samchain/econo-pairs-v1 huggingface dataset:
In a world where attention to our analysis is limited, it may be preferable to keep our ‘audience’ focused on the MPC’s analysis of the outlook for output and inflation. Sometimes that analysis lends itself naturally to a contingent statement, by individual members, of a possible path for policy. I have already referred to one such example around the end of 2003/beginning of 2004. In a similar vein, circumstances may arise where we explained the broad path for inflation we were trying to deliver. For example, a shock to the economy might be sufficiently nasty that returning inflation to target on the usual timetable would threaten undesirable volatility in output. We might then want to set policy in a way that accepted deviations from the inflation target for a period, while committing to achieve the target in the medium run. Related to that, our mandate makes specific provision for communication if inflation outturns were to miss our target of 2% by more than one percentage point. In those circumstances, the Governor of the Bank would be obliged, as part of the Committee’s public accountability, to write an open letter to the Chancellor of the Exchequer explaining why inflation had deviated from target, the Committee’s plan for returning to target, and its time horizon for doing so. Such circumstances have not yet arisen, but they illustrate that provision is made for theCommittee to explain what commentators would call its strategy.

Putting these two features of the objective function together, the policymaker places some weight on the prospect of unusual volatility in inflation down the road. This is not just hypothetical. In 2002-03, some of us on the MPC voted to maintain an unchanged policy rate rather than cut partly on the grounds that, by stoking the embers under household debt and house prices, too great a risk would be taken with future output and, most important, inflation variability 28 . Speaking for myself, that was directed at avoiding policy settings that, on balance, could have increased uncertainty about demand conditions and inflation in the future, and complicated the operation of policy down the road, not on some spurious aspiration of steering asset prices along some (unknowable) equilibrium path. Maybe that would be one way, consistent with focussing on a single objective, to construe the thoughtprovoking papers that have come out of the Bank for International Settlements in recent years 29 . Certainly this is an area where policymakers still have lots to learn. 27  28  See Cecchetti, S., H. Genberg and S. Wadhwani, 2002, ‘Asset prices in a flexible inflation targeting framework, NBER Working Paper 8970.
Who better to deliver this year’s MAS Lecture than the chief architect and prime mover behind that far-sighted policy: Dr Zhou Xiaochuan Dr Zhou needs little introduction. We secured his agreement to deliver the MAS Lecture just three weeks ago. The letters of invitation went out two weeks. The fact that more than 500 of you are gathered here at short notice is testament to Dr Zhou’s reputation as a visionary leader who shaped China’s financial reform agenda. Still, it would be remiss of me if I did not briefly highlight the key milestones in Dr Zhou’s distinguished career in public service spanning more than 30 years. He held leadership roles in the Bank of China and the China Construction Bank. He served as Administrator of the State Administration of Foreign Exchange (SAFE) and Chairman of the China Securities Regulatory Commission (CSRC). And of course – what he is most well known for – he served as Governor of the People’s Bank of China (PBoC) from 2002 to 2018, the longest-serving Governor of 1/2  BIS central bankers' speeches  the PBoC. Dr Zhou became one of the most respected central bankers on the international circuit. In February this year, Dr Zhou was awarded the Lifetime Central Banking Award by London-based publication Central Banking, a most fitting recognition of his contributions to the Chinese economy and financial sector. From a bilateral perspective, during Dr Zhou’s tenure, the PBoC and MAS forged close ties and deepened financial and regulatory cooperation.

But not many of us know that that when it comes to technology, Dr Zhou was ahead of the curve amongst his peers. In 2014, before the words “fintech” and “digital currencies” became popular, Dr Zhou set up a Digital Currency Research Institute within the PBoC to explore how new technologies like the blockchain and digital tokens could improve and strengthen China’s financial system. Today, China is a leading fintech player and there is even speculation that PBoC may become the first central bank in the world to issue its own digital currency – a topic that Dr Zhou will probably touch on, and if he does not, one of you I am sure will ask him about! And now, ladies and gentlemen, please join me in welcoming Dr Zhou Xiaochuan to deliver the tenth MAS Lecture. 2/2  BIS central bankers' speeches
In the case of the Eurosystem, this is an even more arduous task than usual, as the single monetary policy must cope with a new environment and be explained to a public from different cultural backgrounds on the basis of new indicators and data. Our choice is to base this communication on transparency. This means that our external presentation of monetary policy must fully reflect the internal analysis and discussions which take place within the Governing Council. I can personally assure you that this is the case. Our internal discussions are organised in such a way as to ensure a full and thorough assessment of the two pillars I have just described. Our external communications fully reflect this. In addition to a well-defined and informed strategy, the monetary policy of the Eurosystem must rely on an efficient operational framework, that is, on a set of instruments and procedures necessary for the implementation of monetary policy. Thus far, this framework has proved successful in clearly signalling the stance of monetary policy, in steering short-term market interest rates and in providing liquidity to the banking system in an efficient manner. At the heart of the framework are the weekly refinancing operations which were conducted at interest rates broadly in the middle of the interest rate corridor, which is set by the rates on the two standing facilities. A minimum reserve system ensures the existence of a liquidity deficit in the banking system, which is necessary for the conduct of these weekly open market operations.

