samchain/econo-pairs-v1 huggingface dataset:
After assessing these risks, which originate both domestically and abroad, the Board estimates that the risk balance is unbiased for inflation and downward biased for output. Inflation is high now, but it is expected to approach 3 percent over the course of 2015. Domestic output and demand continue to show significant weakness and growth prospects for 2015 have been revised downwards, despite that both monetary and fiscal impulses are significant, and the external impulse will be slightly larger than what we saw this year. The Board led the policy rate to 3 percent and stated that future changes to it would depend on the evolution of internal and external macroeconomic conditions, and their implications on the inflation outlook. At the same time, it reaffirmed its commitment to conduct monetary policy with flexibility so that projected inflation stands at 3 percent over the policy horizon. The Financial Stability Report (IEF) Our Financial Stability Report (IEF) discloses, twice a year (in June and December), those recent macroeconomic and financial developments that might influence the financial stability of the Chilean economy. Let me now briefly describe some of the main subjects covered in this last issue. The same scenarios for external risk I just described are analyzed in the IEF. From the standpoint of financial stability, we conclude that as the process of monetary policy normalization in the United States advances, financial volatility episodes may follow. The expansionary policies have helped to shape the current environment of low risk premiums and low volatility.

Figure 10 Companies' financial indicators (percent) 120  9  100  8  80  7  60  6  40  5  20  4 07  08  09  Debt/GDP (1)  10  11  12  13  14.III  Profitability of SVS companies (2)  (1) Based on firm-level information. 2007 and 2008 figures estimated using aggregate data. (2) Profits accumulated in 12 months before financial expenses and taxes on total assets of nonfinancial SVS companies. Source: Central Bank Chile based on Achef, SBIF, SII, and SVS data. BIS central bankers’ speeches  13  Figure 11 New home prices and office-space vacancy rate (Metropolitan region) (index, 2008 average = 100; percent) 150  12  140  10  130  8  120  6  110  4  100  2  90  0 08  09  10  Housing prices CChC  11  12  13  14  Office-space vacancy rate  Source: Central Bank of Chile based on Global Property Solutions and CChC data. Figure 12 Household indebtedness and financial burden (percent of disposable income) 60  18  55  16  50  14  45  12  40  10 06  07  08  09  Debt-to-income  10  11  12  13  14  Financial-burden-to-income  Source: Central Bank of Chile based on SBIF, SuSeSo, and SVS data.
A combination of insights, leadership, technical capacity and adequate preparation needs to be channeled into a general enthusiasm for both our regions to rise to the potential challenges and in the process become greater partners for success. In summary, the future direction of the ASEAN-EU relations will be dependent on several multidimensional facets that would include: the changing strategic landscape amidst globalisation, ASEAN's and the EU's desire to play a greater role in the global economy and international affairs, the EU's ability in managing its enlargement process, and ASEAN's commitment to forge greater regional integration. I am certain that the passage of time and closer analyses of the issues discussed at this Conference will yield more lessons that we could take to heart in making progress on expanding ASEAN-EU economic and financial links. It is my hope that in the future we can continue to have such constructive exchanges of views and experiences that will further nourish the broader learning environment. In closing, allow me to thank the speakers for enriching the Conference with their presence and their cutting-edge perspectives. I also wish to again thank the European Commission for giving Bank  1/2  Negara the opportunity to co-host this Conference. To all our participants from abroad, we hope you stay in Kuala Lumpur has been pleasant, and we wish you a safe journey home. 2/2

