samchain/econo-pairs-v1 huggingface dataset:
True, headline inflation rose initially in many countries, especially the US, where it ticked up to nearly 5%, before falling sharply to less than 1.5% when oil prices fell this autumn. But central banks have been on the alert for any signs that higher oil prices would feed into higher wages, and so trigger an inflationary spiral. And so far wage growth has remained moderate in all developed countries, including the UK. Monetary policy Inflation has remained firmly under control despite a doubling in the price of oil. This, to my mind, is striking evidence of a sea change in policy since the 1970s. But how far was the Great Stability due to good policy, as opposed to globalisation or plain good luck? This broader question is probably unanswerable, but a couple of points are worth making. First, there is no doubt that, in the medium term, the actual inflation rate is determined by the Bank of England. Our decisions about interest rates – the price of money – determine the amount of total money spending in the economy. The rate of inflation reflects the difference between this spending and what the economy is capable of producing – total supply. The faster money spending grows relative to supply, the higher inflation will be. In that sense low inflation reflects policy, not luck. But external conditions may make it more or less easy to keep inflation low and stable.

1/5  BIS central bankers' speeches  Indeed, the various measures that were implemented have been instrumental in accelerating the e-payment agenda forward, only because of the cooperation of the industry, sometimes with a bit of nudging. But truth be told, we have been able to achieve so much. Today, the payments industry is no longer the exclusive domain of banks. The advent of FinTech driven by the increasingly inexpensive and pervasive internet and mobile technology has encouraged the entry of more agile non-bank players as potential disruptors or collaborators of the incumbent players. This has set the stage for an exciting new era in payments, an era in which the industry is expected to take on a larger role in delivering a more robust and efficient payments system for Malaysia. The Bank will facilitate this in three key ways: i. First, through policy initiatives to encourage collaborative competition or ‘co-opetition’; ii. Second, by further strengthening industry alignment; and iii. Third, by supporting more inclusive governance arrangements for the development of the payment system. Policies to promote co-opetition as a key enabler for greater efficiency, competition and innovation Network effects are critical to an efficient payment system. The larger the network of a payment system, the more valuable it is to users of the payment system.
Although Sweden in this regard would have liked to go a step further towards full deregulation of the financial marketplaces, it must nevertheless be seen as a step towards freer securities trading in the EU. In addition to developments at the EU level, national reforms are also under way in several countries. In Germany the efficiency of the banking system is being improved considerably now that the state guarantees are being abolished. Similar measures should also be taken promptly in the other major euro area countries, so that they can also capitalise on the advantages of a deregulated financial market. But these are tough reforms that require that special interest groups do not exercise their influence. When there are politicians on the boards of some of Europe’s banks, there is reason to suspect that decisions are sometimes made on grounds that are not entirely related to business. As long as this uncertainty remains, it will contribute to the euro area’s financial markets often being a secondhand choice for international investors. Furthermore, there is still much to be done in terms of competition. The majority of countries in the euro area are burdened with overcrowded bank markets that have many inefficient local branches. However, the existence of some 2,400 banks in Germany should not be taken as a sign of stiff competition, but rather the opposite. Overcrowding is at least as ominous an indication that the operations are not been run in a business-like manner.

