samchain/econo-pairs-v1 huggingface dataset:
There is still uncertainty about the estimate of the pandemic impact on the Russian economy’s potential, especially amid the current worsening of the epidemiological situation. Given such highly uneven trends in the economy and price movements, we will need to carry out an additional analysis of how the situation will be changing and whether we still have some room for cutting the key rate when making our key rate decisions in the future. It is hard to affirm this now. If the impact of one-off factors wanes quickly and inflation expectations reverse, it is entirely possible that there may be grounds for a further reduction in the key rate, yet this will not necessarily be the case. I would also like to emphasise that it is now crucial to maintain the robustness of the monetary policy to various scenarios. Our policy is aimed at keeping inflation close to 4% under any scenario of future developments. We are ending this year with another important step in our communication. We are starting to release our regular report ‘Regional Economy: Commentaries by Bank of Russia Main Branches’ on the Bank of Russia website. This report is prepared by our regional branches for the Board of Directors’ key rate meetings and will contain the most up-to-date information on the situation in the Russian regions. When preparing for decision-making, we usually consider economic trends in Russia in general and across regions and assess both statistics and survey findings. This helps us better understand the economic situation and its specifics.

The Committee seeks to align minimum capital requirements more closely with the best industry risk management practices available. This goal is accomplished by giving banks a range of increasingly sophisticated options for calculating capital charges. Banks will be expected to employ the capital adequacy method most appropriate to the sophistication and complexity of their operations and risk profiles. For credit risk, the range of options begins with the standardized approach and extends to the internal ratings-based (“IRB”) approach. The standardized approach is similar to the current Accord. Banks will be expected to allocate capital to their assets based on the risk weights assigned to various exposures. It improves on the original Accord by weighting those exposures based on each borrower’s external credit risk rating. Without question, the IRB approach is a major innovation of the New Accord. For the first time, banks will be permitted to rely on their own assessments of a borrower’s credit risk. The close alignment between the inputs to the regulatory capital calculations and banks’ internal risk assessments will facilitate a more risk-sensitive approach to minimum capital. Changes in a borrower’s credit quality will be directly reflected in the amount of capital held by banks. How will the New Basel Accord promote better corporate governance and strengthened risk management practices? Here, I will limit myself to emphasizing two key points. First, the Basel Committee has expressly designed the New Accord to provide tangible economic incentives for banks to adopt increasingly sophisticated risk management practices.
The other method, applied by the majority of central banks including the Riksbank, is to forecast how the economy will evolve over the next couple of years and adjust monetary policy accordingly. One complication here is that something unexpected can always happen, causing the economy to move in a different direction than that expected. For this reason the central bank must take account of different risks when setting the policy rate. The forecasts are produced by experts through the use of various statistical methods and models. The results are often presented in the shape of a main scenario and one or more alternative scenarios. A monetary policy that is based on forecasts requires more information about the economy than a rule-based policy, and according to its critics there is a risk that forecasters will overestimate their ability, perhaps leading to poorer results than would have been the case with a less complicated approach. Advocates of the method, on the other hand, say that we should make full use of the knowledge that we nevertheless have. Since a forecast-based monetary policy requires the analysis of many more variables than is the case for a simple rule, it is more difficult for external players to predict how the central bank is going to act. For this reason a forecast-based policy places high demands on the bank’s openness and transparency in relation to external parties, as well as on its ability to communicate. There are also other advantages associated with a forecast-based monetary policy.

The clarification of monetary policy that was published in 1999 can thus be applied to today’s situation: Out of consideration for developments in the real economy, i.e. growth and employment, in the somewhat longer term, we can refrain from lowering the repo rate now, even though a mechanical application of our rule of action could justify such a move. But should economic activity weaken, for example due to the risk scenario that the adjustment of the US deficits could trigger, the situation will be different. Then I can see reason to lower the policy rate further, especially if the weakening is coupled with a stronger krona. In such a situation I believe it would be an advantage that the repo rate is not even lower than it is today. 6  BIS Review 10/2005
The Ends So what could we hope to achieve by increasing citizens’ engagement with issues of economics and finance? My short answer to that question is a great deal. Economics, and economic policy, faces a “twin 1  deficits” problem – a deficit of public understanding and a deficit of public trust. Twin deficits, be they fiscal and external or trust and understanding, carry dangers for the economy and for economic policy. Closing them would, I believe, deliver significant benefits to society, to individuals and to policymakers who sit twixt the two. Here’s why. Let’s take public understanding of the economy. As the public themselves would be the first to admit, this is not high and not as high as we would wish. On economic and financial matters, there is often a yawning 1  Haldane (2017a). 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  understanding deficit on the part of the general public. That is not because the public are yawning at the prospect of engaging with these issues. To the contrary, surveys regularly show that a significant majority recognise the importance of economic and financial issues to their everyday lives. Around 80-90% say they would like economic and financial issues to be covered more comprehensively in the school curriculum. 2  It would be wrong, however, to think that public engagement only benefits the public. Just as important are the improvements to policymakers’ understanding of everyday economic issues.

