samchain/econo-pairs-v1 huggingface dataset:
BIS Review 88/2007  1  Strong GDP growth and investment 8.0  31.0  GDP growth (%)  7.0  29.0  Investment (%GDP)  6.0  27.0  5.0 25.0  4.0 3.0  23.0  2.0  21.0  1.0 19.0  0.0 -1.0  2001  2002  2003  2004  2005  2006  2007F  -2.0  17.0 15.0  Banking system health strengthening  Net NPL  23  Return on Assets  2.0 1.8 1.6  18  1.4 1.2  13  1.0 0.8  8  0.6 3  0.4 0.2  -2  2  2002  2003  2004  2005  2006  0.0  BIS Review 88/2007  Unemployment declining (%) 13 12 11 10 9 8 7 6 5 4 1995  1996  1997  1998  1999  2000  2001  2002  2003  2004  2005  2006  Public debt declining (% of GDP) External Government Debt  58  59  45  46  45  2002  2003  2004  BIS Review 88/2007  60  Domestic Government Debt  58  50  53  47  44  40  2005  2006  2007F  3  As you may have noted, just yesterday, Standard & Poors revised the outlook for Sri Lanka from negative to stable and that is indeed a useful confirmation of the success of the manner in which the economy is progressing.

Ajith Nivard Cabraal: Inequality, poverty and development Inaugural address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at Annual Sessions of the Sri Lanka Economic Association (SLEA), Colombo, 10 August 2007. *  *  *  Mr. Chairman, Distinguished Invitees, Ladies and Gentlemen, At the outset, I wish to congratulate the Sri Lanka Economic Association (SLEA) for their initiative at organizing this important and timely event, the Annual Session focusing on Inequality, Poverty and Development. This forum would give a wonderful opportunity to all the participants to share their valuable thoughts and eventually enable them to contribute to the prosperity of this country and the well-being of our people. I am also delighted to have been invited to deliver the inaugural address to this distinguished audience and I must say that I consider it a great honour and a privilege. The SLEA has been organizing events of this nature for many years and at most such events I have been an active participant. I have myself benefited immensely from these fora, and I know most of you academics, and professionals have also gained from these well balanced sessions and fruitful discussions. Further, the themes that have been selected by SLEA and the calibre of the resource persons they have invited during the past prove their willingness to make an important contribution to the development in this country.
In several parts of the business sector, however, the shortage was greater than normal, for example in the manufacturing industry and the construction industry, and for several types of labour, for example technical white-collar workers in the industrial sector and computer consultants (see Figure 21). The fact that the shortage of labour is already so high even though unemployment is still higher than normal indicates that matching on the labour market has deteriorated. This is also indicated by the Beverage curve, which shows the relation between unemployment and vacancies. This has shifted outwards, that is a certain level of vacancies is compatible with a higher rate of unemployment. In part, this may be a cyclical phenomenon, but the change is so large that it may also relate to a structural deterioration (see Figure 22). 16  One difficulty at present is to assess whether the normal rate of unemployment has changed due to the financial crisis and economic policy. In connection with a severe downturn, the sustainable rate of unemployment (NAIRU) usually increases, at least initially. But the NAIRU will probably also be affected by the labour-market reforms implemented in recent years. Some of these reforms will probably reduce the NAIRU while others may increase it. It remains to be seen what the net result of these factors will be. BIS central bankers’ speeches  9  Repo rate level I also believe that we should take the level of the repo rate into account when deciding on monetary policy.

Inflation increased to a level that was tangibly higher than the inflation target, resource utilisation was higher than normal and there was a rapid expansion of credit. Despite this, the repo rate was lower than normal for most of the period leading up to the crisis. A more rapid increase of the repo rate would have been better. We did not foresee the financial crisis, but once it hit the Swedish economy with full force in September 2008 the Riksbank acted quickly and forcefully. This mainly concerned measures to preserve financial stability. However, the expansionary monetary policy conducted by the Riksbank also played an important role in reducing the severity of the downturn that followed in the wake of the financial crisis. Looking forward, I think that the repo rate should be raised at every meeting this year, considering the economic development we envisaged at the last monetary policy meeting. If inflation becomes higher than we had expected, it may be necessary to raise the repo rate to a normal level of around 4 per cent as soon as next year. The average for the repo rate over the last 10 years cannot be taken as a starting point for what the average repo rate should be in the longer term. However, at the same time, I am, of course, prepared to reassess my view of the direction of monetary policy if the external conditions should change significantly, as they did in September 2008. There are those who think that monetary policy is too tight.
Temporary or provisional financing is better than none, but a clear-cut schedule on how the very large debt should be financed over the next ten or twenty years must be made if investors and trading partners are to have confidence or a clear idea of what they are dealing with, and I think that is essential. How central banking will be done is also important. The Bank of Thailand itself is being revolutionised. The pay system will change, the promotion system will change and career development has been instituted. Risk management supervision will be instituted from the first of January next year. Simple things such as a letter of transmittal of the supervision team to the manager of the bank will be required. This may seem trivial, but it will put responsibility firmly on the supervisors, which was never possible before because supervision missions went whenever they felt like it and did not tell anybody except the banks. It also makes job control of the supervisors impossible and it is very dangerous to allow people with criminal prosecution capabilities to work in this manner. The most important thing about the new central bank though is probably to keep it really independent. Thailand is now quite a complicated place, a large economy with considerable sophistication. The role of the central bank in helping finance development and directing among the sectors of the economy will soon no longer be possible. If the central bank could keep the economy stable, that would be a major achievement.