The financing of the state pension systems are of vital importance for the taxpayers’ confidence in the economy. If we have learned anything from recent economic developments, it is that households and firms have become better and better at putting things in context, and to change their behaviour accordingly. When forward-looking taxpayers have realised the obvious - that the pension systems  BIS Review 45/2003  3  sooner or later must be overhauled - it has also affected their behaviour. Because in the end, the taxpayers have to foot the bill when the systems are underfinanced - either by way of higher pension charges or lower benefits. Irrespective of which, uncertainty results in households preferring to save a little extra rather than consume. This could also be one explanation to why saving in many central European countries has remained at a comparatively high level. It is therefore pleasing that steps have now been taken in the three largest euro area economies to reform their pension systems. Even if these reforms are insufficient to secure the government finances in the long term, they are important stepping stones towards healthier economic growth. Tax and benefit systems a key question for the labour supply Income tax and benefit systems are also important for long-term potential growth in a country, particularly in countries with a high tax burden. It is indeed not possible to establish with certainty that a high tax burden in itself would constitute a limitation to growth in the long term.
Timely movements in short-term interest rates are the means by which both the average cost of a mortgage, and its variability, can be reduced to the minimum necessary to attract loan finance. In so doing we should be able to avoid crisis - and inevitably large changes of interest rates of the kind that we have seen so often in the past. Indeed, since the inflation target was adopted in October 1992 there have been no changes of interest rates of that kind - all changes were decided at the regular monthly monetary meetings. Moreover, the switch last May to a fixed timetable of meetings for the Monetary Policy Committee - with all interest rate decisions announced at 12 noon on the Thursday on which the MPC meeting concludes - was a major step forward in reducing uncertainty in financial markets. Through the Looking Glass ..... So if interest rates must be flexible, in which direction are they likely to move next? I wish I could tell you. Inflation, as measured by RPIX, rose to 3.0% in April, compared with 2.6% in March. But that jump largely reflected the Budget changes to excise duties which took effect earlier this year than last. That will drop out of the index in the third quarter of this year when RPIX inflation is likely to fall back towards its target level of 2½%. However, this relatively optimistic short-term outlook reflects an extraordinarily benign inflation environment.

That is why in the case of essentially technical judgments it is sensible to rely upon collective wisdom, and there are other areas in which we do precisely that. The Law Lords, for example, reach their decisions by aggregating individual judgments, and the same is true in the United States Supreme Court. The MPC is based on the same principle. For such a system to work it is crucial that the individual members of the MPC give their best judgment and do not try to reach an artificial consensus. When policy is clearly off-track, as in the spring of last year, it is not difficult to reach unanimous decisions, as the Committee did through 1997. But when policy is finely balanced, disagreements about the precise level of interest rate are not only likely but an indication that policy is broadly on-track. That is why the motto of the MPC should perhaps be “divided we stand, united we fall”. Some commentators have been unable to resist labelling members of the Committee as either “hawks” or “doves”. There is a fundamental problem with this labelling. It makes no sense in the new system to describe individuals as hawks or doves. Each member of the Committee has the same inflation target. Unlike some other central banks, MPC members cannot entertain closet views about the attractions or dangers of slightly higher or lower inflation. Their task - to which they will be held personally accountable - is to hit the Government’s inflation target.
Combatting fraud is a high priority for the Bank, and we will continue to work with the financial industry, Government agencies and law enforcement authorities to further improve banking and payment fraud incident response and recovery actions. Alongside these efforts, increasing digital and financial literacy will be extremely important to build and preserve confidence in the use of digital financial services. Learning how to use digital financial services safely is just one dimension. An important goal of improving digital financial literacy is also to help individuals make better use of digital financial services to improve their financial well-being. With an explosion of digital tools that can help individuals plan and manage their finances better, a much wider range of financial solutions, and easier access to financial advice - financial literacy, including digital financial literacy, is critical to help individuals navigate the complexity that comes with more choice. Faced with the same set of choices, individuals armed with the knowledge and skills to make good choices and good use of facilities available to them could significantly improve their standard of living, while others who make poor financial choices could be plunged into personal financial hardship. 15. The Financial Literacy Month this year aims to amplify the importance of digital financial literacy in helping Malaysians build financial resilience, and enable them to participate fully in the digital economy with confidence. Our efforts should reduce the digital divide, expand accessibility, and strengthen individual skills to manage money wisely. 16.

