samchain/econo-pairs-v1 huggingface dataset:
As before, the main risk is that households’ and businesses’ increased inflation expectations may remain high for a long time. If people expect price growth to stay as high in the future, their saving activity will be low. As a result, it will take more time to bring inflation back to the target. Another critical proinflationary risk is the increasing mismatch between labour demand and supply. Specifically, if wage growth is only driven by elevated inflation expectations and labour productivity does not improve, this might accelerate the inflationary spiral. Eventually, price growth will quickly absorb the earlier increase in wages. Another important group of proinflationary risks is related to external factors. Inflation has surged worldwide. This is especially obvious in prices for the products accounting for a large portion in Russian exports or imports (energy commodities, wheat, and sugar). The actual increase in prices for commodities and intermediate goods in production chains has not yet fully passed through to producer costs. Our baseline scenario assumes that price trends in some product groups will reverse to a certain extent next year. However, this change might be less significant than we expect. The risks of a further acceleration of price growth worldwide are associated with both supply- and demand-side factors. As regards supply-side factors, it might take more time to restore production and logistics chains and cope with staff shortages. As the pandemic situation is uncertain, international borders may remain closed longer.

The interest rate has been reduced by 5 percentage points and is now approximately the same as among our trading partners. The krone has depreciated by about 12 per cent over the past year, and has returned to the level prevailing in the summer of 2001 and is in line with the average for the 1990s. Chart 20. After-tax real interest rates Quarterly figures. Per cent 10  10  8  8  3-month rate  6  6 10-year rate  4  4  2  2  0 1990  0 1992  1994  1996  1998  2000  2002  2004  Sources: Statistics Norway and Norges Bank  Monetary policy is expansionary now. This is reflected in low after-tax real interest rates. A long-term real yield on 10-year bonds can be estimated at about 1 per cent. We have adjusted the nominal interest rate for expected inflation. The short-term real interest rate is estimated at 1½ per cent. We have then adjusted the figure for actual inflation. The fall in nominal interest rates in 2003 has also reduced household net interest expenses. This has increased household purchasing power considerably. Chart 21. Labour costs in Norway compared with trading partners Index.
His works have over the years touched on many aspects of money management as seen from the context of ordinary Malaysians, leaving us with memorable and lasting impressions not only on prudent financial behaviour, but on Malaysian life and society. Important lessons about savings, conserving and avoiding wastage are powerfully conveyed through the remarkably creative and entertaining visuals that we have all come to know and love. True to form, Datuk Lat’s creations are unparalleled in their ability to capture the hearts of Malaysians and through them, we are both educated and entertained. It is our honour to commemorate his works for such an important cause. Since 1999, 15 million copies of Buku Wang Saku have been circulated to more than 10,000 schools nationwide to be used in promoting good financial management habits which can make a profound difference in their future financial well-being. Indeed, being equipped with the knowledge, skills and tools to make sound financial decisions has never been more important in a generation where our young people have more money to spend, are presented with a wider spectrum of financial offerings and are exposed to greater temptations to take on debt. Financial education is therefore a vital life skill; one that must be developed from an early age. It was with this motivation that the Bank initiated a number of efforts to enhance the financial competence of Malaysians through a nationwide savings campaign that was launched in 1996.

Through their sensitivity and expression, we are reminded of the things that we often take for granted, and sometimes highlighting how we fall short from attaining our fullest potential as a nation. Datuk Lat is one of such artists. A number of Datuk Lat’s artworks adorn Bank Negara Malaysia’s premises since the 1980s, reflecting the challenges we face as a central bank in ensuring a sound and robust financial system, in a light-hearted manner. This publication of the Financial LATeracybook aims to preserve these works for the benefit of our future generation. Financial LATeracy is also a way for the Bank to express its heartfelt gratitude and appreciation to Datuk Lat for his continuing support of our financial education initiatives. Today, Financial LATeracy pays a tribute to Datuk Lat’s enduring legacy in this important endeavour. Ladies and gentlemen The Financial LATeracy exhibition is taking place during a time when more than 200 global policy makers and practitioners in the area of financial education from all parts of the world are gathering here in Sasana Kijang to participate in the meetings of the International Network on Financial Education and in the High Level Global Symposium, a network under the OECD, to explore new paths and ideas in advancing financial literacy. I am certain that the works of Datuk Lat will continue to inspire not only Malaysians but many others from foreign shores in this important cause through his unique brand of humour and poignant reflections of our society. 2  BIS central bankers’ speeches
The sharp rise in electricity prices may also affect other consumer prices. Wage developments this year and next will play an important role over the next one to two years. The inflation projections depend on the assumptions concerning the interest rate and the exchange rate. In the Inflation Report, we presented two alternative paths for the Norwegian economy. We judged that a gradual easing of monetary policy seemed appropriate. In one scenario, the tight monetary policy stance was held unchanged. Inflation then fell below target over the next few years. In another scenario, monetary policy was relaxed in line with market expectations. Inflation then moved up and was higher than the inflation target. Actual developments may, however, deviate from both paths. Norges Bank will continuously assess developments in the global economy, the Norwegian economy and the krone exchange rate, and set the interest rate with a view to achieving the inflation target. BIS Review 14/2003  5

