samchain/econo-pairs-v1 huggingface dataset:
With this area as an important field for trade, Swedish firms have to meet the increased price competition which the monetary union entails without reaping the benefits which their euro area competitors reap from decreased exchange costs and access to a large, liquid market for capital. In order to reduce these disadvantages, firms can try to match their euro income with their expenditures in Sweden, for example for wages BIS Review 68/1998  -6-  costs and payments to suppliers. The exchange risk would then be passed on to domestic players - households and firms - and these in turn would want to pay their bills in euro. How probable is such a scenario? One question is how serious the competitive disadvantages will actually be for export companies. Another aspect that can be discussed is the extent to which households and Swedish-owned companies are prepared to accept an exchange risk. They will want to receive income in the same currency as their expenditures. Otherwise they take an exchange risk that makes the real income uncertain. Even when the monetary union has started, most of the expenditures of households and Swedish-owned companies will presumably be expressed in the national currency. Retailers set prices and accept payments in Swedish kronor. The status of the krona as legal tender means that they are under no obligation to accept payments in other currencies. Moreover, Swedish taxes and households’ fixed long-term loans are paid in kronor.

Even with only one goal and with only one instrument, in theory Central Bank actions can be organized in different ways. For a long time in the past, monetary policy was conducted through the control of monetary aggregates. This practice, however, proved to be increasingly inefficient as economic systems designed new substitutive mechanisms to create money that had not been supplied by the monetary authority. With advances in information technology and its effects on the productive processes of commercialization and of consumption, this element of endogenous money creation made control of money ineffective, which in turn led Central Bankers to abandon the use of targets for monetary aggregates. It is important to highlight that this does not mean that the evolution of the monetary aggregates will be watched or treated carelessly. They are still closely monitored, but they have ceased to be the policy variable. Another choice available to the Central Bank is to conduct monetary policy through the control of the exchange rate, which implies that the focus of the monetary authority is aimed at managing the exchange rate's trajectory. This option has been also abandoned due to its high costs and to its limited effectiveness when the economy goes through significant changes and shocks. The option that has proven to be most efficient to conduct monetary policy is the inflation targeting regime. This system has explicit targets for the monetary authority, which brings transparency to the targets being pursued and allows for reporting to society the absolute commitment to the control of inflation.
They confirm that they intend to adhere to the principles of the Code, and will expect the same of their regular FX counterparties, except where this would inhibit the discharge of their policy functions. Additionally, members of central bank sponsored foreign exchange committees will be expected to adhere to the Code.” Consistent with this support, and in light of our interest in the integrity and effective function of the 3/6  BIS central bankers' speeches  FX market, the New York Fed will be focusing on adherence to these best practices. We are currently assessing our own FX market activities relative to the Code and evaluating what steps, if any, we must take to be able to make our own Statement of Commitment. In addition, we have revisited our own counterparty policy in light of the Code. The Federal Reserve Bank of New York policy on counterparties for market operations had already noted that counterparties were expected to operate in accordance with best practices promulgated by the New York Fedsponsored Treasury Market Practices Group and the Foreign Exchange Committee. However, that policy was recently revised to emphasize adherence to the Code in light of its publication. Finally, adherence to the Code is also being integrated into the membership framework for our sponsored Foreign Exchange Committee. These steps illustrate our desire to transact and engage with entities that are behaving with integrity. Central banks have an important role to play in supporting best practices, such as the Global Code.

As I noted earlier, while the Code is not a set of rules, nor is it regulation, support for the Code and its principles is central to achieving its goals. With that in mind, I would like to turn now to the Statement of Commitment that was developed alongside the Code, talk about steps the New York Fed itself is taking, and then touch upon some of the industry measures underway to support adoption. The Statement of Commitment was developed and appended to the Code to provide a standard tool by which an institution may—on a voluntary basis—demonstrate its commitment to the principles of the Code. The Statement of Commitment provides that an institution is an FX market participant and has reviewed the Code. By using it, an institution acknowledges the principles as reflecting good practice and exhibits a commitment to conducting that institution’s activities in a manner consistent with the Code. The Statement, like the Code itself, acknowledges that market participants vary by size, complexity and nature of activities, and that diversity should be reflected in the steps they may need to take for adoption and adherence. Central banks, similar to FX market participants, are committed to the Code’s adoption as well. Following its publication, BIS central bank governors expressed their support for the Code by noting that central banks “are strongly committed to supporting and promoting adherence to the Code.
It was the first of the three big supply disturbances of the last year or so. Let me start by putting it into context. UK GDP recovered quite rapidly from the precipitous drop of the initial Covid period, but it did not soar away. That’s very different to the pattern of the US economy for instance. Put another way, in the UK we have had two years with very little growth overall. Page 4  The story of the recovery from Covid in terms of inflation had a global dimension. In many advanced economies, the pattern of demand shifted from services to goods, most notably in the US. These goods are much more traded than services, and this put pressure on global supply chains. That pressure was further affected by issues in China with the so-called zero Covid policy, and the impact this had on traded goods prices. The third disturbance has been caused by the actions of Russia in the build up to and subsequent illegal invasion of Ukraine. This is now the largest shock – concentrated in energy and some food prices. It is hitting the least well off hardest because they, necessarily, spend more of their income on essentials, notably food and energy. Recently some of the most outrageous nonsense I have ever heard has been spouted by the Russians, namely that the current global economic problems are caused by sanctions against Russia, not by Russia’s invasion of Ukraine. This is utter rubbish.

