samchain/econo-pairs-v1 huggingface dataset:
By contrast, monetary tightening may be implemented at an earlier stage, should the recovery in economic activity turn out to be faster than expected. The weakness in the global economic outlook not only delays recovery in external demand but also leads to continuing expansionary monetary policies across developed economies, which in turn fuel domestic demand through an acceleration of capital inflows to emerging markets. Should capital inflows continue, the divergence in the growth rates between domestic and external demand is likely to intensify in the forthcoming period. Additional policy instruments, other than the short-term policy rates, would be needed to curb risks emanating from this channel. In this respect, should the disparity between domestic demand and external demand continue and be accompanied by rapid credit expansion and deterioration of the current account balance, all to lead to financial stability concerns, it would be necessary to utilize other monetary policy instruments such as reserve requirement ratios and liquidity management facilities more effectively. Food and commodity price inflation has accelerated recently. The aggregate demand is not yet at a level to exert inflationary pressures. Along with this, the strength of the Turkish lira limits the pass-through from food and commodity inflation to core goods and services inflation. However, the potential second-round effects continue to pose a risk, if increases in food and commodity prices persist.

Should monetary policy try to stabilize a broader set of indicators in the future, not just prices of consumer goods, but also real-estate or other asset prices? Does it make sense to have a separate currency but not to have an autonomous monetary policy, like the Baltic countries and Bulgaria, or to have a separate currency but not to have an effective lender of last resort, like Iceland? Doesn't the system of exchange-rate pegs, quasi-pegs or currency boards increase imbalances of those who are pegged, and thus their vulnerability in a crisis? These questions are important, but they are not being properly discussed in the current debate. Many forget that the state's role in the financial sector is already huge. Central banks, finance ministries and various state agencies across the globe do regulate and supervise the financial industry more, not less, than many other industries. Yet that is precisely why every further tightening of the screws should be carefully considered and analyzed, not adopted  BIS Review 10/2009  1  under pressure or threat, hastily or imprudently. One should bear in mind that regulation never distinguishes the bad banks from the good ones. And even this crisis has revealed that many financial institutions are in good shape and coping with its consequences quite well. Although many people won't admit it, new rules being drawn up today will radically affect the financial market tomorrow and beyond.
As the role and relevance of Islamic finance in the global financial system gains significance, it will not only increase its potential to contribute to global financial stability but also towards strengthening global growth." It is my honour to be invited to speak at this Seminar on Islamic Finance: During and After the Global Financial Crisis, jointly organised by the World Bank, the Islamic Financial Services Board (IFSB), the Islamic Development Bank (IDB) and the Institute of International Finance (IIF). This seminar takes place at a time in world history that is characterised by an unprecedented global financial instability, that has now precipitated a synchronised global economic recession. Although signs of an impending recovery in the world economy have appeared in the horizon, the pervasively virulent and far reaching repercussions unleashed by the crisis has shaken the foundations of the global financial system. This damage has yet to be repaired and rebuilt. This has sparked the international call for the reform of the financial architecture to one that will best serve the world economy, to one that is more resilient to shocks and to one that would reduce the prospect for future financial crises. History has shown that there have been more than a hundred distinct banking crises in this recent three decades. There is therefore an even more urgent need to find an enduring solution to ensure the stability of financial systems.

The two policies I just mentioned – energy and infrastructure – , aside from their incidence in investment, could also result in higher productivity. Regarding employment, a recurrent topic in our country’s policy debates is female participation in the workforce. Despite some increases in recent years, it is still below the average of OECD economies (figure 3). As our population ages and grows at a slower pace, the larger female labor force participation can be a significant ingredient to boost our medium-term growth. Another ingredient could be extending the working life span of individuals, a trend that is gaining importance in many countries as the fraction of population over 65 is growing rapidly and is still able to contribute their bit to the economy. Finally, the challenges relating to increasing labor productivity that everybody recognizes are mainly to improve our educational and training systems. Now, let me describe the macroeconomic scenario that we see as the most likely for the coming quarters, and its associated risks. Macroeconomic scenario Annual headline inflation has remained above 4 percent, but with moderate variations in the past few months. This was more visible in the evolution of the CPIEFE – the CPI excluding food goods and energy prices – reflecting, on one hand, that the pass-through of the peso depreciation to inflation has been a significant development, but declining in intensity as time passes and, on the other, that the weak performance of the economy is already easing the pressure on prices.
The vaccination programme has improved the outlook and the UK economy is forecast to recover rapidly thereafter with growth of 14% in the year to 2022Q1, when GDP is forecast to return to its pre-Covid level. But because of the structural changes and permanent scarring resulting from the pandemic output is assumed not to make up all of the lost ground and so doesn’t return to its pre-crisis trend29. Figure 8: Annual GDP growth since 1700 25  Annual growth in real GDP (%)  20  15 10 5 0 -5 -10 -15 -20 1700 1710 1720 1730 1740 1750 1760 1770 1780 1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020  Source: A millennium of macroeconomic data, updated with the latest ONS data from 1948. 29  More in my speech ‘The potential long-term effects of Covid’ 15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  The very welcome progress with the vaccination programme has reduced a number of the uncertainties and risks, but they have by no means gone away entirely. Consistent with that, our latest GDP forecast published in February still features a very wide fan throughout as well as a downside skew to GDP in the near term (Figure 9). And while unemployment is forecast to peak at 7.8% in 2021Q3 and fall thereafter the risks remain skewed towards higher unemployment.

