samchain/econo-pairs-v1 huggingface dataset:
That being said all central banks, in periods like this where you have inflationary threats that are coming from commodities, have to go through the hump and be very careful that there are no second-round effects. This is what we are doing. WSJ: When you hiked rates in 2008 there were signs of those second-round effects. Do you see evidence they are starting to take hold in Germany or elsewhere? TRICHET: At this stage, we do not see this. And everybody knows we would not let secondround effects materialize. We will continue to deliver price stability. WSJ: Could the ECB raise interest rates while still maintaining nonstandard measures including unlimited loans to banks? TRICHET: It is our doctrine since the beginning of the turbulence that interest rates on the one hand and non-standard measures on the other hand are decoupled. We design the monetary policy stance; we decide interest rates to deliver price stability in the medium term. Non-standard measures are there to help restoring a better functioning of monetary policy transmission. We are disconnecting both measures. We can move interest rates on the one hand, and we can move non-standard measures on the other hand independently. WSJ: Euro member states are working on comprehensive measures to address the debt crisis. What elements should be in that package? TRICHET: These decisions are the responsibility of governments. We have in particular a very strong message, which is that we need a “quantum leap” in the strengthening of governance of economic and fiscal policies.

The architectural concept of Sasana Kijang is also inspired from our earliest form of currency that was used in the third century and which denotes a harmony of simplicity and class. And the facade design of the building is derived from the geometric patterns of the traditional Malaysian songket fabric which is woven with intricate gold and silver threads which creates a strong bond, thus giving the fabric its strength and elegance. This is similar to the Central Banking community that is interlinked through our similar objectives and bonded through collaboration and strategic alliances. Other features of the building is the extensive use of glass which allows for the greater use of natural light. The building also features a range of green technologies as part of our commitment and responsibility to the environment. Finally, another important part of Sasana Kijang is the Bank Negara Malaysia Currency and Economics Museum and the Art Gallery that will be opened to the public. These collections that have been built since the earliest days of our Bank over a period of more than five  BIS central bankers’ speeches  1  decades aim to foster greater understanding on the history of our currencies and of our economy and financial system, and also represents our support to contemporary art in Malaysia and thus contribute towards preserving the heritage of our country. Allow me now to invite Yang Amat Berhormat, Dato’ Sri Mohd. Najib bin Tun Haji Abdul Razak to deliver his address and to officially launch Sasana Kijang.
Let me conclude the answer to this first question by emphasising that my reasoning is anything but new, even if some of the examples are, and there is new empirical research to rely on. The Swedish Trade Union economist Gösta Rehn argued in the 1950s and 1960s that full-employment policies must be combined with a tight demand policy. Wage formation could function well only if demand was restrained and the rules of the game were obvious. He also waged a battle for many decades against inflation for reasons of distribution under the slogan, “Hate inflation”. Substantial, arbitrary changes in income and wealth pose a threat to “the cement” in our society and thereby to the democratic system. Question 2: Why has inflation been allowed? Average inflation in Sweden has been low over a very long-term perspective. That changed after the Second World War, both in Sweden and in the majority of other industrial countries. During the 1960s, 1970s and 1980s, inflation was on a rising trend and at the same time fluctuated considerably. Not until the 1980s was the growth in prices stabilised in many parts of the western world. In Sweden, this stabilisation has come about in the 1990s. (Diagram 2.

This picture of how the economy functioned was modified in the 1970s. The economies in many western countries at that time evinced both high inflation and high unemployment. In fairness it should also be mentioned however that the oil price shocks also contributed to the high inflation that decade; not all problems were a consequence of the failures of stabilisation policy. Now most economists and political decision-makers accept that only in the short term is there a trade-off between inflation and employment. Real wages can be reduced owing to unexpected inflation and employment will thereby be stimulated. But when this pattern is recognised – as will very likely happen after a while – inflation expectations adjust to the new, higher inflation rate. Then the positive effect on growth disappears and employment reverts to its previous level. All that remains is a higher rate of inflation. In other words, in the long term there is normally no positive relationship between employment and inflation. Instead employment in the long term is decided by such conditions in the real economy as technological and population developments or labour market efficiency. However the temptation to use monetary policy to stimulate employment still exists. Even for a government that knows that the long-term effects of increasing demand a little too much are undesirable, it can be tempting in the short run. The very fact that this possibility exists has made it more difficult to instil confidence in a policy of low inflation.
The second principal-agent problem, between firms and the authorities, is different in kind but similar in consequence. It arises because of a familiar public policy problem – timeconsistency. If the ex-post failure of an institution risks destabilising the system, any ex-ante pre-commitment by the authorities to let it fail will lack credibility. This is simply a variant of the old adage that if you owe the bank a small amount it is your problem, a large amount it is theirs. These days, if a bank owes a small amount it is their problem, a large amount it is the authorities. This time-consistency problem weakens incentives for banks to consider for themselves large-scale risks to their balance sheet which might induce failure. The safety net becomes a comfort blanket, the backstop a balm. And the greater the risk these institutions themselves pose in the event of failure, the weaker the incentives to manage risk. These are topsy-turvy incentives from a public policy perspective, with risk management discipline weakest among those whom society would wish it to be strongest. And the evidence? A few years ago, ahead of the present crisis, the Bank of England and the FSA commenced a series of seminars with financial firms, exploring their stress-testing practices. The first meeting of that group sticks in my mind. We had asked firms to tell us the sorts of stress which they routinely used for their stress-tests.