House prices in Norway have on average risen by 9 per cent annually between 1995 and 2002. House prices have also increased considerably in other countries. A sharp and sustained rise in house prices might contribute to high credit growth even after prices have levelled off. Since only a portion of the housing stock is sold each year, some dwellings will be sold at a higher price than when they were last sold for a long period. This has contributed to sustaining the high level of growth in credit to households in Norway even after the rise in house prices moderated through 2002 and into 2003. It is easiest to sell dwellings in the largest cities and some specific areas are particularly attractive. Residential property is now a fairly liquid and attractive investment. A persistently high rate of increase in house prices may in isolation engender expectations of a further rise and may thus prove to be selfreinforcing for a period. 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. Sharp increases in asset prices and debt accumulation may pose a risk to economic stability. With a view to mitigating this risk, it will be appropriate in some situations to apply a somewhat longer-thannormal time horizon than two years to attain the inflation target.
Mr Noyer focuses on the challenges in Europe as seen from the point of view of the European Central Bank  Speech by Mr Christian Noyer, Vice-President of the European Central Bank, at the University of Antwerp on 26 October 1999. *  *  *  Introduction First of all, I should like to thank the organisers of the Kekulé Cyclus for inviting me to participate in such an interdisciplinary conference bringing together experts from different professional backgrounds. I will contribute to your discussions by focusing on the challenges we are facing in Europe, as seen from the point of view of the European Central Bank (ECB). Let me briefly recall that it was just a little over a year ago that the ECB was established and that for almost ten months now the Eurosystem – which consists of the ECB and the eleven national central banks of the Member States which have adopted the euro – has been responsible for monetary policy in the euro area. The introduction of the euro has been a historic event for the countries concerned, since it is the first time in monetary history that sovereign states have replaced their national currencies with a common currency and transferred their monetary policy competencies to a newly established supranational institution. The new monetary policy regime in the European Union (EU) is not only an important further step in European integration. It will also have far-reaching implications for the world economy and the international monetary system.

8 [20]  Could confidence in the inflation target have been maintained with a less expansionary policy? As I noted, some analysts would probably argue that it is important to defend the inflation target, but that this could have been done with a less expansionary policy, where the repo rate would not have needed to be cut below zero. This is a view that I have greater understanding for. However, there are many arguments against it. The expansionary policy conducted by the Riksbank has indeed led to inflation turning upwards and to long-term inflation expectations being once again at or very close to 2 per cent (see Figure 11). But the upturn in inflation has been bumpy and fragile and there are some signs that it has slowed down in recent months. Moreover, the upturn has to a fairly large degree been based on the krona being relatively weak and its sustainability rests on the assumption that the krona will not appreciate too rapidly going forward. It is very probable that developments would have looked quite different with a higher repo rate. And in this context the significance of a repo rate that is only half a percentage point higher should not be underestimated. It is not particularly difficult to imagine a scenario where the krona in such a case would have strengthened, possibly quite significantly, economic activity would have slowed down and inflation and inflation expectations would have turned downwards.
In June of this year, the preference clause favouring Swiss employees was abolished. A company in Switzerland may now employ EU nationals without first having to prove that an equally qualified person could not be found for the position in the country. Thanks to the agreement on the free movement of persons between Switzerland and the EU, Switzerland now has access to an extensive highly-trained workforce. It has not yet been possible to estimate just how much of this potential will be used. Up until now, there has been no major influx of people into Switzerland, although this may be attributable in part to the weak labour demand, which in turn is due to the current economic situation. In the medium term, we expect the proportion of labour coming from the EU to Switzerland to increase. However, opening up the Swiss labour market also gives rise to fears. People are concerned that Swiss salary levels will come under pressure and that employment conditions will deteriorate. In an effort to counteract any serious repercussions on the Swiss labour market, the authorities have implemented a number of accompanying measures. These, however, will not be able to completely prevent competitive pressures in Switzerland from intensifying. The attempt to avert any wage adjustments by introducing minimum wages across the board, for instance, would be counterproductive. Switzerland would be unable to benefit from the opportunities that this opening up presents. The Swiss labour market would become less flexible, and the country would lose one of its most crucial locational advantages.

