samchain/econo-pairs-v1 huggingface dataset:
Even if upward and downward deviations were to level out in the really long term, there could be long periods where CPI inflation deviates from the target – long enough for there to be a risk of confidence in the inflation target being shaken. To put it differently, participants in the economy could begin to question whether the Riksbank will truly also stabilise CPI inflation around the target by stabilising CPIF inflation around 2 per cent. And they would have fairly good grounds for doing so, not just based on past events but also if we look ahead. If we assume in Figure 4 that CPIF inflation will continue to be around 2 per cent after 2018, then CPI inflation would overshoot the target for a long time, based on reasonable assumptions about the development of the repo rate. Even if the repo rate did not continue to rise to levels considered normal before the crisis, but instead slowed to the average of 2.3 per cent seen over the period 1998–2015, CPI inflation would overshoot the target for around five years in total. If the repo rate did continue to rise, it would take even longer, all things being equal, for CPI inflation to return to 2 per cent.12 Of course it is problematic if the formal target variable deviates from the target for such long periods, even if this is a result of a conscious policy.

Supervisors need to ensure that cyber security becomes a permanent agenda in the board’s engagements with senior management. There should be on-going dialogue about emerging trends and vulnerabilities, and the measures in place to address them. This would raise awareness of security concerns and ensure that existing cyber security risk management practices are effectively integrated with the firm’s wider business strategy and risk appetite. It is equally important to ensure that the board of directors’ of the financial sector invests adequately in cyber security infrastructure systems and procedures. The amount of funds allocated should commensurate with the nature and scale of an institution’s business activities, and its strategic direction. 65% of respondents in an Ernst and Young survey in 2013 cited an insufficient budget as the primary challenge for information security functions to meet the demands of the business. As supervisors of the financial system, we should require financial institutions to continuously benchmark infrastructure and systems against leading best practices in cyber security. This includes the application of security testing measures to identify key potential vulnerabilities in a financial institution’s information security system. Financial institution ought to take a long term view on this matter. Supervisors can do more to encourage financial institutions to improve the response to evolving threats by ensuring continued access to external and internal expertise necessary to rapidly develop controls and defences that protect critical assets and operations. Today, the lack of skilled resources remains a key barrier to value creation in regard to information security.
Financial Stability: Parallel Processes  Recognition of these three “must do” areas is a starting point in deciding the scope of our financial stability work and in enabling us to fulfil our MoU mandate. But it does not provide a clear steer on what we actually have to do to carry out our functions efficiently and effectively. Regarding long term thinking, which might one day lead to an analogue to monetary policy, we are undertaking a research project. This is separate from our day to day activities where a set of organising principles can be used operationally to handle today’s issues. i)  Research and Development: Creation of an Analytical Framework  The research project is an attempt to devise an analytical framework as an analogue to that in monetary policy: to help clarify some of the differences I outlined earlier and to provide greater certainty and focus. As with the development of monetary frameworks, this will be a medium to longterm endeavour. This may sound overambitious. But even modest achievements towards it would enhance understanding of what financial stability oversight is about, and what our priorities should be in seeking to ensure it. And so it could assist our quest for clearer accountability and more transparent governance arrangements. This quest gets to issues such as how to define our financial stability objective, how to articulate indicators of financial stability, and how they relate to each other.