Andrew G Haldane: Why banks failed the stress test Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Marcus-Evans Conference on Stress-Testing, London, 9-10 February 2009. I would like to thank Geoff Coppins, Harry Goodacre, Nigel Jenkinson, Salina Ladha, Iman van Leyveld, Jack McKeown, Joe Noss, Adrian Penalver, Nick Vause and Matthew Willison for contributions and comments. *  *  *  By any historical standard, the financial crisis of the past 18 months has been extraordinary. Some have suggested it is the worst since the early 1970s; others, the worst since the Great Depression; others still, the worst in human history. Time will tell. Risk managers are of course known for their pessimistic streak. Back in August 2007, the Chief Financial Officer of Goldman Sachs, David Viniar, commented to the Financial Times: “We are seeing things that were 25-standard deviation moves, several days in a row” To provide some context, assuming a normal distribution, a 7.26-sigma daily loss would be expected to occur once every 13.7 billion or so years. That is roughly the estimated age of the universe. A 25-sigma event would be expected to occur once every 6 x 10124 lives of the universe. That is quite a lot of human histories. When I tried to calculate the probability of a 25-sigma event occurring on several successive days, the lights visibly dimmed over London and, in a scene reminiscent of that Little Britain sketch, the computer said “No”.
And a final question: how is the Spanish banking system dealing with the banking union project? Unquestionably, the banking union project entails appreciable challenges for the whole European banking system. In particular, the single supervisory mechanism inevitably involves the need to adapt to new rules, criteria and procedures for interacting with supervisors. Furthermore, the new resolution regulations, and particularly the burden-sharing procedures (along with the changes soon to be made to the solvency regulations), may affect the composition and cost of bank liabilities. All in all, the Spanish banking system will foreseeably not face more complex challenges than those being posed in other jurisdictions, thanks to the unprecedented reform  4  BIS central bankers’ speeches  implemented in the past year following the assessment commissioned from an external consultant within the framework of the financial assistance programme. The significant reduction of the exposure to the real estate sector through the substantial increase in provisions and the entry into operation of Sareb made it possible to defuse one of the main sources of vulnerability of the Spanish financial system. Also, the quality of assets and, in particular, the accounting treatment of restructured and refinanced loans, were reviewed. Finally, banks’ solvency ratios were notably strengthened. Currently, all banks meet the capital requirement of 9% according to the EBA definition, generally by an appreciable margin.