In this regard, the risks to price stability remained persistently, up until our recent decision on interest rates, on the upside. According to the forecasts currently available, consumer price inflation in 2000 and 2001 is generally projected to be slightly below 2%. This is clearly higher than was expected in the respective forecasts at the end of last year and early this year. We should, of course, bear in mind that these forecasts are snapshots of economic prospects as they appear at a particular point in time. They are typically surrounded by a fair degree of uncertainty and they are highly conditional on a number of specific assumptions. Oil prices and exchange rates are prominent examples of such forecast assumptions. The movements in these variables in the past few months show how quickly such assumptions can move out of line with actual developments. Moreover, in the case of the forecasts currently available, some of these explicitly assume that short-term interest rates will rise over the forecast period. I think that it is fair to say that without this assumption projected inflation would most likely have been higher in the forecasts concerned. Thus, the inflation outlook for the euro area gave a very clear signal to monetary policy: namely that there was no reason for complacency and that monetary policy had to react. The developments in oil prices and the exchange rate have led to a strong rise in import prices.
Dear Guests, In my speech, after a brief review of the global policy response to the pandemic, I will give information about the measures taken in Turkey and the pandemic-era outlook for the country. The period of normalization, which I will talk about later, is marked by the inflation outlook. In this period, central banks have undertaken the difficult task of controlling inflation without harming economic recovery after having suffered severe costs in terms of growth and employment. In the last part of my speech, I will touch on the risks that remain due to the latest state and course of the pandemic. The rapid spread of the coronavirus around the world caused a significant slowdown in global trade and economic activity. Due to lockdown measures, unlike the 2008 crisis, we saw a more devastating supply shock, and thus, it is safe to say that COVID-19 has been economically more costly. The rapid global spread of COVID-19 affected economies through various channels, causing a sharp contraction in global economic activity. The pandemic first hit the global supply chain and production. Then, mounting uncertainties,  3  tighter financial conditions, household income losses and worsened cash flows of businesses caused demand to weaken substantially. Lockdown measures around the world caused services activity to decline rapidly in March 2020. In the following period, the slowdown also spread to the manufacturing industry as global trade contracted. Both advanced and emerging economies saw a negative decoupling of the services sector due to pandemic measures.

New forecasts have not been prepared for this monetary policy meeting, but we have assessed new information against the forecasts we presented in March. Chart 3: International inflation has slowed Inflation among trading partners is also high but has eased in many countries in recent months. Gas and power prices have come down from the very high levels seen last year. Problems at some US and Swiss banks led to large movements in financial markets in March. Global equity indexes have risen since the March Report, and bond risk premiums have fallen. US and European households and firms appear to be finding it more difficult to obtain loans. Chart 4: The krone has depreciated High inflation has prompted central banks in many countries to raise policy rates quickly and more than in Norway. The Norwegian krone has depreciated in recent months and  1/2  BIS - Central bankers' speeches  is now at its weakest level since the onset of the pandemic in spring 2020. The krone is weaker than we projected in March. Activity in the Norwegian economy is high. Household consumption has continued to increase despite high inflation and higher interest rates. The employment rate is high and employment has risen further so far this year. The labour market is tight. Economic growth has nevertheless slowed recently. Unemployment moved a little higher in April, and the number of job postings has declined. Chart 5: Wage growth has risen The tight labour market has led to a pick-up in wage growth.
Recently, when Switzerland signed bilateral treaties with the United Kingdom and Germany on tax-related matters, MAS issued a set of guidelines as a pre-emptive step to guard against any potential inflows of illicit funds. The guidelines remind financial institutions that they have a key role to play in preserving the integrity of our financial system, and safeguarding it from being used as a haven for illegitimate funds or as a conduit to disguise the flow of such funds. This vigilance should be extended to all forms of suspicious flows, be they from tax evasion or corruption. 3  6  Boston Consulting Group’s Global Wealth Report 2011. BIS central bankers’ speeches  Don’t get me wrong. Legitimate funds from Europe, or anywhere else, seeking to be managed out of Singapore for the stability and infrastructure we provide, the depth of our markets, the quality of our service, and the conducive ecosystem that has taken root here, are most welcome. But not illicit funds seeking shelter from scrutiny. Working with industry In our efforts to uphold Singapore as a competent, trusted, and clean wealth management centre, MAS will abide by a key guiding principle – to work hand in hand with industry players like you. We want to leverage off your knowledge and perspectives on the ground, to ensure that initiatives translate to meaningful regulations. The industry has to take charge of the issues, actively debate them, and advocate solutions. The Private Banking Code of Conduct introduced earlier this year, is an excellent example of this.