Conclusion  6.1 In concluding, let me re-emphasize that technological advances and changing industry structures are two key forces that impact on payment system developments, of which retail payments is a critical component. However, attention to public priorities, i.e. integrity, accessibility, efficiency and the safety of new retail payment methods, has been low. There is, therefore, an urgent need for coordination between policy makers/regulators and the private sector to ensure that they cater to the general public. 6.2 There is a clear role for banks, service providers and technical solution providers in the SAARC countries to take forward the region’s retail payments development. First, we need to understand the environment in which we work by estimating gaps in the systems. The SPC has already begun the preliminary work in this regard. Banks in the SAARC region will have to coordinate with their respective central banks and national payment councils in taking forward the SAARC payment initiative. 6.3 Development of the retail payment system is crucial for the development of financial markets in South Asia, particularly at a time at which faster growth requires supportive financial services. It is necessary for all stakeholders to be involved in the area of payment system development in preparing a realistic agenda within the national jurisdiction, as well as taking into consideration cross country legislation. In doing so, it is essential to understand the critical issues in the retail payments area and try to minimize the inefficiencies and improve safety issues involved in some of the popular payment modes.
Kydland and Prescott showed that room for manoeuvre in economic policy may have a price. The insight they provided was that economic policy can achieve better results if the authorities can commit themselves to a pre-established set of credible policy rules, rather than give themselves the possibility of changing policy at any given time in the future. This was a fundamentally new insight compared with the belief that the authorities had unlimited possibilities for managing the economy, a view that had dominated economic policy in previous decades. 1  Skånland, Hermod (2004): “Doktriner og økonomisk styring. Et tilbakeblikk”, Norges Banks skriftserie nr. 36 (“Doctrines and economic management in retrospect”, Norges Bank’s Occasional Papers, no. 36) (in Norwegian only). 2  See Kydland, F. E. and E. C. Prescott (1977): “Rules rather than discretion: the inconsistency of optimal plans”, Journal of Political Economy 85, 473-490. 3  Lucas, R. E. (1976): “Econometric Policy Evaluation: A Critique” Carnegie-Rochester Conference Series on Public Policy 1, 19-46. BIS Review 4/2005  1  One example used by Kydland and Prescott is what can happen when the authorities impose heavy taxes on capital today at the same time as they promise to lower taxes in the future. If firms believe this, they will increase investment now. However, when the increased real capital stock becomes a fact, the authorities may be tempted to disregard their promise of lower taxes. The purpose of reducing taxes has already been achieved. A breach of promise may be accepted once.

Nonetheless, the real exchange rate is still high in historical terms. There is no doubt that the tight monetary stance has been crucial in maintaining the relatively stable exchange rate over the past year or so. BIS Review 60/2007  3  To fight the overheating of the economy that was brought about by increased investment in the aluminium and power sectors and changes in the domestic capital markets, the Central Bank was forced to raise its policy interest rate, as I mentioned earlier, above the prevailing level in other industrialised countries. In a climate of excess liquidity, historically very low global interest rates and risk-seeking investors, it was only to be expected that investors would notice high-yield instruments in Icelandic currency. So no one need have been surprised when the first króna-denominated bonds, known as glacier bonds, were issued in the global market in autumn 2005. Issuance was driven by carry trades and global investors’ search for yields, and partly also by the demand for credit in Iceland. Despite the great deal of information that is generally available about the economic position and outlook in Iceland, and the Central Bank’s very candid appraisal of the exchange rate of the króna in autumn 2005, which I have already described, it seems certain that many investors in glacier bonds, at least during the first months of issuance, had not examined the potential risks properly.
Suppose one would have claimed at that time that inflation from 1995 and seventeen years onwards would be on average just below 2 per cent and much more stable, and that growth during this period would not be lower than before, but on the contrary somewhat higher. I am pretty sure that one would have been met with considerable scepticism. And very few would probably have characterised a monetary policy that contributed to this as unsuccessful. This is a rather different picture than the one on which the criticism of tens of thousands of “lost jobs” is based. The latter instead appears to view the relatively limited undershooting of the target as a major failure, without any real mitigating circumstances. It also appears to assume that the Riksbank for some reason has intentionally and systematically aimed to attain a lower inflation rate than the 2 per cent it has itself set as the target. It is difficult to see the logic in such behaviour. And it is definitely not something that I recognise after working at the Riksbank at various times over the past fifteen years. Wages not necessarily based on incorrect expectations There are also other objections to the criticism that monetary policy should have cost tens of thousands of jobs. One reason claimed for the unnecessarily high unemployment is that real wages, that is, wages adjusted for inflation, have been higher than they would otherwise have been if inflation had been on target.