The relative importance of consumption in the economy has increased from 56% in 1998 to 61% of GDP in 2002. The savings rate has, nevertheless, remained high at 35% of GDP, having declined from a peak of 42.2% in 1998. While household consumption and private investment would continue to remain important in sustaining domestic demand and economic activity, this needs to be balanced against the need to save. While there is potential to increase consumption further, of importance is for households to improve the management and planning of their finances over the different stages of their lives. Indeed, financial planning is essential to sustain living standards and long-term financial security. With the rapid development of the financial system and the broader array of financial products and services available to consumers, there is an increasing need for Malaysians to make wise savings and investment decisions that will have lasting implications for their financial well-being. Such financial planning and management will determine the extent of consumption expenditure, the indebtedness and the savings that is possible at the respective stages of one's life. The strengthening of domestic demand in our economy has also been supported by increased lending by banks, including to households. For a number of advanced economies, this trend has become a source of concern. This is in view of their rising household debt that have exceeded prudent levels in the range of 80-100% of GDP. Household indebtedness in Malaysia has, however, remained within prudent levels at 60% of GDP.
At the same time, however, employers are claiming that the inflation target is no longer an obvious startingpoint. According to the Swedish Association of Industrial Employers, it is instead competitiveness and wage outcomes in the euro area that constitute their benchmark. 3 The implications of this are not obvious. Ultimately, the outcome depends on each respective party’s negotiating strength. But since wage increases in Germany, for example, have tended to be quite modest and since the industrial sector’s wage agreements in turn constitute a benchmark for other collective agreements in Sweden, it is conceivable that this could have contributed to the flat Phillips curve since 2011 in Figure 4. In the long term, however, this should not be a major problem as the euro area has an inflation target of “close to 2 per cent”, i.e. very close to our own target. This should imply that wage increases will also be higher in the euro area going forward. But tensions may arise periodically, of course. All in all, therefore, there are numerous feasible explanations for why wage increases have been relatively low despite good economic development. But so far we have no definitive answer to why it is like this nor to how permanent the phenomenon is. Research on the Phillips curve ongoing As I mentioned, the discussion about the Phillips curve is international to a high degree. Quite lively debate has been taking place in various countries recently centred on intensive estimation of Phillips curves, using slightly different specifications and different methods.

This occurs not only inside Sweden but also in the form of teleworking from other countries in organisations that are located in Sweden. Teleworking makes it possible to use the labour force more flexibly over the business cycle, so that the work can be part-time when economic activity is low and full-time when activity is high. The third cause has to do with changes of institutions in a broad sense. A concrete Swedish example is that more and more collective agreements contain agreements on working time “banks”. According to these agreements, the number of hours worked for an employee can be redistributed over the business cycle. Another example is the emergence of temporary employment agencies in Sweden. From once upon a time being illegal, the industry is currently about 80,000 strong. In 2017, 250,000 were employed by the temporary employment industry in the areas of temporary staffing, career transition and direct recruitment. In Sweden, we have also seen greater labour supply among older people. According to the LFS for the first quarter of 2018, almost four per cent of those employed were between 65 and 74 years old. One can assume that their labour supply is very flexible. If we add all these explanations together, it is perhaps not so strange that the correlation between resource utilisation and nominal wage increases seems to have weakened in recent years. Other explanations also feasible But there are also other feasible explanations for the observation in Figure 4.
We may also be faced with unexpected and unusual situations, as was the case with Covid-19. Avoiding this kind of shocks completely is an impossible endeavor. What we can do is improve our capacity to cope with them. The Central Bank of Chile took a step forward in that direction by activating the Countercyclical Capital Buffer last month. As we reported then, this is a precautionary measure. Notwithstanding the fact that the macroeconomic scenario has evolved in line with expectations, as we confirmed in this Report, we have mentioned external risk scenarios of a macro-financial nature that, though unlikely, may have a high impact. Thus, we have considered it necessary to have a capital buffer, the release of which by the authority will help mitigate their amplifying effects on the evolution of credit to households and businesses. We have also made progress by initiating a program to replenish and expand our international reserves a few days ago. The purpose of this program is to strengthen the country’s international liquidity position. With this, the Bank will contribute to the necessary process of recovering the slack that every segment of our economy must carry out. Thus, as of Tuesday, 13 June, we began a $ billion forex purchase process, which will last for a period of twelve months. This will be executed through regular dollar purchases of $ million per day through competitive auctions, and its monetary effects will be sterilized so as not to affect the monetary policy stance.