As in the past, in this latest episode the structural deficiencies identified are partly linked to a deficit of cohesion among the national economies that can only be remedied through further relinquishing of sovereignty. Perhaps the relative novelty of the recent crisis in the monetary union is that it shows, with particular seriousness, that any delay or lack of resolve in adopting the necessary reforms would not only be harmful to European construction but would generate very pronounced risks to economic and financial stability in Europe and the rest of the world. Admittedly, major reforms to monetary union governance have been made to date. I refer, for instance, to the new requirements made of domestic policies to contain macroeconomic imbalances in several areas, to the surveillance mechanisms established for these requirements and to the setting in place of national crisis-management systems, with centralised financial support arrangements for those countries most affected. However, such progress is not sufficient to ensure the proper functioning of a common monetary area. One of the main manifestations of the shortcomings observed is the continuing market fragmentation within the euro area. This is, namely, the existence of a country-risk component that means that markets assign different valuations to similar financial assets on the basis of the issuer’s nationality. In particular, the perceived risk of financial institutions’ liabilities depends to some extent on their geographical location.
01.06.2022  Parliamentary testimony: presentation of the Banco de España Annual Report 2021* Economic Affairs and Digital Transformation Committee Pablo Hernández de Cos Governor *iEnglish translation to the original in Spanish  *  Mr Chairman, ladies and gentlemen: I appear before this Committee to present the Annual Report 2021 of the Banco de España. The report offers an analysis of recent developments in the Spanish economy within the global setting, as well as how it is likely to perform in the future and the challenges it faces. I should like to begin by describing how the Spanish economy performed and the role played by economic policy in 2021. Next, I shall present the economic outlook following the new shock triggered by the Russian invasion of Ukraine, before going on to describe the key aspects of the sharp rise in inflation and outlining my thoughts about the role that economic policy must play to meet the short-term challenges. I shall then discuss the main mediumterm challenges and the recommendations that, in the Banco de España's view, it would be desirable to implement, to tackle them. Lastly, I shall address the situation of the banking system, by summarising the main messages from our latest Financial Stability Report, published in April. Performance of the Spanish economy in 2021 The recovery in activity that started in the summer of 2020 continued at the global level during 2021.

It is not optimal to pre-commit to any specific interest rate path, much less so in the current highly uncertain context. We will act with total flexibility and adopt the measures needed to fulfil our mandate and contribute to safeguarding financial stability. Along the path to a more neutral interest rate configuration, flexibility is particularly important to preventing the emergence of threats to the correct transmission of monetary policy throughout the euro area. The pandemic has shown that, under stressed conditions, flexibility in asset purchases helps to effectively counter these threats. Within our mandate, this flexibility will remain a key element of our monetary policy. In step with the communication of this process of monetary policy normalisation, market expectations of policy rate hikes have been brought forward since December. The prospect of a normalisation of the monetary policy stance has likewise been reflected in an upturn in short and long-term interest rates in the euro area. Specifically, the 10-year OIS rate, which proxies the euro area risk-free interest rate, has risen by about 133 basis points (bp) since the beginning of the year, while the 12-month EURIBOR has increased by 85 bp. Meanwhile, the risk premium on Spanish government debt increased by 34 bp in this period. European policies European policies are playing an increasingly important role in contending with common shocks to the European Union (EU) economies as a whole. This was thrown into relief when the pandemic broke out and NGEU was launched, among other measures.
What, I think, is more useful for businesses to hang on to is our expectation that when Bank Rate does rise, it will probably do so only gradually and to a level that is likely to remain materially below its pre-crisis average of 5% for some while – I have something like a 2–3% range in mind here. That reflects three factors. First, the process of private and public balance sheet repair will continue to weigh on domestic demand for some time, while the recovery in the euro area – our main export market – is likely to remain muted. Second, global longer-term safe real interest rates fell in the years before the crisis, reflecting in particular the unusually high saving rates in China, and this is likely to persist. Third, the spreads between risky market interest rates and Bank Rate are unlikely to return to their excessively compressed pre-crisis levels. So even if we start to withdraw some of the exceptional monetary stimulus in the not too distant future, you should not expect Bank Rate to shoot straight back up to pre-crisis levels. It is now five years since we cut Bank Rate to its historic low of 0.5% and launched our asset purchase programme (QE). Those five years have been tough for both businesses and households. But they surely would have been even tougher had we not taken that action.

Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 1 March 2012. *  *  *  Today, on 29 February 2012, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on the analyses of Albania’s latest economic and monetary developments and following discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to keep the key interest rate unchanged at 4.50%. The Supervisory Council deemed that this decision provides the appropriate monetary conditions to meet the inflation target over the medium term. Moreover, it provides the necessary monetary stimulus to the economy in Albania. (Let me now proceed with an overview of economic developments and main issues that were discussed at today’s meeting). *** Annual inflation rate was 1.6% in January, slightly down by 0.1 percentage points compared with the previous month. The annual inflation rates have been pursuing a downward trend since the second half of 2011, reflecting the mitigation of inflationary pressures from the supply side: cancelling out of effects from administered price rise; increase of domestic agricultural production; and slowdown of imported inflation. The downward annual inflation in January reflected the further decrease of imported inflation from the external sector of the economy, materialised in the lower contribution of the prices of processed goods and foods.
When it is widely expected that prices will continue rising rapidly, that may also have a self-reinforcing effect on inflation. The chart shows inflation expectations one, two and five years ahead in Norway among households, firms, specialists in economics and the social partners (Chart 6).9 Over the past year, inflation expectations over the next few years have shown a clear increase. Longer-term expectations have increased less. 8. Studies that compare price dynamics in periods of low inflation with periods of high inflation are consistent with such an interpretation. See Fredrik Wulfsberg (2016). "Inflation and Price Adjustments: Micro Evidence from Norwegian Consumer Prices 1975–2004." American Economic Journal: Macroeconomics, 8 (3). See also the box “Uncertainty about price dynamics when inflation is high” in Monetary Policy Report 4/2022. 9. Inflation expectations one and two years ahead are an average of expectations among households, firms, specialists in economics and the social partners. Only specialists in economics and the social partners are asked about inflation expectations five years ahead. Norges Bank  Economic perspectives 2023  8  Chart 6 Inflation expectations have increased Inflation expectations ahead. Percent 5.5 One year ahead Two years ahead Five years ahead  5 4.5 4 3.5 3 2.5 2 1.5 2002  2004  2006  2008  2010  2012  2014  2016  2018  2020  2022  Sources: Epinion, Ipsos, Opinion and Statistics Norway  The expectation that inflation will be high one year ahead is not necessarily a warning signal.