But one has to remember that there was no obvious alternative. Inflation targeting was new and untried and not many people were even aware of its existence. Moreover, it was far from obvious that it would succeed where the fixed exchange-rate policy had failed – in establishing an anchor for price setting and wage formation. We now know that it did succeed and moreover that it did so fairly quickly. If I were to choose what I think is the most important contribution of inflation targeting, and indeed its overall main merit, it would be this – that is provides a nominal anchor for the economy.2 It is quite  2  The same conclusion is drawn by Ben S. Bernanke, Thomas Laubach, Frederic S. Mishkin and Adam S. Posen (1999), Inflation Targeting – Lessons from the International Experience, Princeton University Press. 2  BIS central bankers’ speeches  clear from a Swedish point of view that inflation targeting has helped “to put the house in order” by providing such an anchor, and it is probably an important explanation as to why the Swedish economy has developed so well since the crisis in the 1990s. Has the Riksbank systematically set the repo rate too high? But, as I noted, inflation targeting has nevertheless been criticised, particularly in recent years, so let me now move on to this criticism. One criticism is that the Riksbank has an inbuilt tendency to set the repo rate too high.
European Central Bank: Press conference - introductory statement Introductory statement by Mr Willem F Duisenberg, President of the European Central Bank and Mr Lucas Papademos, Vice-President of the European Central Bank, at the press conference held in Frankfurt, 5 December 2002. *  *  *  Ladies and gentlemen, the Vice-President and I will now report on the outcome of today's meeting of the Governing Council of the ECB. We continued our in-depth assessment of monetary, financial and economic developments and the discussions we had in early November on the appropriate stance of monetary policy, taking account of the new information. Overall, since our last meeting, the arguments in favour of a cut in the key ECB interest rates have strengthened. The evidence that inflationary pressures are easing has increased, owing in particular to the sluggish economic expansion. Furthermore, downside risks to economic growth have not vanished. As a result, the Governing Council has decided to lower the key ECB interest rates by 50 basis points. At today's meeting, we also reviewed the reference value for monetary growth, which has an important role under the first pillar of the ECB's monetary policy strategy. The Governing Council has decided to leave the current value unchanged at an annual growth rate of 4½% for the broad aggregate M3.

10  There are exceptions to this division of responsibilities between the plenary and executive sessions. First, whenever a resolution scheme would require the use of the Fund above certain thresholds, which levels depend on what the Fund’s means will be used for, a member of the plenary can within a strict deadline request the plenary session to decide. In such a case, the decision will be taken by a simple majority of the plenary members, but the majority must also represent certain levels of contributions to the Fund. Second, any decision which would involve the raising of ex post contributions from the banks or voluntary borrowing between financing arrangements, among other things, will also be taken by the plenary session. During the transitional period, such decisions require a majority of 2/3 of the plenary members, representing at least 50% of contributions to the Fund. In the steady state, after eight years, the same majority share of the plenary only need to represent at least 30% of contributions to the Fund to take such decisions. 11  This would be the case when the Commission does not agree with the scheme adopted by the Board. In such case, within 12 hours from receiving the resolution scheme from the Board, the Commission may propose to the Council to either: (i) object to the resolution scheme on grounds that there is no public interest of resolution, or (ii) approve or object to a material modification of how much the Fund is used in the resolution scheme.
The initiative of the IFSB to establish the International Islamic Liquidity Management Corporation (IILM) in 2010 is also a major breakthrough in strengthening the liquidity arrangements for the international Islamic financial system, particularly in facilitating more efficient cross-border liquidity management by Islamic financial institutions. The Islamic Financial Stability Forum (IFSF), set up by the IFSB in 2010, is another milestone in strengthening collaborative efforts amongst IFSB members by providing a platform for constructive dialogues for regulators to deliberate on issues relating to financial stability. Seven meetings have been organised since the first IFSF held in Khartoum, Sudan in 2010. A wide range of common issues pertaining to risks to financial stability of the Islamic financial system have been deliberated, all of which have the potential to further solidify global efforts in the areas that will contribute towards safeguarding financial stability. A joint initiative between IFSB and the Islamic Research and Training Institute (IRTI) to develop the Ten-Year Framework and Strategies for the development of the Islamic financial services industry that was released in 2007 has also provided guidance to national authorities in their initiatives to develop Islamic finance within their jurisdictions. A review of the framework was conducted in the recent IFSB-IRTI Roundtable Discussion in Doha and in the Pre-Summit Event of the 10th IFSB Summit two days ago. It is hoped that the assessments would provide further synchronisation to the implementation of the strategies.