The developments I have just described offer some insights into how the future steady state risk management framework might look. At the moment, I see four key features: First, while the temporary collateral framework has successfully eased potential collateral shortages, it could be argued that it should not become part of the regular framework. As liquidity demand declines, there will also be less need for an expanded set of eligible collateral. Whether some temporary measures might be transformed into a state-contingent framework, ready to be activated again in the future if circumstances so require, is an open question. As experience shows, each crisis needs a tailored response. Second, we will need to keep the flexibility to adjust the collateral framework to financial innovations, especially when it comes to complex new financial products. The new “simple, transparent and standardised” securitisation regulation is a case in point. It will allow us to better assess the collateral we accept. In a similar way, we will need to forcefully deal with new types of securities, such as conditional pass-through covered bonds, whose risks may not yet have been fully appreciated. 3/4  BIS central bankers' speeches  Third, we will have to retain the risk control frameworks for the asset purchase programmes beyond the horizon of our net asset purchases. As long as we keep outright portfolios on our balance sheet, the reasons behind the risk control measures, including eligibility criteria, purchase limits, benchmarks ensuring diversification and the different risk-sharing agreements, will continue to apply.
In recent months, Malta’s HICP inflation may have been biased upwards because of methodological changes related to the measurement of tourist accommodation. Meanwhile the RPI, which is unaffected by accommodation prices, stood at 2.9%. It is the RPI that determines with a lag the COLA increase. The core RPI inflation rate, which is a good gauge of persistent inflation, stood at 2.0%. BIS central bankers’ speeches  3  On the other hand, a number of labour market indicators remain positive. As seen in Chart 8, the most recent LFS unemployment rate is 6.5%, the same as it was on average in 2007, prior to the euro area crisis. In fact, Malta’s unemployment rate is at the lower end of national unemployment rates across the euro area. Meanwhile the latest registered unemployment rate stands at 4.2%, in June. Malta has avoided the two essential sources of the Euro area crisis: the deficit ratio has been moving in the right direction while the banking model followed by the core domestic banks remained prudent. In Malta, the core banks generally rely on traditional, domestic sources of funds, specifically retail deposits. Malta’s banks remained largely unaffected by the euro area crisis, averting the need for any government assistance and avoided what in other countries became a major source of fiscal overruns and distress. Malta must position itself in a way that builds on the strengths of the economy and minimises its vulnerabilities.

The European Systemic Risk Board (ESRB), which is an EU-level body established with a mandate to oversee the macro-prudential oversight of the financial system, recommended the setting up of an authority or body to make recommendations on macro-prudential aspects of the financial system. The Central Bank in its capacity as the macro-prudential authority has agreed with the MFSA, to set up a Joint Financial Stability Board which will be formally constituted in a few weeks. The objective is to enhance the cooperation between the two bodies for the assurance of the stability of the financial system. The intention is to strengthen the resilience of the financial system and to mitigate the build-up of systemic risks. To these ends, the Board’s mandate includes the development of mechanisms that would identify risks to financial stability, and the establishment of the necessary macro-prudential policy tools. The Joint Financial Stability Board will also be able to make recommendations to the CBM or MFSA boards on macro or micro prudential issues, as the case may be. The board is also responsible to follow-up on recommendations made by the ESRB. Second, in the current situation, it must be ensured that fiscal consolidation is not compromised and the commitments under the Fiscal Pact are achieved. The room for fiscal manoeuvre is very limited at this present juncture of contraction in the euro area economy and the current debt-to GDP levels in the Maltese economy. Third, higher productivity allows sustainably higher wages and living standards.
Instead it involves identifying ways to induce and encourage desired behaviors. I would also suggest that it means avoiding departures from normal market functioning whenever possible. Interventions should seek not to override or suspend market functioning, but rather to guide market processes. §  This is not to say that payment suspensions always can and should be avoided, or that ever-larger bailouts are desirable or feasible. I would note that we at the New York Fed in numerous instances, spanning several decades, have worked to help borrowers and creditors find mutually beneficial solutions that involved some degree of concerted or coordinated financing. §  But in such instances, when payment interruptions or resort to concerted financing truly are unavoidable, experience has shown that minimalist approaches - - where only certain payments are suspended or delayed, and only when absolutely necessary - - generally offer the best  BIS Review 61/2002  prospects for minimizing spillover effects and for restoring market access rapidly. G  •  The linchpin of a market-based, minimalist approach has to be a strong policy response on the part of the country in crisis. Markets may not always be reasonable, but they usually have reasons for reacting adversely. Those reasons most often relate to policy or institutional shortcomings.