1  4  Speech by Adair Tuner on 29 September 2011, Credit Creation and Social Optimality. BIS central bankers’ speeches  One key answer to the spiral described by Minsky has been to introduce macroprudential regulation. Instruments such as the countercyclical capital buffer are meant to provide a cushion when the credit cycle turns down. There is also a commonly held view that we need instruments to dampen credit growth during an expansion. We should probably look broadly at how the Minsky style spirals could be contained. Discretionary policy can be a useful tool, but due weight must be given to building strong automatic stabilisers into the financial system to reduce the risk of future bubbles. The topic of this conference is financial innovation. Both Adair Turner2 and Paul Tucker3 have raised doubts about the social value of some of these new instruments. I quite agree: Restrictive regulation of some of these instruments could contribute to stabilising financial markets. One could imagine that the regulator should evaluate the pros and cons of allowing any new instrument. At the very least, the regulator should make sure that any instrument traded in significant quantities is sufficiently transparent to be a useful risk shifter. In short, I agree with Frank that the positive relationship between financial markets and economic growth has its limits. The difficult question is naturally where these limits are. It will be hard for a regulator to draw the line. But there are few other candidates for doing it.
Significant credit is, of course, due to your part, especially your ability and willingness to uphold normal service for your clients here, as well as your cooperation with your supervisors in ensuring strong risk-management. Going forward, we look forward to this strong and beneficial relationship, to help us meet the challenges posed by the global economic and financial developments. Therefore, I would like to take this opportunity today to convey our appreciation, as well as to share with you the key challenges we see going forward, and to outline the reforms which in our views are key for Thailand and emerging markets in this context. My talk today will be divided into two parts. First, I will look at the current debate on regulatory reform, focusing on the measures being discussed at the Basel Committee for Banking Supervision. I will highlight the key proposals, the timeline, and the process being discussed. Secondly, I will share with you our input on the debate at global forums, and the reform that we consider to be our priority, going forward. I believe our reform agenda will be useful for you as practitioners, as the global reform covers a very expansive and comprehensive set of policy, and for banks operating in many jurisdictions, the required adjustment to ensure compliance can be significant. This process can be facilitated by setting a clear and transparent priority. Let me now turn to the first part of my talk, the update on global debate on regulatory reform.