The aspirations of ten Central Banks and the Islamic Development Bank – was to lay the foundation for the development of a sound and stable Islamic financial system that will pave the way for its successful integration as a viable and credible component of the global financial system. A decade later, the IFSB has build a solid international reputation as a credible standard-setting body for Islamic finance, with the IFSB charting its achievements in increasing regulatory cooperation, encouraging uniformity of regulatory frameworks and enhancing the monitoring of financial risks in the Islamic financial system. The current global landscape of the Islamic financial system, with enhanced stability and resilience that has contributed to the vibrant growth and internationalisation of Islamic finance is a realisation of the aspiration and vision of the IFSB Founding Members. The efforts are largely attributable to the unwavering commitment and dedication of the members of the IFSB that have relentlessly pursued the goals. The increasing support for the IFSB, signified by its continuous growth of membership over the decade would ensure a progressive continuity in the work of the Founding Members. There are now 187 members from 43 jurisdictions. Malaysia is honoured to host the IFSB here in Kuala Lumpur, and is committed to provide full support in the journey to achieve a sound and resilient Islamic financial services industry.
(http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm )  BIS central bankers’ speeches  Chart 3:  Chart 4:  Changes to US real GDP in crisis periods  Risk appetite(a)  1929 crash 1982 recession  cumulative % change since start of recession 40  Standard deviations from mean (b) 2.5  30  1.5  2008 financial crisis  2 1  20  0.5 10  0  0  -0.5  -30 1  2  3  4 5 6 7 years since crisis  8  9  10  Sources: Global Financial Data, Case-Shiller, Federal Reserve, US government bodies (Department of Commerce, Department of Labor, Council of Economic Advisers) and Bank calculations. -1.5  Credit Suisse  -20  0  -1  State Street  -10  -2 -2.5  04  05  06  07  Sources: Bloomberg, calculations. 08  Credit  09  10  Suisse  and  Bank  (a) Indices are adjusted so that positive numbers indicate increased risk-taking and negative numbers indicate reduced risk-taking. (b) 90-day moving average of standard deviations from mean. Mean and standard deviation calculated from 28 July 2004.

Malmendier, U, and Nagel, S (2011), “Depression Babies: Do Macroeconomic Experiences Affect Risk-Taking?”, Quarterly Journal of Economics, February 2011, vol. 126(1), pp. 373–416. Reinhart, C M, and Rogoff, K S (2010), “Growth in a Time of Debt”, American Economic Review, American Economic Association, vol. 100(2), pp. 573–78, May. Simonson, D G, and Hempel, G H (1993), “Banking Lessons from the Past: The 1938 Regulatory Agreement Interpreted”, Journal of Financial Services Research, pp. 249–267. Tuckett, D (2011), “Minding the Markets: An Emotional Finance View of Financial Instability”, Palgrave Maxmillan. Tversky, A, and Kahneman, D (1974), “Judgement under Uncertainty: Heuristics and Biases”, Science, New series, Vol.185, No 4157, pp. 1124–1131. BIS central bankers’ speeches  7  Chart 1:  Chart 2:  Changes to UK real GDP in crisis periods  Recessions and recoveries  1929 crash  cumulative % change since start of recession  1990 recession  Interquartile range financial recessions  16  2008 financial crisis  Financial recessions  Mean time to trough  Normal recessions  Mean time to trough Index: GDP peak = 100 106  12 8  104  4  102  0  100 98  -4  96 -8 0  1  2  3 4 years since crisis  5  6  Sources: Office for National Statistics, Thomson Reuters Datastream and Bank calculations. 8  0  1 2 Years from peak in output  3  Sources: International Monetary Fund and Bank calculations.