First, it is very clear that “shadow banking” is not the same as the non-bank financial sector. This is not a debate about the appropriate regulatory framework for the whole of finance. For example, the vast majority of hedge funds are not shadow banks, and don’t trade in the credit markets or especially illiquid markets. Second, non-bank intermediation of credit is not a bad thing in itself. Indeed, it can be a very good thing, helping to make financial services more efficient and effective and the system as a whole more resilient. We must remember that as we make policy. But, as we know from this crisis and from previous ones, true shadow banking can weaken the system. Regulatory arbitrage, which is always with us, can distort and disguise channels of intermediation. That leads me to my third general point. Shadow banking comes in lots of shapes and colours. There are degrees to which any particular instance of shadow banking replicates banking. The liquidity offered by some shadow banks relies pretty well entirely, and more or less openly, on committed lines of credit from commercial banks. In these cases, the liquidity insurance offered by the shadow bank is “derivative”; there is a real bank in the shadows. But for other shadow banks, liquidity services are offered without such back-up lines. In those cases, claims on the shadow bank have, in effect, become a monetary asset.
The Banco de España is shortly to approve a circular in which it will make these tools operational, following the mandate granted by the legislators. In our case, these tools may also be applied to loans to firms, in line with best international practices. Macroprudential policy and monetary policy This description of how macroprudential tools operate highlights the fact that, although monetary and macroprudential policy do not, a priori, share the same objectives, they do share certain transmission mechanisms, such as the bank lending channel. In this respect, monetary and macroprudential policy decisions generate interconnected effects, which may boost or counter one another. Specifically, monetary policy can promote financial stability through different channels. For example, at times of credit exuberance, a restrictive monetary policy would reduce the demand for credit and the level of risk assumed by agents [see, for example, Borio and Lowe (2002)]. It might also tighten financing conditions on markets and temper the prices of financial and real assets, many of which comprise the main collateral for credit transactions. Logically, given the nature of monetary policy, its effects would be aggregated, without being able to discriminate between agents or markets. When risks materialise, in recessions, an expansionary monetary policy would help debtors to meet their financial obligations, it would improve banks’ financing conditions and it would reduce the downward pressure on financial and real asset prices. Effectiveness in the transmission of monetary policy, i.e. central banks’ capacity to influence the private sector’s financing conditions, largely depends on financial stability.

D.  Concluding remarks  To date the European Union faces several complicated but well-known economic policy problems from the recent past. Estonia as the future EU member state must take this into account. It is not enough to be able to overcome challenges on the WAY to the European Union. We must become equal partners to other European states, be able and willing to participate in the discussions on the monetary and fiscal policy issues, perceive Estonia in Europe and Europe in Estonia. Today the European Economic and Monetary Union within which 12 states have adopted the single currency, offers a historic chance to create a truly strong, flexible and efficient economic area. I believe that potentials of the single currency will be exploited in the best possible way. It would serve the interests of the current as well as future member states and the whole of Europe. BIS Review 51/2002  7
Governance of the information that firms have on customers is a particularly important issue. It appears reasonable that, if it is considered necessary for this information to be available to all operators, such an obligation should have no exceptions, and that its scope should be clear, always observing customer rights. BigTech also exerts pressure on the sector’s profitability, which is already weakened by the impact of the pandemic and by developments in the wake of the global financial crisis. To improve matters, banks should pursue efficiency gains, cutting costs and using new technologies more intensively. In particular, they should refine the use of the information they have, which enables them to improve their business model without raising their risk profile. Consolidation processes may also be useful, though an evaluation of the merits of each proposal is needed, particularly regarding the impact on financial stability. European transnational operations would be particularly positive, given that they would help further the Banking Union. As you can see, the to-do list is an ambitious one, given both the number of tasks and how demanding they are. This is why we must set to work as soon as possible, mindful that the rewards are substantial. Accomplishing these tasks is a job for all of us: authorities, legislators, firms and citizens. We can all contribute to reducing uncertainty when it comes to foreseeing how the future will be.

There is also another simple but important reason why people as well as the politicians elected by them would want to continue to spend beyond their means even though they realise that they could not afford to repay the debts in their lifetime. This is what I would like to call the “collective irresponsibility” syndrome. A father or mother will do almost anything to protect their children. Some would be prepared to sacrifice their happiness and even lives for their children. It is only in great desperation, such as the great famine in China depicted in the movie “1942”, that we would witness children being sold by their starving parents. But that was a very extraordinary and tragic situation. We can hardly say that the developed world is now in that desperate situation. There is an interesting point here: when a parent mortgages his child, he is accountable for this brutal and inhumane act. However, when a voter elects politicians who promise continued and unsustainable spending he is just one of many, many voters. The vote is cast in anonymity and the voters have no direct accountability for how they vote and for the consequences of such voting decisions. The voters may also think or hope that, even if the national debts can only be paid back by the next generation, it would be someone else’s children, not their own, who will have to shoulder the burden.
Neither did the banks have a sufficient liquidity buffer to manage their short-term funding in an environment in which confidence in banks in general was being questioned and previously liquid assets were suddenly becoming illiquid. The banks, quite simply, lacked sufficient resilience. When Lehman Brothers filed for bankruptcy in the autumn of 2008, an acute crisis of confidence arose in the financial system. Only massive efforts from central banks and authorities across the world could prevent a collapse. Paradoxically enough, the fairly long period of macroeconomic stability preceding the financial crisis may partially have contributed towards making the crisis as deep as it became. When things have gone well for a long period of time it is probably human nature to relax and become slightly less cautious. Without oversimplifying matters, I think it could be said that this was something that characterised not only investors and financial institutions but also supervisory authorities and political decision-makers during this period. Even if the financial crisis has triggered a new wave of thinking regarding the central banks and their activities, I would like to point out that in no way do I consider that the development of monetary policy over the last fifteen to twenty years has been misguided or a waste of time. On the contrary, I am convinced that the policy that gradually developed will continue to contribute towards more stable development in the future. Even so, it is clear that the financial crisis functioned as a wake-up call in many ways.

