management of the IMF. At present, the Board involves itself in every aspect of the Fund’s activities.
In other areas of society, it is not always the case that those who are qualified to make good decisions also have the power to implement them. In the interest of democratic governance there may be good reasons why this is so, but the decision-making process will then require considerable attention. We can concentrate on promoting an understanding of the decisions we make. We must be transparent about what we do, and explain premises, economic relationships and results. Our decisions must be well communicated and understood. If we are unsuccessful in this respect, our reputation may be impaired. Independence, transparency and good decisions are intertwined. Independence is a precondition for keeping promises. Keeping promises was the topic of my lecture here two years ago. 38 We must also communicate and explain interest rate decisions to the public so that they have confidence that we are discharging our duties properly. Transparency is a precondition for accountability and that was the topic of my lecture here last year. 39 Today I have been speaking about how we can arrive at decisions that are good ones. Adequate institutional arrangements, high-quality professionals and appropriate routines are important elements for doing just that. Hans Rasmus Astrup died in 1898, twelve years after this building was completed. Astrup’s two daughters sold the house to the Norwegian Academy of Science and Letters a few years after their father’s passing. They gave the Academy a gift of 106,000 kroner to go towards buying the house. The remaining funds were raised from donations.

The external members are not full-time employees of Norges Bank, and their primary occupations are outside the central bank. In this respect, the Executive Board has an important control function. Its external members can act as a counterweight to any internal cultures of opinion that may arise at the Bank. 28 In some central banks, such as Sveriges Riksbank and the Bank of England, interest rate decisions are made by individualistic committees. Decisions are made by majority voting, with each member individually accountable for his or her vote. There are advantages and drawbacks to both individualistic and collegial committees. As I discussed in last year’s speech, individual accountability can provide good incentives. There is no one to hide behind. At the same time such accountability entails more work and probably full-time employment at the Bank. In that case, the former outsiders may quickly assimilate the internal culture. The control function of the external members might be lost. 6. How do we arrive at a decision? We also need to think carefully about how we should agree on a decision. There two approaches: premise-based or conclusion-based. 29 The two approaches may have different outcomes. Allow me to offer a stylised example. Assume that a three-member committee is to reach an interest rate decision. They base their decision on two premises: inflation and pressures in the economy. The first member believes that inflation has risen more than expected, but finds that the pressures in the economy are broadly as expected. The interest rate should therefore be raised.
While a floating regime plainly provides greater flexibility to attempt to influence the price level (although such attempts may not always succeed), Hong Kong sees no reason to abandon its monetary regime, which has served the economy well for almost twenty years. 4  BIS Review 38/2002  Source: International historical statistics: Europe 1750-1993 / B. R. Mitchell, London: Macmillan Reference; New York, N.Y.: Stockton Press, 1998  BIS Review 38/2002  5

Before the crisis, the National Bank had repeatedly drawn attention to the high leverage of the big banks and warned that their ability to absorb losses was not adequate. These caveats did not result in any voluntary change in behaviour. For this reason, it is essential that our set of preventative instruments for financial stability be improved in three areas; namely, improved access to information, closer involvement in regulatory procedures with regard to financial stability issues, and direct macroprudential decision-making powers. I would now like to take a closer look at these. First, it is crucial that we have all the necessary information quickly to hand in order to identify the build-up of risks in the financial system at an early stage. While the SNB’s statutory authority to compile statistical data is both necessary and helpful, the latest crisis clearly demonstrated that the National Bank must be able to request additional information. With this I mean, for example, quantitative, non-standardised data on banks’ risk exposure. BIS Review 173/2010  1  Unlike FINMA, Switzerland’s financial market supervisory authority, the SNB’s stance is primarily a macroeconomic or systemic one. This is why we must be able to act independently in certain situations when gathering information. At the same time, we also want to keep our access to information to an absolute minimum and avoid a duplication of activities with FINMA. Second, clarification of the SNB’s participation rights and obligations is needed in the area of regulation essential for financial stability.