This leaves a third alternative - that is to boost income through stronger economic growth. A majority of people favour this solution, yet there is no consensus as to how it might be realised. Some support stimulating demand, especially with a view toward monetary policy. Others put the emphasis on supporting the market forces by deregulation and liberalisation. However, these same people will often shy away from drastic measures as soon as their own interests are concerned. The National Bank can support economic growth with its monetary policy as long as the goal of price stability is not jeopardised. This is the case when economic growth reaches capacity limits. However, monetary policy cannot increase the growth potential. To achieve this, measures are needed that provide more room for manoeuvre and foster initiative and readiness for innovation on the part of individuals and corporations. In recent years, Switzerland has seen a number of reforms that head in the right direction and - in some cases - that have proven to be successful. For instance, the telecommunications sector and the hotel and restaurant industry have been liberalised, the cartel laws revised and - last but not least labour market policies have seen changes as a result of the free movement of persons between the EU and Switzerland. Admittedly, some of these reforms have been implemented only half-heartedly and - what’s more - under pressure from outside.
And this is not good for the confidence and general acceptance of the public. However, if we go back to the glory days of Islamic civilization, diversity and differences of opinions were celebrated and one of the primary reasons for Islamic civilization to prosper. In this respect I very much believe that mutual recognition and diversity of opinions on Shariah matters would go a long way in resolving different interpretation and understanding. In fact diversity of opinions and interpretation would enable resolution of problems faced by the ummah who live in different systems, cultures and customs. Start small but with confidence and achieve success with a series of well-targeted group. Action speaks louder than words. The starting point does not require focus on highend Islamic financial products such as sukuk and fund management. Instead, start where it matters most. Embark on initiatives that could assist the low and middle income groups. Devise a scheme that could provide alternative for source of funds for the small and medium enterprises (SMEs). Start with basic banking facilities; saving accounts, current accounts and term deposits. Provide financing facilities that are simple and easy to understand such as microfinancing and microtakaful. In Africa, the retail banking market segment has an enormous potential for growth. Currently, less than five percent of individuals aged 15 and above are likely to borrow from a formal financial institution in Sub-Saharan Africa and the MENA region. Many adults in Africa use informal methods to save and borrow.

In Malaysia, both the Federal Government and the central bank 2  BIS central bankers’ speeches  issued long and short term papers that formed the basis for the creation of a vibrant Islamic money market and a deep and sophisticated sukuk market. Another lesson that can be learnt is that central bank can play a catalytic role in promoting a new market. Central banks have the capacity to issue Shariah compliant money market instruments to enable investment in short term papers. It could assist in the liquidity management of Islamic banks. It also gives an opportunity for the public at large to invest in short term Shariah-compliant papers. At the same time, conventional investors have an opportunity to invest in a new asset class. Usage of Waqf. Another interesting area for Islamic finance and this applies, not only to new entrants but also established finance jurisdictions, is the innovative use of waqf in areas underserved by the present financial system. The endowment received from waqf, together with the revenue generated from the waqf properties can assist in the socio-economic uplift of the community. Utilisation of waqf by Islamic microfinance institutions can potentially create more options in offering interest-free financing in the economy. Islamic financial institutions and corporate organisations can also consider including waqf as part of their corporate social responsibility programmes for more suitable solutions that have profound impact over the long term, particularly in education.
James Meade advanced the idea in his 1977 Nobel Prize lecture,2 and my MPC colleague, Martin Weale, spent much of the early part of his career working with Meade to develop the idea.3 Samuel Brittan, coming from a slightly different perspective, wrote an important IEA pamphlet in 1981, which argued that controlling nominal spending was what monetarists were really seeking to achieve. I even wrote my PhD thesis4 on the topic over thirty years ago. There is an important distinction between targeting the level or the growth of nominal income. The recent revival of academic interest in the issue relates to the scope for a target for the level of nominal income to provide additional traction for monetary policy when policy rates reach their zero lower bound. Some of the recent public commentary, however, has centred on the possible virtues of switching to a target for nominal income growth, so let me deal with that case first. In a normal environment, nominal income growth and inflation targets generate similar responses to aggregate demand shocks. But a nominal income target is more “forgiving” than a narrowly-defined inflation target in the case of cost shocks. An adverse cost shock simultaneously tends to raise the price level and reduce output. Stabilising nominal income requires a one-for-one trade-off in the response, whereas stabilising inflation, or the price level, requires that all the burden of the shock is transferred onto output. That is the basic case put forward for the superiority of a nominal income target over a strict inflation target.