Finally, there is perhaps no need to say that over the past decade, we have indeed applied all these scenarios on our financial institutions in very real circumstances. VI. Regulations: pro or counter cyclical? Finally, let me briefly touch upon the regulatory issues. Bank of Estonia is responsible for regulating the banking system in Estonia. The detailed description of Estonian banking regulations goes far beyond the scope of my speech, but I would just like to say that one advantage of being a transition economy was the possibility to draw the legislation from the scratch. That has facilitated very much the compliance with good practices and de facto full adoption of the EU acquis. What is a real regulatory challenge for central bank in our case is the question of to what extent regulatory measures should be taken into account in broader financial policy context. Arguments can be made for changing the regulations in accordance with the business cycle, especially as it seems that in modern world financial systems have become more pro-cyclical than before. In that case, early tightening may pre-empt the possibly devastating effects of asset price volatility and loan losses once the economy starts to cool down. That might be even more relevant if credit growth is high in the early stage of the cycle. This approach has particular appeal for policy makers under the currency board as the active use of monetary measures is excluded and reserve requirements are essentially the only available monetary tool.
The growing complexity of market-based finance and the change in the financial system will make it difficult for central banks to go back completely to the old, comfortable, traditional approach of having very lean balance sheets and just targeting the overnight money market rate. The set of instruments will have to be broadened. Several have been used during the crisis, some of them just for very stressful periods of course, but they are now part of the toolkit. Do you think what you’re saying is shared by other people on the Governing Council? I wouldn’t speculate on that. This view is developing in academia everywhere and has been discussed extensively in [the Kansas City Federal Reserve’s flagship conference in] Jackson Hole in 2016, for instance. So it’s part of the ongoing discussion at the interface between academia and central banking. Do you think the ECB has done enough to justify the impact of its policies on inequality? If we were to do quantitative easing (QE) again, would helicopter money be a better option? Helicopter money has never been a policy option. We are attentive to the question of inequality. I spoke in August last year to the European Economic Association about inequality and monetary policy, and since then further work has been done in the ECB to expand on what I said.

Perhaps this will become the new paradigm approach to monetary and financial stability in Asia, but elsewhere I have chosen to call this a “band aid” approach. Coming from Hong Kong, the freest economy in the world, where by law we are not allowed to impose any foreign exchange control policies and our currency must be freely convertible, I am reluctant to accept ad hoc limitations to financial openness. But I can quite understand the plight of other emerging markets in Asia. When the undesirable elements of international finance assume a predatory character and look us fiercely in the eye there is simply a need for self-defence, and temporary or discreet changes in the rules of the game are at times effective. Let me turn to the sixth characteristic of Asian finance that I wish to draw your attention to, and this concerns exchange rate policy. You are, no doubt, aware of the fact that the exchange rates of currencies in Asia have become more flexible, as an outcome of the financial crisis of 1997-98. Whether or not this is a desirable outcome remains to be seen, although my view probably represents the exception rather than the mainstream opinion. I say this not for the purpose of justifying the maintenance of a fixed exchange rate for the Hong Kong dollar. I shouldn’t have to. The fixed exchange rate has served Hong Kong very well and, with currency board arrangements and a very flexible economy, I do not see any insurmountable difficulty in sustaining it.
8 In addition, in the performance of their statistical tasks, both the ECB and the NCBs adhere to the statistical principles and ethical and quality standards set out in their “Public commitment with respect to the ESCB’s statistical function”. 9 The independence granted to the ESCB by the Treaty means that there is no political interference in the  6  See “The introduction of harmonised competitiveness indicators for euro area countries” in the February 2007 issue of the ECB’s Monthly Bulletin, and http://www.ecb.europa.eu/stats/exchange/hci/html/hci_200801.en.html. 7  See “Review of statistics on payments and securities trading, clearing and settlement” in the January 2008 issue of the ECB’s Monthly Bulletin. 8  See http://www.ecb.europa.eu/pub/pdf/other/ecbstatisticsqualityframework200804en.pdf. 9  See http://www.ecb.europa.eu/stats/html/pcstats.en.html. Both this commitment and the framework governing the quality of ECB statistics take due account of the European Statistics Code of Practice for the national and Community statistical authorities, while also reflecting the specific governance structure of the ESCB. BIS Review 50/2008  3  compilation and dissemination of statistical information. Similarly, the Treaty states that compilers of statistics in the NSIs and Eurostat should also act in full scientific independence. In addition to these essential preconditions, statistics also need to be adequately explained. This applies, in particular, to one of the most important statistics for the ECB’s monetary policy making, namely the Harmonised Index of Consumer Prices (HICP).