While the range of policy is extensive, the key thrusts are strengthening of risk-based microprudential regulation, and emergence of the explicit importance given to macroprudential supervision to tackle the problem of procyclicality and systemic risk. As we can see, there will be a new paradigm and context to international supervisory standard. While the macro orientation is in fact not new, and has always been in the classic tool-kit of central bank in ensuring financial stability, the current explicit articulation and specification of such tool as global standard is. The key macroprudential policy framework that has received wide support to deal with procyclicality problems includes the followings. First, there is a proposal on the build-up of capital buffer in the good times to be run down in the bad times and to prevent excessive credit growth. Second, as being discussed with accounting standard setters, provisioning should be linked with expected loss rather than incurred loss, which is the prevailing practice. Finally, the primarily simple and transparent “leverage ratio” should be applied as a complement to risk-based capital requirement under Basel II. Implementation of many such policies is still subjected to significant work on calibration as well as qualitative issues such as consistency with risk-sensitive capital framework, and international level-playing field. Such problems magnify in the case of emerging markets, which face constraint on data and institutional capacity. Moreover, much of the work done on calibration would tend to serve the need of IRB rather than SA banks that are the core in emerging market.
22  BIS central bankers’ speeches  Chart 9: Violent crime in Western Europe England  Netherlands and Belgium  Scandinavia  Germany and Switzerland  Homicides per 100,000 per year  80  Italy  70 60 50 40 30 20 10  1300  1400  1500  1600  1700  1800  1900  0  2000  Source: OurWorldinData.org, based on Eisner (2003). Chart 10: Death rate associated with state-based conflicts Deaths per milion people  Extrastate  250  Intrastate Interstate Internationalized Intrastate  200  Deaths per million people  150  100  50  1946  1956  1966  1976  1986  1996  2006  0  Source: Human Security Report Project, available at: http://www.hsrgroup.org/our-work/security-stats/Deathsfrom-Organized-Violence.aspx  BIS central bankers’ speeches  23  Chart 11: Government command of output as a percentage of GNP in England, 1285–2000 Government spending as a share of output, percent  100 90 80 70 60 50 40 30 20 10  1200  1300  1400  1500  1600  1700  1800  1900  0 2000  Source: Clark (2009).

In everything that we do, we need to consider all the information, and exercise data dependence and flexibility, as we navigate the course ahead. 1 See John C. Williams, Interest Rates and the ‘New Normal’, Remarks to the Community Banking in the 21st  Century Research and Policy Conference, St. Louis, Missouri (October 5, 2017), and Kathryn Holston, Thomas Laubach, and John C. Williams, Measuring the Natural Rate of Interest: International Trends and Determinants, 3/4  BIS central bankers' speeches  Journal of International Economics, Volume 108, Supplement 1, pp. S59–S75 (May 2017). 4/4  BIS central bankers' speeches
This can be achieved either through more intensive use of existing technology or through breakthroughs in new technology. But there is considerable uncertainty about the prognosis for productivity growth. On the pessimistic side of the debate is the notion of technological stasis. •  Robert Gordon has presented the most well-known articulation of this view. •  The thesis is that most of the truly important innovations (such as the steam engine, electricity, and modern sanitation) have already been fully utilised, while newer inventions (for example, digital technology) do not seem to have as much transformative impact. •  It is not that there is a dearth of innovations today – on the contrary, there are many. It is just that they have not had as much impact on productivity as earlier innovations. Techno-optimists, however, believe that we are on the cusp of a new wave of technological breakthroughs that will greatly raise the economy’s productive capacity. •  The story of genomics, robotics, artificial intelligence, and 3D printing is only starting to unfold. Moreover, the world does not comprise of the advanced economies alone. Regardless of what happens to technological advances at the frontier, emerging market economies have considerable scope to raise productivity by simply catching up to the existing state of play at the frontier.

•  Market research shows that equity investments in certain advanced economy companies with significant emerging market exposure can indeed enhance portfolio performance. Local presence to serve global interests Even so, there is no substitute for direct investment in emerging market assets. But to understand the performance and risk characteristics of each market requires access to specialist knowledge of political systems, macroeconomic trends, currency conditions, and regulatory and legal frameworks in these countries. Singapore offers a compelling value proposition for government funds seeking a vantage point from which to build knowledge, insights, and partnerships in Emerging Asia. As a premier asset management centre, Singapore offers global funds a gateway to investing in Asia. Asset managers are drawn to Singapore’s strong global and regional links and their growing presence reinforces these links and at the same time enhances the larger financial ecosystem of banks, insurance companies, and the supporting networks of legal, accounting, and technological expertise. The growth in assets under management has in turn helped to draw in more sell-side products, including traditional and alternative assets like real estate and private equity, as well as a wide range of capabilities. Several government funds have set up offices in Singapore to support their research and investments in Asia. They include: •  ICPRC;  •  Norges Bank Investment Management;  •  the Swiss National Bank; and  •  La Caisse de dépôt et placement du Québec. Conclusion Managing money for the long-term is one of the most difficult of human endeavours.
It would then be difficult to justify a situation in which individual incentives, those of bank managers and shareholders, are not aligned with the collective incentives to support the economy. We should not forget the experience of Japan over the past decade, where delays in restructuring and recapitalising the banking system undermined the recovery after the crisis. I am certain that this will not happen in Europe, if all parties play their part responsibly and are conscious of the role that each component of the economic and financial system must perform, in particular when faced with critical circumstances such as those we have experienced recently. For our part, I believe that the European Central Bank has demonstrated over this period that it is living up to its responsibilities. BIS Review 129/2009  7  Thank you for your attention. Chart 1: Euro area MFI sector’s financial assets transactions (percentages)  Source: ECB Euro Area Accounts. Chart 2: Changes in credit standards applied to the approval of loans or credit lines to enterprises (net percentages of banks contributing to tightening standards)  Source: Euro area bank lending survey. Notes: The net percentage refers to the difference between the sum of the percentages for “tightened considerably” and “tightened somewhat” and the sum of the percentages for “eased somewhat” and “eased considerably”. The net percentages for the questions related to the factors are defined as the difference between the percentage of banks reporting that the given factor contributed to a tightening and to an easing.