Individuals, therefore, need to be supported to understand the risks associated with using financial products and services that are accessed through digital means so that they can better protect themselves against these risks. Given the rate at which technology evolves, this can be daunting for the average consumer to keep up with which is also precisely why financial education is so critical. 2/4  BIS - Central bankers' speeches  13. One of the more striking results from the 2021 FCI Survey is the low level of digital financial literacy observed, which is deeply concerning. One in three individuals surveyed stated that they would be willing to share their bank account passwords or PIN numbers with close friends. This increases the risk of online fraud, including being used knowingly or unknowingly as 'mule accounts' to perpetrate fraud. Almost twothirds of individuals surveyed do not pay attention to the security features of a website before they perform online transactions (such as to check if the page for making payment is legitimate and can be trusted). As a result, individuals are far more likely to be deceived into providing their banking credentials through a fake website that enables scammers to use their information to commit fraud. Using mobile devices and apps inappropriately has also led individuals to fall victim to fraud such as phishing, hacking, and data theft. 14.
Thomas Jordan: The rationale for discontinuing the minimum exchange rate and lowering interest rates Introductory remarks by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the press conference of the Swiss National Bank, Zurich, 15 January 2015. *  *  *  Ladies and gentlemen Thank you for once again accepting our invitation to this press conference at such short notice. Let me begin by explaining the rationale for discontinuing the minimum exchange rate and lowering interest rates. Afterwards, I shall be happy to answer your questions. Discontinuation of the minimum exchange rate The Swiss National Bank (SNB) has decided to discontinue the minimum exchange rate of CHF 1.20 per euro with immediate effect and to cease foreign currency purchases associated with enforcing it. The minimum exchange rate was introduced during a period of exceptional overvaluation of the Swiss franc and an extremely high level of uncertainty on the financial markets. This exceptional and temporary measure protected the Swiss economy from serious harm. While the Swiss franc is still high, the overvaluation has decreased as a whole since the introduction of the minimum exchange rate. The economy was able to take advantage of this phase to adjust to the new situation. Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced.

If necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions. Thank you very much for your attention. I will now be happy to answer your questions. BIS central bankers’ speeches  1
The General Court in Luxembourg held in its judgment in 20154 that it would be for the ECB to request the EU legislature to amend Article 22, should the ECB consider that having the power to regulate CCPs is necessary for the proper performance of its tasks under the Treaties. In particular, revising Article 22 is a necessary step for us to carry out the tasks foreseen under EMIR II. Considering the risks the ECB faces with regard to the implementation and transmission of its monetary policy, it is imperative that it be equipped with the necessary tools vis-à-vis CCPs, particularly in a crisis situation. I want to make clear that such measures would aim to address risks in a limited number of areas which are crucial for the implementation of the single monetary policy and the smooth operation of payment systems, which ultimately affect our primary objective of maintaining price stability as mandated by the Treaties. Areas of particular relevance from this perspective are liquidity arrangements, settlement processes, collateral, margins and interoperability arrangements. Let me add that such measures would only be triggered in the event of a clear threat to the conduct of our monetary policy, and would in no way encroach upon the prerogatives of CCP supervisors or the frameworks established by EU legislators. The ECB will act only within its competence, which is to formulate and implement the monetary policy of the euro area.

For the banks, it was a case of heads I win, tails you – the taxpayer – lose. This cheap funding fuelled lending. Banks got bigger. In the UK, their balance sheets rose from around one-half to more than five times our national income in a generation. As the banks got bigger, so did the implicit subsidy – by the time of the crisis it reached many billions of pounds a year. The bigger banks became, the more they were seen as too important to fail, and the surer markets became that the taxpayer would bail them out. But there are only so many good loans and investments to be made. In order to expand, banks made increasingly risky investments. To make matters worse, they started making huge bets with each other on whether loans that had already been made would be repaid. The seeds of the eventual downfall of the financial system had been sown. As loans and investments went bad, those seeds started to sprout. In August 2007 came the moment when financial markets began to realise that the emperor had no clothes. The announcement by the French bank BNP Paribas that it would suspend repayments from two of its investment funds triggered a loss of confidence and a freezing of some capital markets. A month later, the crisis claimed its first victim when Northern Rock failed. In the months that followed, there was a steady procession of banking failures culminating in the collapse of the American bank Lehman Brothers in September 2008.
It depends on the importance of imported goods in the consumer price index and on whether lower import prices are passed on to consumers. 5 In the UK in the ten years from 1994 to 2004, the price of imported goods fell on average by one per cent per annum, so the direct effect of this on the consumer price index was quite marked. This shows up in the striking contrast between goods and services consumer price inflation (Chart 3). But the impact of greater competition does not stop with prices. Business tells us that greater competition between companies is encouraging them to protect their profits by cutting costs. This involves control of wage growth and the search for productivity improvements. This has been complemented by greater contestability in the labour market due to both greater migration and the potential for out-sourcing and relocation of production should wage demands become excessive. My view therefore is that the disinflationary pressure from globalisation may well have been more substantial than the direct estimates suggest, and this helps to explain why inflation has fallen throughout the world over the last 15 years from 30% in the early 1990s to about 4% in 2003. 6 This  4  The weight of manufacturing in UK gross value added was 14.7% in 2003. (United Kingdom Economic Accounts, 2006q1).