QE as an economic policy tool - what does it do and how should we use it? Speech given by Dave Ramsden, Deputy Governor for Markets and Banking  Peter Sinclair Town Hall lecture, University of Birmingham 17th February 2021  With thanks to Tom Smith, Amy Lee and Jon Bridges for their assistance in preparing these remarks, and to Bank colleagues including Andrew Hauser, Maggie Illingworth, Mike Joyce, Nick McLaren, Rhys Phillips, and Beth Blowers for their many helpful comments and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction It’s a pleasure to be speaking today at the University of Birmingham, and an honour to be doing so at the third Peter Sinclair Town Hall lecture. My focus today is on quantitative easing – QE for short – and its use as an economic policy tool. The Bank of England’s internal Independent Evaluation Office (IEO) published its own evaluation of QE earlier this year, where it noted that “there remain open debates about how QE works in different states of the world, its broader interlinkages and its potential limitations”.1 What I want to use my lecture for today is to set out my own views on QE as a policy tool, as well as contribute some thoughts to some of those debates. Before I do that, though, I want to start with my own recollections of Peter.
It allows insurance companies to recognise as capital  Page 4  up-front a part of the income they expect to earn on their assets in the future, but only as long as they can show that the cashflows they expect to receive from those assets closely match the payments they have undertaken to make to their insurance policyholders (hence “matching” adjustment). This is therefore most relevant for the annuity business, where insurance companies promise to pay individuals’ pensions far into the future. You might ask why the regulator favours such an arrangement, which is not common in other bits of regulation, when perhaps it would be more prudent to make insurance companies wait until those returns (for instance, interest payments on corporate bonds) are actually paid to them before recognising them as capital which could be paid out to shareholders. The reason is that we think it protects policyholders if insurance companies are incentivised to invest in assets which will produce cash at the right time, so that insurance companies are not scrabbling around for the right assets when they have to make payments to pensioners in the future. [2] However, you would be right to think that if we allow such an arrangement we must operate it with a very high degree of confidence that those future returns will in fact materialise – in other words that insurance companies do not recognise up-front returns which then later don’t show up. Second, why does the MA matter? For me there are two reasons.

There is a case that we should take some notice of this in the way the regime operates, rather than just ignore it. In summary, our experience of operating the MA suggests to us that the broad mechanism works but that the EU design makes insufficient allowance for uncertainty, the difference in riskiness between assets, and signals from the market. As a result of this, we are concerned that it overestimates the portion of future returns which can confidently be assumed to be free of risk for insurance companies and therefore safely banked as capital up-front. Some might suggest that this is fine, because insurance capital requirements are set to cover a 1in-200 year stress. [6] But that mixes up capital requirements and capital resources. The risk of a weak MA is that capital resources could be over-stated, and strong capital requirements are no defence if the capital being used to meet those requirements is not sufficiently solid. [7] The system as currently set up provides a particularly strong incentive for insurers to hunt out assets which happen to have a high return relative to their credit rating. Here is an intuitive way to think about the risk in this if taken too far, which our team calls the “high-spread-for-rating assets” – or more colloquially the “too-good-to-be-true assets” – issue. Imagine you have two bonds. [8] Both mature at the same time, both are in sterling and both have the same credit rating.
Given the fact that the causes and consequences of this crisis have been broadly identified and discussed, in the first part of my speech I will focus more on the main findings of the professional discussion that is taking place nowadays to identify a new financial supervision approach. I am sure you will elaborate on these issues further during this Conference. In the second part of my speech, I will try to give you more detailed information on how we at the Bank of Albania are thinking about the future approach of the public authorities and of the financial industry, in relation to necessary measures to strengthen financial stability. Very shortly I want to reiterate what has now become clear to many: the recent crisis was a consequence of wrong incentives which supported unbalanced financial activity development and misconception of risk assessment, pricing and management. Such wrong incentives were present not only to the financial industry and markets, but also to the balance sheet of households, businesses and entire countries. Given the nature, the size and the impact of this crisis, not only to the financial industry and markets but also to the real economy, public authorities in many countries were forced to adopt swift, coordinated and extraordinary measures, both in the area of monetary and fiscal policies. Central banks abandoned almost any restriction and even adopted unconventional measures in providing ample and low-cost liquidity to the financial markets.