In the meantime, the success of the SLGS has garnered a consensus to develop a sustainable, market-oriented platform to cater for the ongoing SME financing needs upon the phasing out of SLGS. Taking this opportunity, the Government-owned Hong Kong Mortgage Corporation launched a new SME Financing Guarantee Scheme (SFGS) on 1 January 2011 to facilitate a smooth transition from the temporary SLGS to a sustainable market-based mechanism. Operating based on prudent commercial principles, the SFGS does not require government subsidy and the scheme size can be flexibly adjusted to respond to changes in market demand. The SFGS also provides a broad range of options on the product features such as tenor, facility type, loan amount and guarantee coverage to fit the different needs of banks and SMEs. Initial market response to the SFGS has been positive, with a good participation  BIS central bankers’ speeches  1  rate from banks and an encouraging number of applications received from a broad variety of SMEs. It is expected that the SFGS will over time play an important role in helping SMEs obtain stable and sustainable financing while assisting banks in managing their risks, in particular when market conditions become volatile and uncertain. I am happy to share this experience of Hong Kong, China of how the “exit” of an extraordinary government measure has facilitated the “entry” of a long-term market-based solution for sustainable SME financing.
To make best use of the informational role of money, however, we have to face numerous and increasing challenges One major difficulty is to identify in real time the nature of monetary developments and their implications for future price developments. The challenge of monetary analysis is to see through the noise in monetary data to recover those underlying trends which are relevant for monetary policy decisions. Meeting this challenge has not been straightforward in recent years as the euro area economy was hit by several shocks: financial instability in the aftermath of the stock market collapse in 2000, exceptionally high economic and geopolitical uncertainty between 2001 and 2003, just to name a few. First of all, short-run monetary developments are often affected by transitory shocks. We need to identify and account for such temporary “special factors” or “distortions” that may affect monetary developments and blur their information content. To some extent it is the aim of the methodology developed at the ECB which allows for periodic adjustments to measured monetary aggregates in order to account for portfolio shifts which impact the demand for money without any incidence on future inflation. This approach has met with great success in the period 2000-2004. Second, and more permanently, it is necessary to disentangle, in monetary and credit evolutions, those which reflect structural and permanent changes from those which simply result from moves in the level of interest rates and the position in the economic cycle. Here, no mechanistic or ad hoc approach would do the trick.

When Paul Volker brought down US inflation from 13 % to 3 % in three years, he did it by setting a cap on Central Bank money growth. And symmetrically, when the Japanese authorities had to fight deflation, they resorted to a "quantitative easing" policy, which basically meant they were targeting a specific amount of Central Bank money. There has been considerable debate over the theoretical underpinnings of those policies: namely whether a specific channel of transmission of monetary policy, independent of interest rates, could be identified. In any case, those experiments show, in my view, that setting a path for money growth (or its level) can prove very effective in controlling expectations - or pin down the price level - in an extreme environment. •  In more normal circumstances, however, the relationship between money and prices is more subtle and uncertain. In modern market economies, the demand for money exhibits - at least in the short and medium run - some chronic instability, if not unpredictability, a point to which I shall come back later. This has led to the demise of monetary aggregates as targets of monetary policy, and, in some countries, they have been abandoned as indicators as well. But we still think, in the euro area, that Friedman is right in the very long run. Our research has established that low frequency movements in money growth and inflation are closely correlated, retaining fluctuations with a period of 8 to 10 years.