And it means we have to understand the dynamics and interrelationships of markets; how new products work; and the possible behaviour patterns of intermediaries, investors, and borrowers. Above all we need to be focused on where major risks are most likely to emerge and the market dynamics if those risks start to crystallise. And we need to distinguish those which are systemic from a myriad of fascinating developments, many of which are just “noise” but which could otherwise distract us. b)  Risk Reduction: Oversight of Payment Systems  The second area where we, and typically other central banks, are required to perform is oversight of payment systems. Payment systems facilitate economic transactions of goods, services and financial assets and are an essential component of a well functioning financial system. So reduction of risks in these systems, for example through the introduction of our Real Time Gross Settlement system, is clearly a priority from a systemic perspective. c)  Provision of Liquidity and Preparation for a Financial Crisis  And thirdly the MoU stipulates that we need to be in a position to inject liquidity at all times. This means that we must be able to provide liquidity in normal times, as well as in times of stress or crisis. This puts an increased onus on well developed and tested crisis management plans, and a particular focus on ensuring that we are able to undertake a range of official financial operations in exceptional circumstances. 4.
Second, the takaful industry must conduct itself in a way that alleviates, not add, to the hardship of customers. I would make this same remark to insurers and takaful operators alike, but with its very essence of kafal emphasising mutual help and assistance, takaful must do more. Our expectation is for the industry to consistently deliver best-in-class and superior customer experience. It makes perfect business sense for positive customer experience to be at the heart of the industry’s strategy. This is true for any business, but even more important for a product that most people do not normally seek out to buy. McKinsey & Co. estimates that globally, insurers that consistently offer best-in-class customer experience produce up to four times more growth in new business. They are also 30% more profitable than those who do it inconsistently. What the research underscores is the importance of being accessible, empathetic, fast and reliable. Not just when selling, but also when providing after sales service and processing claims. In this day and age, customers can hail a taxi ride in five minutes and have their food delivered in 30 minutes. Complaints on service are responded to within the same day, if not within minutes. Quality and response to services are forever being transformed by technological advances. It is thus unacceptable that service in the takaful industry is delivered slowly.

The introduction of the Financial Markets Committee (FMC) measures has put in place the foundation for a healthier and more vibrant financial and foreign exchange market. As a result of the strong economic performance in 2017 and the improved sentiments following these measures, the ringgit has strengthened by 14.6% in 2017 and 2018 thus far. The ringgit has also been of the most stable currency in the region. As our economic outlook remains strong, the ringgit will continue to reflect this strength. For Bank Negara, we have always indicated that market forces will determine the value of the ringgit. There has never been a target level for the ringgit exchange rate. With the economy and financial markets constantly evolving, fixation on a particular level of ringgit exchange rate is counterproductive, if not detrimental to the economy. What matters for Bank Negara and all of us here is to ensure that any adjustments taking place is done in a gradual and orderly manner, without causing undue disruptions to businesses and households. The foreign exchange market can sometimes be very fickle. Therefore, we should always remain on our guard, as the global economic and financial conditions may change rapidly following many developments such as normalisation of interest rates, geopolitical risks and the tendency to adopt policies that might curtail open trade. The ringgit’s recent appreciation and stability is not something that we should take for granted. What we have learnt in recent years is to never downplay the unexpected.
Twinning agreements are an important instrument for ensuring Albania’s compliance with EU legislation. This agreement is reached in a convenient time, taking into account that only two  BIS central bankers’ speeches  1  months from now, a decision will be made by the Council of the European Union on the candidate status with regard to Albania’s EU membership. The ultimate objective of this cooperation will go beyond the assistance; it will contribute to achieving high levels of professionalism, independence and transparency. It will also contribute to promoting the monetary and financial stability in Albania. Moreover, the assistance will be an impetus to the country’s European integration, with special focus on compliance with criteria for legal and economic convergence with the European Union. This underlines, once again, the role of European integration as a driver to economic and social modernisation in our countries. Today’s agreement comes at a moment when the commitment of the European Central Bank to our region is focused not only on the field of technical cooperation, but also extends to the political one. In addition to the close monitoring of the economy of Albania and other countries in our region, the European Central Bank plays an active role in the Vienna Initiative 2.0, which aims at identifying and mitigating systemic risks in the countries where European banks operate.