Not only has inflation been low, but we have avoided the large swings in output and employment that have characterised previous periods in UK economic history. We have seen employment grow from around 56% of the population at the trough in 1993 to over 60% now and unemployment fall back to levels not seen since the mid-1970s. GDP growth has been between 1% and 4.5% per annum throughout. To someone like me who was in the Treasury in the 70s and 80s when we experienced real booms and busts, the last 10 years have looked like a golden age (Chart 1). Of course we hoped that the reform of economic policy would bring greater stability, but the speed and extent of that success has been unexpected. When the MPC was created in 1997 and given responsibility for meeting the inflation target, it was told that whenever inflation was more than one percentage point away from the target the Governor would have to write a letter to the Chancellor explaining why this had occurred. The Bank’s current chief economist estimated that the Governor would need to write a letter on average one month in every two. 1 Even the current Governor thought that ‘given past experience of inflation volatility it is likely, even allowing for the change in policy regime, to restore the lost art of letter writing to British life’. 2 It is remarkable that not a single letter has needed to be written – yet.
Total credit is expanding broadly in line with normal growth in nominal GDP. Chart 22. Credit growth Per cent  24  24  20  20  Non-financial enterprises  16  16 Households  Total credit  12  12  8  8  4  4  0  0  -4 1997  -4 1998  1999  2000  2001  2002  2003  Source: Norges Bank  Chart 23. Enterprise credit and investment Nominal growth. Per cent 30  30 Credit  20  20  10  10  0  0  -10  -10  Fixed investment  -20  -20  -30  -30 1983  1987  1991  1995  1999  2003  Sources: Statistics Norway and Norges Bank  Developments in credit to enterprises shadow developments in their investments. Low credit growth indicates that mainland business investment has not yet picked up. Household debt has increased sharply since 1999. Developments in debt in the 1990s may partly be interpreted as a delayed adaptation to the deregulation of the housing and credit markets in the 1980s after many households experienced financial difficulties following the relaxation. Moreover, there now seems to be a tendency towards investing in property and incurring loans at a more mature age so that younger generations not only inherit dwellings, but debt as well. Both debt and wealth are on the rise for these more mature age groups.

It is admitted that the Treasury is actually free of foreign debt and virtually debt-free domestically, if one takes into account its deposit balance in the Central Bank. The Bank’s foreign reserves and equity have never been larger than they are today. However, it has been said that Iceland’s banks have grown substantially, which makes the foreign reserves proportionally smaller. It is appropriate to remember that banks in Iceland, as elsewhere, are responsible for their own operations, and they must demonstrate prudence and sound risk management. According to the banks’ own declarations, to which the Financial Supervisory Authority has not commented, their financing status is at least comparable to that of comparable foreign banks. Therefore, they need not rush into disadvantageous credit markets ahead of others. However, it cannot be denied that the Icelandic economy’s total debt is too high, which can be traced to the decisions made by financial institutions and other companies in the market. If the Central Bank’s foreign reserves are compared with those of several countries outside the largest currency zones, it can be seen that, according to information from the International Monetary Fund, Iceland’s reserves as a percentage of per capita income are equal to or greater than those in, for instance, Australia, Sweden, Canada, and New Zealand. In terms of importation of goods, Iceland’s position is also excellent. Only New Zealand is stronger overall. In terms of importation of goods and services, Iceland is well above average.