In addition, the ECB has the following high-priority requirements concerning the euro area statistics compiled by Eurostat and the NSIs: 1.  more comprehensive and timely statistics on services, labour markets and housing markets;  2.  better use of available data through the compilation of regular euro area supply and use tables and the integration of labour accounts into the national accounts, which  10  See “Recent developments in consumers’ inflation perceptions and expectations in the euro area” in the November 2007 issue of the ECB’s Monthly Bulletin. 4  BIS Review 50/2008  are needed both for productivity and growth analysis and for updating the EUKLEMS data; and 3.  closer coordination of national statistics with regard to seasonal and working day adjustments, revision policies and release calendars. As regards the process innovations, the Governing Council of the ECB last year endorsed a long term vision for statistics produced by the Eurosystem: •  concerning input, the same data should be collected only once;  •  concerning data processing, the Eurosystem’s statistical function should operate as an efficient production network; and  •  concerning output, the fitness for use of Eurosystem statistics and statistical communications should be further enhanced.
9  Ben S. Bernanke and Vincent R. Reinhart, “Conducting Monetary Policy at Very Low Short-Term Interest Rates,” paper presented at the International Center for Monetary and Banking Studies Lecture, Geneva, Switzerland. January 14, 2004. 10  See the Securities and Exchange Commission, “SEC Adopts Money Market Fund Reform Rules: Rules Provide Structural and Operational Reform to Address Run Risks in Money Market Funds” July 23, 2014 http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542347679 for a discussion of reforms that limited fixed NAV designs for money market mutual funds to retail and Treasury-only funds. 11  A theoretical model that captures this idea is described in Jess Benhabib, Stephanie Schmitt-Grohe, and Martin Uribe, “The Perils of Taylor Rules,” Journal of Economic Theory 96, (January/February 2001): 40–69. 12  There have been a couple of informal polls by Swiss newspapers. For instance, in December 2014, after the SNB first announced negative rates (25 bps), the Tagesanzeiger (one of the biggest Swiss newspapers) asked readers whether the decision was a good one. Of the respondents, 47.7 percent said, “Yes, it’s necessary to maintain the exchange rate” [the floor was still in place then], while 52.3 percent said, “No, this policy punishes savers.” http://www.tagesanzeiger.ch/wirtschaft/geld/Geldpolitik-Nationalbank-fuehrtNegativzinsen-ein/story/26525077). BIS central bankers’ speeches  9  Conclusion Even though nominal rates can become negative, zero is still an important benchmark: below that level of rates, society faces a distinctive set of complications and costs that can blunt the intended good effects of a negative nominal rate policy.

They are also used as animal feed – which means higher prices for meat and poultry. As rice is substituted for wheat, rice prices have also begun to increase. The disruption of commodity supplies is adding to cost pressures across a range of industrial activities. The Russia-Ukraine conflict has affected the supply of palladium and neon – two elements that are crucial inputs used in semiconductor production. This has raised chip prices which is in turn feeding through into the prices of products ranging from smartphones to refrigerators to automobiles. In short, the Russia-Ukraine war has sharply worsened the outlook for global inflation. The conflict is likely to be prolonged and thereby continue to impart an upward impulse to global food, energy, and commodity prices. This will in turn feed into global consumer price inflation in the months ahead. The inflation story in Singapore is not too different from the global story. As in the major economies, inflation in Singapore started edging up towards the end of last year on the back of a strong recovery in demand. The Singapore economy grew by a robust 7.6% in 2021 and the labour market returned to full employment. Core inflation edged up progressively over the course of last year, from 0.2% in Q1 to 1.7% in Q4, as spare capacity was absorbed. The growth momentum has slowed this year but the economy remains on track to come in within the lower half of the 3-5% GDP growth forecast.