This dynamic should have been mitigated to some extent by the rating agencies as they assigned ratings to these new securities, but that process too proved inadequate, especially for residential real estaterelated securities. The problems associated with these misaligned incentives for issuers and inadequate rigor on the part of the rating agencies became apparent as the housing sector turned down and the economy weakened. The result was a dramatic spike in credit losses and an almost complete loss of investor appetite for non-agency, residential mortgagebacked product. A second factor contributing to the collapse of the ABS market was that the benefits of pooling and distributing risk more widely proved to be somewhat illusory. In practice, the performance across different loans that collateralized the securities was much more highly correlated than was anticipated, and the risks associated with these securities was significantly more concentrated than had been assumed. Some banks that were unable to sell the highest-rated tranches kept them on their books. In other cases, the sales were made to off-balance sheet vehicles, in which the banks retained residual risk. This correlation contributed to the aversion of investors to the asset class as a whole. A third contributing factor was the fact that these securities were often complex and heterogeneous and, thus, hard to value. In a stressed economic environment, this complexity exacerbated the erosion in market liquidity conditions, which in turn led to a vicious circle of falling prices and even further diminished liquidity.
In my own view, large complicated government units are probably not possible in Thailand unless we get some fantastic new government which is very sophisticated and lasts a very long time, say, 10 or 20 years, a prospect, which presently one should not plan on. In this case, one should then design government units to be small independent units, independently managed, and the governments that come in execute their mandate through budget allocation and legislative changes where necessary. Interestingly, all over the world for a very long time, the concept has been that civil servants have a lot of authority and are not profit-oriented. One should make sure that they have tenure and are well compensated with pensions after they leave, otherwise they might try to stock up some assets for their later life. The philosophy is going in the opposite direction everywhere now. Civil servants are powerful and important and therefore they should not have tenure. For that reason one must make sure that civil servants perform by giving them only limited term contracts, and they will have to perform responsibly and efficiently to get a new contract. I am inclined more towards the latter as one can never make sure of hiring or promoting the right person, and therefore one should plan on an easy change of personnel to get the best results. Let me make a controversial statement on the platforms of the various political parties in terms of spending more and taxing less.

There is a painful paradox: the 2008 financial crisis started in the United States and the 2020 pandemic crisis started in China and yet, each time, it has been Europe that has suffered the most. In 2020, US GDP fell by 3.5%, while euro area GDP fell by 6.6%, almost twice as much. In the face of a similar health shock, the number of cases and deaths, relative to the total population, is higher in the United States than in the euro area, even than in France, Spain or Italy. However, recovery paths are clearly diverging:  Page 4 sur 14  Excluding containment measures, two main direct factors could explain this phenomenon: the euro area’s higher dependency on tourism; the digital advance of the United States. Incidentally, the negative impact has been highest in the United Kingdom, whose GDP fell dramatically last year, by almost 10%. The OECD forecasts a modest recovery this year (+5.1%), relative to the plunge. II. Three potential explanations and three cures After the diagnosis, I will now move to potential explanations and cures. For that, let us call to mind two of our most famous economists of the 20th century: Keynes and Schumpeter, who are viewed as opposed in terms of policy prescription. John Maynard Keynes emphasised the importance of both macroeconomic active policies and the welfare state for citizens. Joseph Aloïs Schumpeter focused on what causes dynamism and innovation in market economies.
Figure 1: HICP inflation in the euro area  16 14 12 10 8 6 4 2  05  03  20  20  01  99  20  19  97  95  19  19  93  91  19  19  89  87  19  19  85  83  19  19  81  79  19  19  77  19  75  19  19  19  71  -2  73  0  Source: ECB - M. Ehrmann and F. Smets (2005). Note: The chart shows quarter-on-quarter (red) and year-on-year (blue) inflation, and its average value over three sub-periods that have been identified by breakpoint tests. 8  BIS Review 4/2006  Figure 2 ECB Survey of Professional Forecasters: Expected inflation at various horizons (average) % 2,8 2,6 2,4 2,2 2,0 1,8 1,6 1,4 1,2 1,0 1999q1 1999q3 2000q1 2000q3 2001q1 2001q3 2002q1 2002q3 2003q1 2003q3 2004q1 2004q3 2005q1 2005q3 n  n+4  Q+4  Q+8  Source: ECB – Production: Banque de France – update October 2005.