Ardian Fullani: Financial supervision and measures to strengthen financial stability Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the International Conference for the 10th Anniversary of the Central Bank of the Republic of Kosovo, Prishtina, 30 October 2009. *  *  *  Dear Governor Rexhepi, Distinguished ladies and gentlemen, It is a pleasure for me to participate in this Conference which is perfectly organized by the Central Bank of the Republic of Kosovo, and to witness the amazing progress this institution has achieved in such a short but intense period of time. The energy and desire of the local staff to contribute to the history of this institution, has been rightly channeled by the vision and experience of several managing professionals that have given a valuable contribution in chairing this institution in the last years. I am sure this story will continue to be a successful one, based on the commitment of the management of the Central Bank of Kosovo to achieve and comply with the best work organizational and efficiency standards, by pursuing a clear long-term policy of investing in the quality of its personnel, and by supporting actions that contribute to maintaining fruitful inter-institutional cooperation. In addition, I want to thank the organizers for giving me the honor to speak in front of you today, regarding a topic that has become so relevant in the last year, following this unprecedented international financial crisis.
22 January 2018  Address to the Club Siglo XXI Luis M. Linde Governor  Introduction Let me begin by thanking the Chairman of the Club Siglo XXI, and my good friend, Chencho Arias, and the management of the Club for their kind invitation to me to join you today. Over the years this Club has seen debate on all – or practically all – matters, and naturally on economics too, which will be our subject today. My address will focus on the European and Spanish economic situation. Situation of the European economy With a decade now having elapsed since the international financial crisis began, we can say that the euro area is finally in a phase of sound and vigorous economic expansion. GDP growth is expected to have posted a growth rate of around 2.5% in 2017, a figure not seen since the early years of the monetary union. The favourable economic situation extends, moreover, to all corners of the area, including the economy that has undergone the greatest difficulties, namely Greece. It is expected that in the coming months Greece may successfully conclude its third financial assistance programme. Further evidence of the soundness of the recovery is the dynamism of business investment following years in which the expansion of household demand, acting as the sole engine of growth, appeared to be decoupled from the need for firms to increase their capital. Reflecting the strength of the expansion has been a notable reduction in unemployment rates, which are generally standing at pre-crisis levels.

3/6  Against this background, household and business confidence has reached levels at an alltime high since the creation of the monetary union, suggesting that growth will be maintained in the coming quarters. Most analysts have revised their GDP growth forecasts upwards, placing them for this year at around 2.3%. The economic expansion has not yet or hardly been reflected in prices. Core inflation – which excludes the most volatile components – has remained anchored at around 1% for several years now. Behind this lies the moderation that wage growth continues to show across the board, despite the fact that in some economies unemployment levels are low in historical terms. Highly diverse factors contribute to explaining the phenomenon of wage moderation. Of note, in my view, is the role played by the low productivity growth in the European economies and the greater importance that may have been accorded to indexing to past inflation when negotiating wages in the context of persistently very low inflation rates in recent years. The significance of part-time employment in the current recovery and the inflow of immigrants are also factors that may have checked wage growth in some economies. The fact that wage restraint is not a development exclusive to the euro area suggests that factors of a more global nature may also be playing some part.
10.  recently Ricardo Caballero 13 presented his theory that (financial) asset shortages are at the heart of the global imbalances problem, and his idea was also put forward by Raghuram Rajan 14 speaking recently on (real, fixed) asset shortages. Asset shortages hypothesis  5  Rajan R. (2006) “Perspectives on Global Imbalances”, Remarks by Economic Counsellor and Director of IMF Research Department at the Global Financial Imbalances Conference London, United Kingdom, 23 January 2006; and Rato R. (2006) “Shared Responsibilities: Solving the Problem of Global Imbalances”, Speech of the International Monetary Fund Managing Director at the University of California at Berkeley, 3 February 2006. 6  Greenspan A., Kennedy J. (2005) “Estimates of Home Mortgage Originations, Repayments, and Debt on One-to-FourFamily Residences.” Federal Reserve Board, Finance and Economics Discussion Series Paper 2005-41; Lansing K. (2005) “Spendthrift Nation”, FRBSF Economic Letter, November 2005. 7  Greenspan A. (2005) “Current Account” presentation at Advancing Enterprise 2005 Conference (London, United Kingdom), 4 February 2005; OECD (2004) “Economic outlook”, June 2004; Faruqee H., Laxton D., Muir D., Pesenti P. (2005) “Current Accounts and Global Rebalancing in a Multi-Country Simulation Model”, presented at the NBER conference, “G-7 Current Account Imbalances: Sustainability and Adjustment”, 1–2 June 2005; Chinn M. (2005) “Getting Serious about Twin Deficits”, working paper, The Bernard and Irene Schwartz Series on the Future of American Competitiveness, CSR No. 10, September 2005.