But the Germans and the European citizens do not need to be afraid: We have delivered and we will deliver price stability. Inflation in Europe rose to 2.2% in December, the highest rate for two years. We are always concerned if inflation rises and are following developments very closely. But the figures for December can be accounted for, above all, by rising energy prices. Let me say something about the longer-term figures. In the last 12 years the average rate of inflation in the euro area has been 1.97 %, and in Germany only 1.5 %. Those are better figures than at any time in the 50 years before the euro was introduced. In Germany, inflation was 2.2 % in the 1990s, 2.8% in the 1980s and even higher in the 1970s. These figures speak for themselves. But why does nearly everybody have the impression that the euro has made life more expensive? That may have been the case ten years ago. I do not believe that this perception is shared today by a significant number of fellow citizens. The ECB has ensured that the euro is a credible and stable store of value. Why then do you think that one in two Germans wants the Deutsche Mark back? Once again: The euro has ensured stable prices. In the last 12 years the price level has been more stable in the Federal Republic than over the previous 50 years. The Germans, too, are aware of how valuable it is.
On the other hand, we expect to see weak developments in exports and for example in investment in commercial buildings. The Norwegian krone has appreciated markedly this year. Developments in wage settlements have probably been an important driving force. High wage growth leads to high interest rates, making it attractive to take krone positions. As a result, the Norwegian krone appreciates. We must be prepared for fluctuations in the krone exchange rate in line with that observed in other countries. There is free trade in goods and services and free capital movements. The krone is floating. This means that economic agents cannot assume that the krone will be stable against the euro, against the dollar or against a weighted average of foreign currencies. The krone does not fluctuate any more or less than other currencies. A large share of petroleum revenues is invested in foreign equities and bonds through the Petroleum Fund. Changes in oil prices influence the size of the Fund, but have little effect on the domestic use of petroleum revenues. The Petroleum Fund thus serves as a buffer against fluctuations in oil prices and shields the krone exchange rate. Nevertheless, we have been prepared for fluctuations in the krone exchange rate on a par with changes in other countries. Over the last two years, the appreciation of the krone has been driven by the wide and increased interest rate differential between Norway and other countries, which reflects the relatively high level of wage growth in Norway.

Monetary policy that is oriented towards low and stable inflation will contribute to a stable krone exchange rate over time. If we take steps to counteract an appreciation of the krone when there are pressures in the economy, we reduce the possibility of curbing inflation and increase the risk of fluctuations in the economy. Maintaining stability in the internal value of the krone must thus take precedence. The implementation of monetary policy has been delegated to Norges Bank. Norges Bank sets the interest rate on the basis of our understanding of the regulation. Our interpretation places emphasis on the Government’s rationale behind the regulation, on the objective as formulated in the first paragraph and on our knowledge about the relationships between the interest rate, the krone exchange rate, output, employment and inflation. The interest rate influences price inflation indirectly via domestic demand and via its effect on the exchange rate. When interest rates rise, it is more profitable to save and more costly to borrow. This has a dampening impact on consumption and investment. Lower demand in turn curbs the rise in prices and wages. Higher interest rates make it more attractive to take krone positions and borrow in foreign currency. As a result, higher interest rates normally lead to an appreciation of the krone. This reduces prices for imported goods. In addition, a strong krone curbs activity, profitability and the capacity to cover labour costs in the internationally exposed sector. It is important to be aware of the relationships between employment, output and inflation.