We are likely to meet the numerical values of the Maastricht criteria by the end of 2009 and Estonia expects to join the euro area in 2011, in full accordance with the Treaty provisions. It is clear that in order to adopt the euro, the key issue of Estonia's fiscal policy is ensuring sustainable public finances in the next years. Looking at longer-term growth potential, it would be advisable not to achieve this by excessive increases in the tax burden. BIS Review 90/2009  1  Finally, the way out from the current crisis depends critically on further strengthening of the EU Single Market for goods, services and production factors (including capital, labour and know-how). To conclude I would like to assure that Eesti Pank is always open for your inquires and cooperation. Thank you for your attention! 2  BIS Review 90/2009
It is a topical issue, also relevant to Romania, because the reshaping of the relations among major global currencies – including on the background of the ECB’s recent quantitative easing – complicates the task of identifying the equilibrium exchange rate of the leu suitable for ERM II entry and thereafter for euro adoption. Technically, the adoption of the single currency as of 1 January 2019 would imply joining ERM II in 2016 H1 and the minimum two-year stay. Aside from the difficulty of setting the central parity, ERM II participation calls, however, for a certain preparedness of the economy as well, considering the risks inherently posed by a target-band regime. The need to minimise such risks and the requirement to fulfil the Maastricht criteria by the end of the second year of ERM II participation render all the more important the completion of major economic policy adjustments ahead of adopting this exchange rate regime. I am mainly referring to removing the sources of repressed inflation (the relevant example being the completion of the energy market deregulation), of quasi-fiscal deficits (by restructuring lossmaking state-owned enterprises), as well as other sources of future budgetary pressure (for instance, the unavoidable expenditures to modernise road infrastructure). There are also monetary adjustments that need to be carried out ahead of ERM II entry, namely finalising the process of bringing minimum reserve requirement ratios in line with euro area levels.

I remember  BIS central bankers’ speeches  3  the speech our distinguished guest delivered at the end of his ECB tenure and the fact that the closing remarks showed not only a good sense of humour, but also a subtle comprehension of the manner in which physical distances and especially distances in time alter the assessment of individuals and, if I may add, of events. Please allow me to read the final part of the aforementioned speech, which presents the timeline of the news published by Le Moniteur concerning the return of Napoleon from his exile on Elba Island: 10 March – “The Corsican ogre has landed at Cape Juan”; 11 March – “The tiger is in Gap. Troops are on their way and will stop him. He will end his miserable adventure as a homeless refugee in the mountains”; 12 March – “The monster succeeded in proceeding to Grenoble”; 13 March – “The tyrant is now in Lyon. Horror has caught the people”; 18 March – “The usurper is some days’ march distant from Paris”; 19 March – “Bonaparte approaches in a hurry, but he will not succeed in advancing to Paris”; 20 March – “Napoleon will be in Paris tomorrow”; 21 March – “Emperor Napoleon is in Fontainebleau”; 22 March – “Yesterday evening His Majesty celebrated his arrival in Paris. The jubilation cannot be described”.
The Triumph (and Tragedy) of Monetary Policy  Newton famously and humbly observed, “If I have seen farther, it is by standing on the shoulders of Giants.” So too it is with macroprudential policy, a framework that owes a great debt to insights and initiatives of my predecessor, Lord King. The UK’s macroprudential policy framework today stands on the shoulder of the UK’s monetary policy framework first set up in 1998. In the UK, from 1971 to 1992, inflation was high - averaging 9%, and volatile, with a standard deviation of 5.4%. This distorted price signals, inhibited investment, damaged the productive potential of the economy, and hurt those least well-off. It contributed to high and volatile unemployment, which averaged 7.8% with a standard deviation of 2.8%. Although the value of low and stable inflation was widely recognised, delivering it proved challenging. This was because the instrument that affects inflation most powerfully – monetary policy – also affects output and employment, at least in the short run. This tempted authorities, influenced by governments, to promise low inflation in the future, but then to renege in order to boost activity. Electoral cycles reinforced this predisposition. Firms and households began to anticipate these incentives, and eventually pre-empt them. This time inconsistency was resolved by first having society choose the preferred rate of inflation, and then delegating operational responsibility to the monetary authority to take the necessary monetary actions to achieve that objective. By “tying the hands” of authorities, better outcomes for both inflation and unemployment became possible.