But we also must keep in mind the implications for the functioning of the global financial system in the near and medium term. This requires consideration of prospects for restoring normal market functioning and access, and the creation of appropriate incentives. •  When difficulties arise, the challenge remains, as always, to encourage and work with countries that are ready and able to implement strong corrective actions and to find financial solutions best suited to both the specific case and the broader functioning of the global financial system. A flexible, case-by-case, managed-market approach, represents the best bet - - and the only realistic option - - for achieving those goals as we face a challenging future. Thank you. BIS Review 61/2002  7
They are more of a speculative investment instrument than a means of payment capable of retaining its value. The chart on the right-hand side of the slide illustrates this. Compared with exchange rates, commodities and equities, cryptocurrencies are subject to very high volatility, and investors must be aware of the financial risks they are taking on when buying them. Cryptocurrencies therefore do not meet the requirements of a currency. However, this does not mean we can simply dismiss them out of hand, for behind all of the hype there is an array of technological innovations. Particularly important among these is the distributed ledger technology, known as DLT for short and often also referred to as blockchain. In other words: it is important to make a clear distinction between cryptocurrencies as assets, and the underlying technology, which does indeed have potential. DLT could facilitate solutions in various areas of the economy that would enhance the safety  Page 2/8  and efficiency of digital information flows. A distributed ledger is essentially a decentralised and synchronised database that allows participants to read, write and save information. DLT makes it possible to unequivocally define ownership structures within a computer network, without the need for a central third party. These facets also give rise to interesting possibilities for the financial sector, and DLT is therefore regarded as one of the biggest innovations in the fintech area.

© Swiss National Bank
It is a European financial centre, and by providing competitive trading facilities in the euro London can help provide better facilities for business and industry across the whole single market and bring more business into Europe from the rest of the world. Opportunities in euro for market participants 29. I have talked so far principally about the steps the authorities are taking to help prepare the London markets for the euro. But of course, at the end of the day, the authorities can only facilitate: the real challenge in seizing the opportunities presented by the single currency has to be met by market participants themselves. Let me touch on three areas where the advent of the euro is likely to usher in significant changes -- but, I believe, positive changes, offering new business opportunities -- for financial market participants. 30. First, in the bond markets, monetary union will serve to unify the various national government bond markets of the EMU participants, and the already substantial ECU bond market, into a single market in a single currency with multiple national government issuers. Currency risk will be removed, at a stroke. This does not, of course, mean that all government bonds of the different national issuers will trade at the same price: differences will still remain in trading structures and liquidity, in perceptions of sovereign risk and the scale of supply by different governments, and in investors’ basic preferences.

At the beginning of 2009, the severe downturn in the global economy had translated into a very serious threat of deflation in Switzerland. For example, the inflation forecasts produced by the IMF showed inflation in Switzerland to be in negative territory for two years in a row. Price stability was evidently not assured. The substantial increase in the value of the Swiss franc since the beginning of financial crisis represented an inappropriate tightening of monetary conditions. Yet, it was imperative that monetary conditions be kept as loose as possible, a fortiori to avoid a further monetary tightening. Given that the interest rate was effectively at a zero level, the SNB decided to prevent any appreciation in the Swiss franc with respect to the euro from March 2009 on. The SNB achieved this goal by repeatedly intervening in the foreign exchange market during the course of 2009. This policy was maintained until the monetary policy assessment (MPA) of December 2009. By the end of 2009, the economic situation was showing some signs of improvement and the threat of deflation was estimated to have diminished. As a consequence, the SNB decided that a certain appreciation in the Swiss franc could be allowed without price stability being compromised. At the December MPA, the SNB therefore announced that it would act  8  There are, however, twice daily margin calls in case of variations in the collateral market value. 9  Source: IMF (2003), “Deflation: Determinants, Risks, and Policy Options”, April 2003.