Global supply chain disruptions lead to a rise in prices for a broad range of goods. When the pandemic restrictions are lifted, economic activity quickly rebounds in both Norway and other countries. The unusually high level of saving during the pandemic gives an additional impetus to demand. And two years after the onset of the pandemic, the Norwegian economy is operating above potential. On 24 February 2022, Russia invades Ukraine. Energy and commodity prices soar. Sharp price increases for important goods hit an economy already in high gear – reminiscent of developments in 1973. Higher energy prices and input costs have pushed up business costs, which in turn have spilled over into consumer prices. The surge in inflation also reflects strong demand and little spare capacity in the Norwegian economy. Unemployment is very low, and many Norwegian firms have reported labour shortages. Wage growth has accelerated and in 2022 was at its highest since 2008. Strong demand may have made it easier for firms to pass on higher costs to their own selling prices. A sharp rise in prices can also be self-reinforcing. When we analyse inflation in Norway, we find that a rise in the prices of some goods more readily leads to a rise in prices of other goods when inflation is high than when inflation is low.8 Some of the firms in our regional network point out that customers more readily accept a price increase when many other prices rise.
We believe that our approach of setting the targets and forecasts rather than forecasts alone on a declining path involves a firmer commitment on behalf of the central bank; therefore it is more transparent and more effective in anchoring inflation expectations. 2  BIS central bankers’ speeches  Dear guests, Being a central banker, I have mostly focused on inflation and monetary policy dimension of commodity price movements. Needless to say, the course of commodity prices has implications on many other key macro variables. For example, as a net energy-commodity importer, Turkey’s dependence on energy imports makes the current account balance more sensitive to volatility in commodity prices. Recent uncertainty surrounding the energy market is not comparable to any other period in the near history. Moreover, there is a significant risk that commodity prices stay volatile due to uncertainties regarding global economy and the exceptionally loose monetary policies across the globe. Therefore, medium-term outlook for commodity prices is unusually hard to predict. In the long term, supply conditions and structural policies should adjust to stabilize the energy and other commodity prices. The recent concrete steps as part of the medium term programs in Turkey, aiming at curtailing the dependence on energy imports by switching towards domestically produced and renewable energy sources, have important implications also for decreasing the sensitivity of current account balances to international price movements.

This reflects a number of developments. First, the influx of workers from abroad, including from the European Union accession countries. The precise figures are very uncertain, not least because people come and go a lot, but recent research 4 estimates that 2005 probably saw the largest ever entry of foreign workers to the UK, totalling around 400,000 – equivalent to around 1.5% of total employment (although outflows have probably risen, too). In addition, older workers are increasingly likely to stay in work – people above pensionable age accounted for a quarter of the growth in the work force over the past year; and Government policies are encouraging people on benefit back into work. The result has been that the labour force participation rate, the number of people in work and the number who are unemployed have all been rising at the same time – a fairly unusual combination. A faster growing labour force potentially raises the amount the economy can produce. Rather like raising the economy’s speed limit, it implies that it can grow faster without hitting supply constraints and generating inflationary pressure. That may be the situation right now. In any event, putting all this together with the impact of energy-related price movements, I do not read the fact that inflation is currently above target as convincing evidence that the economy is overheating. 4  “Foreign labour in the United Kingdom: current patterns and trends”, John Salt and Jane Millar, Labour Market Trends, Office for National Statistics, October 2006.