In contrast, the US and the euro area have generally faced Divine Coincidence since the global financial crisis (Charts 9 and 10)  16  All speeches are available online at www.bankofengland.co.uk/news/speeches  16  Chart 8: Divine Coincidence in the UK pre-crisis, but rarely post-crisis  6  Inflation (%)  4  2 -5 -4 Output gap (%)  -3  -2  -1  0  1  2  0  Pre-financial crisis Financial crisis and after  -2  Charts 9 and 10: Divine Coincidence generally held in the US (left chart) and euro area (right chart) 5  Inflation (%)  4.5  4  4  3  3.5 3  2 -8  -6  -4  -2  1 0  Pre-financial crisis Financial crisis and after  Inflation (%)  0  2  2.5  4  Output gap  2 -4.00  -2.00  1.5  -1  1  -2  0.5  -3  0  -4  -0.5  -5  -1  0.00  2.00  4.00 Output gap  Pre-financial crisis Financial crisis and after  Source for Charts 8-10: Bureau of Economic Analysis, CBO, Eurostat, IMF and Bank calculations. 17  All speeches are available online at www.bankofengland.co.uk/news/speeches  17  3. Time horizon Although both committees must promote the government’s economic objectives subject to achievement of their primary objectives, the MPC has very limited ability to influence trend growth. Monetary policy transmission impacts fade after 3-5 years.
Equally, he reports back to the Chancellor on the monetary policy decisions of the MPC. This clear, open and systematic line of communication works, if anything, better than the old practice where the markets would speculate on whether the government might “reward itself” by an interest rate cut if the Budget was well received. But there is a further weakness in the proposition that monetary and fiscal policy are in some sense alternative instruments for influencing movements in aggregate demand over the cycle. There is a natural monthly cycle to monetary policy. Many of the relevant economic statistics are available monthly. But the natural cycle for fiscal policy is annual rather than monthly. It is costly to change taxes and government spending frequently. Changes in tax rates can distort the choices of the private sector and lead to a misallocation of resources. To raise and lower public spending at short notice can disrupt the provision of public services. And there are inevitable legislative and administrative lags in implementing quickly changes in tax rates and government spending. Tax rates and public expenditure should reflect long-run priorities of the elected government, and are not well suited to frequent changes. Since the MPC first met in June 1997, it has raised interest rates on six occasions, lowered them on seven occasions and left them unchanged sixteen times. It would make no sense for a government to try to change tax rates with that frequency.

Figure 10 Growth forecasts (annual change, percent)  3.2  3.2  United States  2.9  2.9  2.6  2.6  2.3  2.3  2.0  2.0  1.7  1.7  1.4  2.6  1.4 15  16  6.8  17  18  2.6  Eurozone  2.3  2.3  2.0  2.0  1.7  1.7  1.4  19  1.4 15  16  17  18  19  6.8  4.2  6.6  6.6  4.0  4.0  6.4  6.4  3.8  3.8  6.2  6.2  3.6  3.6  6.0  6.0  3.4  3.4  5.8  3.2  3.2  China  5.8  15  16  17  18  19  15  Source: IMF. 13  4.2  World at PPP  16  17  18  19  Figure 11 Terms of trade (index, 2013=100)  110  110 Dec.18 Report  105  105  100  100 Mar.19 Report  95  95  90  90  85  85 13  14  15  16  17  18  19  20  21  Source: Central Bank of Chile.
The relationship between economic activity and inflation is not particularly stable either. In the difficult deliberations we had to make in September we Executive Board members reached different conclusions, with a majority voting to raise the repo rate while the minority to which I myself belonged voted to hold the interest rate unchanged. On this occasion I shall not go into the various reasons for my stance in depth; they were clear from the separate minutes of the monetary policy meeting and I discussed them in a speech I held a couple of weeks ago. 6  BIS Review 121/2008

Despite their cost magnitude, we persist  BIS central bankers’ speeches  1  with these investments because we believe that once properly leveraged they will enable the organisation to do more with less by: (i) increasing staff efficiency and productivity; (ii) strengthening relationships with the organisation’s customers; and (iii) fostering more effective collaboration with various business partners to quicken the speed at which data that is required for decision-making can be provided. In striving to achieve these goals, we are exposed to the likelihood of being affected by the major risks that are attendant with information technology use. Consequently, the institution continues to allocate resources to: (a) make its information systems and the supporting technical infrastructure more reliable and resilient; and (b) protect the integrity of the institution’s data assets. Achievement of the foregoing objectives is heavily dependent on all information technologyrelated activities and investments being channelled in a manner that is consistent with the organisation’s goals and needs – the so called IT/business alignment challenge that appears to be so elusive in many cases. Here, from a management oversight perspective, one cannot overemphasise the necessity of embracing governance mechanisms that are fit for purpose. To remain relevant, the information technology function must continually evaluate and if necessary enhance its existing capability to ensure that it can meet the requirements of core business processes while being in tune with the current and envisaged directions of the organisation.