Contrary to the US, the use of modern technology and communications has made it possible for market operations not to be concentrated at a single geographical location, but to be carried out simultaneously at all of the National Central Banks. The same type of arrangement applies in other monetary areas (cash management, payment systems, etc.). 1.4. The Eurosystem benefits from an efficient operational framework The operational framework is based on two main guidelines: - a range of monetary policy instruments selected in accordance with the principles of an open market economy, a level playing field, simplicity and transparency: these instruments enable the smooth adjustment of banking liquidity and effective steering of short-term interest rates. - procedures guaranteeing a high level of security for all interbank transactions and large-value payments within the euro area and with other countries in the European Union, with in particular the TARGET system, which played a predominant role in the integration process of the euro money market. BIS Review 4/2006  3  2. The strategic framework also contributes to the efficiency of the single monetary policy From the outset, there was a consensus among the designers of the Eurosystem that the Single monetary policy would require a clear strategic framework. This framework can be characterised by two main principles: a quantitative definition of price stability and a medium-term orientation of monetary policy. 2.1.
The inflation target and consideration of the real economy Since the inflation target was formulated in 1993, the reasoning regarding the monetary policy strategy has gradually developed. It has been affected by both practical experiences in Sweden and other countries and new research results from the academic community. The primary reason for our new monetary policy strategy document is to increase understanding of the inflation target and of how we decide the monetary policy stance required to attain this target, while giving consideration to developments in the economy as a whole. How have we then chosen to conduct monetary policy to meet our commitments in the best possible way? The Riksbank has the statutory objective of maintaining a low and stable inflation rate, or of maintaining price stability as it is expressed in the Sveriges Riksbank Act. We have specified this task as ensuring that CPI inflation is around 2 per cent a year, with a tolerated deviation interval of +/1 one percentage point. As long as confidence in the inflation target is not threatened, the Riksbank also has the possibility to take into account developments in the real economy, such as production and employment. Although the latter has not been written into the Act, it was stated in the preliminary work to the new Sveriges Riksbank Act that came into force in 1999 that it was natural that the Riksbank should support the economic policy objectives of sustainable growth and high employment without neglecting the long-term price stability objective.

Over time a policy that quickly subdues inflationary impulses would probably result in more stable inflation, but there would be a risk of substantial fluctuations in the real economy. We have chosen a two-year horizon for monetary policy because this is considered to give sufficient scope in most cases to ensure a good and stable development of the real economy. However, the rate at which it is desirable to bring inflation back on target in an individual case depends on what shocks  2  BIS Review 96/2006  the economy has suffered and how substantial they are. Sometimes the deviations from target can be so large that there is reason to allow inflation to return to target beyond the normal two-year horizon. In these cases, we shall explain this in connection with our decisions. Back when the new Sveriges Riksbank Act came into force in 1999 and a new Executive Board entered office, the Riksbank published a clarification of monetary policy, where it was pointed out that the horizon might need to be longer when the economy was subjected to large shocks 1 . The new element is that we are clearer on the point that the choice of time horizon concerns a desire to alleviate the consequences for the real economy. Another new element since last year is that we make forecasts under the assumption that the repo rate will develop in line with market expectations, as these are reflected in implied forward rates.
Used together with IOER, it may strengthen the floor for short-term interest rates and, with it, the Federal Reserve’s control of money market rates, by surmounting the competitive and balance sheet frictions seen in money markets and by extending the central bank’s payment of interest to a wider universe of relevant counterparties. Improved control over the level of money market rates and reduced volatility of short-term interest rates could enhance the flexibility of the Desk’s operational tools, ultimately allowing for a more robust and effective implementation of the FOMC’s policy directives both during the rate normalization period and when there is a very large balance sheet. Thank you. Desk or its clearing banks. The initial fixed rate for the operation was set at 1 basis point, which was below current market rates; it was subsequently raised periodically in 1-basis point increments to a level of 5 basis points, which has been in effect since November 19. BIS central bankers’ speeches  9  10  BIS central bankers’ speeches

Increasing computing powers, together with accessibility of data and applications of new technologies, have contributed to an increased commercialisation of Regtech solutions available to the banking industry. 13.Recognising the growing need for, and developments of, Regtech solutions, we at the HKMA consider it timely to work with the banking industry and the technology community to further facilitate the adoption of Regtech in Hong Kong. To help develop the Regtech ecosystem here, the HKMA will open the Fintech Supervisory Sandbox to Regtech projects or ideas raised by banks or tech firms. I am also pleased to say that the HKMA will soon launch a series of Regtech-specific projects, through its Banking Made Easy initiative, focusing on four areas: (a) AML/CFT surveillance technologies; (b) Regtech for prudential risk management and compliance; (c) Study on machine-readable regulations; and (d) HKMA’s exploration of Suptech. 14.Let me explain each initiative in greater detail. AML/CFT surveillance technologies 15.About AML/CFT surveillance, one should bear in mind that the financial system is the gateway through which criminals must pass to make crime pay. The reality is that financial system is becoming more efficient because of technology. Efficiency brings enhanced services to customers, which are delivered through channels and at speeds we could have only dreamed of a few years ago. But these developments can equally be attractive to criminals. 16.This is where banks should come in. Banks are expected to be on the frontline of combatting financial crimes given Hong Kong’s role in the global economy.