BIS Review 124/2006  1  3.  global investment drought hypothesis advocated by the IMF 5 , which puts emphasis on low Asian investment following the Asian crisis in creating savings-investment imbalances in these countries;  4.  negative US savings, in the household sector stimulated by stock exchange bubble and later by a lot of local housing bubbles 6 ; and in the public sector, however there are very different estimates about the impact of the budget deficit in the United States on the US current account deficit ranging from 0.2 to 0.5 7 ;  5.  effects of Asian crises in 1990s combined with the pursuance of export-led growth model in Asia 8 ;  6.  shocks changing the relative investment prospects of various parts of the global economy 9 , such as productivity shock in the United States in the mid-1990s or the inability of Asian countries to generate good quality financial assets;  7.  much higher rates of return enjoyed by United States on its foreign assets than the cost of its foreign liabilities 10 , this cushioned the trade deficit impact on net international investment position and was labelled as US ‘exorbitant privilege’;  8.  global imbalances are optimal choices of rational US consumers 11 , who expect that the USA will account for a bigger share of global GDP in the future;  9.  there are theories about imbalances originating from the statistical offices’ failure to account properly for the US exports of ‘dark matter’ 12 .
The objectives of bringing inflation back to the target of 2½ per cent and anchoring inflation expectations imply a continued low interest rate. The krone exchange rate appreciated somewhat following the interest rate increase in June. On the other hand, output growth is high. The objective of stabilising developments in output may, in isolation, imply a higher interest rate. High capacity utilisation may generate a continued sharp rise in property prices and household borrowing. This could be a source of instability in demand and output in the somewhat longer run. The Executive Board’s assessment in the June Inflation Report was that the interest rate may gradually – in small, not too frequent steps – be brought up towards a more normal level if economic developments are approximately as projected in the Report. Such an interest rate path was considered to provide a reasonable balance between the objective of stabilising inflation at target and the objective of stabilising growth in output and employment. It was the Executive Board’s assessment that the sight deposit rate should lie in the interval 1¾ - 2¾ per cent in the period to the publication of the next Inflation Report on 2 November. At the monetary policy meeting of 30 June, the sight deposit rate was increased by ¼ percentage point to 2 per cent.

This may suggest that saving in the US is somewhat lower and investment somewhat higher, but the impact is now considerably greater than implied by demographic factors alone. The imbalances may persist for a period. International capital markets are deep and liquid with an ample supply of credit for US borrowers. If creditors begin to fear a fall in prices and withdraw from the market, substantial corrections may nevertheless be triggered. This may lead to higher interest rates and perhaps also a fall in US equity markets that spills over to other countries’ financial markets. In that case, the dollar will also depreciate. The household debt burden in the US may be another source of instability if households abruptly reduce both housing demand and consumption. We assume that growth will moderate somewhat in the US in the period ahead. A more pronounced downturn in the US cannot be ruled out, however. An abrupt and pronounced downturn in the US will lead quite rapidly to falling growth rates in the entire OECD area. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and the largely export-based growth in Asian countries. Countries other than the US must therefore also contribute in order to prevent growth in the global economy from faltering. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower US demand. The challenges are perhaps particularly demanding in Japan and some large European countries.