samchain/econo-pairs-v1 huggingface dataset:
13 As a central bank, MAS enjoys warm and substantive relations with our counterparts in the People’s Bank of China (PBC). We have been in close coordination with PBC over the past year to enable cooperation in the RMB business and related arrangements. 14 PBC has recently appointed the Singapore branch of ICBC as the RMB clearing bank in Singapore earlier this year. ICBC has been working closely with the industry since then to prepare for the offering of their RMB clearing and settlement services. I am delighted to share that ICBC has officially launched RMB clearing services yesterday. Key banks in Singapore are ready to actively participate in this promising new market. 15 MAS also has growing relations with the key sectoral regulators, namely the China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC) and China Insurance Regulatory Commission (CIRC). MAS and CBRC currently hold annual meetings to exchange views on regulatory cooperation and market developments. MAS also plans to step up its engagements with CSRC and CIRC in areas of common interest. 16 These initiatives clearly indicate the increasing importance and connectivity between the financial markets of our two countries. Certainly, we hope for more of such bilateral collaborations as China continues the progressive internationalisation of its financial market and currency. 17 MAS therefore sees great value in establishing a physical presence here to facilitate such future cooperation and regular interactions.

This year, we received 39 studies, ranging from monetary policy and economic and financial development of the country to topics related to aspects of management of production and financial activities, European integration, and technology innovations applied in the fields of virtual money and finance. These works are characterised by the use of contemporary research methodologies and make use of ample statistical information, to research, through theoretical arguments and cause-effect practical relations, various economic phenomena and the rules governing them. Despite the objective difficulties in selecting the most interesting studies, we have eventually come to a decision on the “Governor’s Award for the Best Diploma Theses” for 2019. Having said that, while limited to selecting only three winners, I take this opportunity to congratulate all the participants for their serious commitment and the ideas, methods and conclusions in their laudable research. I would encourage you to continue in your career, after this first step in scientific research, with many more ambitious ones. Let us now present the winning candidates. Thank you and happy holidays! 2/2  BIS central bankers' speeches
The fiscal adjustment drive has been most significant, as shown by the structural primary balance (the cyclically adjusted balance, excluding interest payments), which posted a correction of 1.2 pp of GDP. 2013 was the first full year of application of the mechanisms of the Budgetary Stability and Financial Sustainability Law approved in 2012. Moreover, measures were taken to improve the sustainability of public pensions (the sustainability factor and revaluation index). Private-sector deleveraging and bank lending To conclude this section, I will refer to the correction of private-sector overindebtedness. The Spanish economy’s cyclical position suggests, along with past experience, that several quarters of economic growth will still be necessary before lending at the aggregate level resumes positive growth rates. However, there were actually signs of an improvement in this connection in 2013. Since mid-year, lending to companies has been shrinking at increasingly lower rates, a change which has begun to be discernible also in the case of households since early 2014. The more disaggregated analyses conducted by the Banco de España support the idea that the contraction in debt at the aggregate level is proving compatible with a shift in the mix of  BIS central bankers’ speeches  3  debt towards those companies in a sound position which are, therefore, better placed to channel funds to new investments that translate into more growth and more employment. Spanish banking sector I will now refer to the position of and outlook for our banking sector.

In particular, in 2011 the retirement age and the period for calculating the regulatory base were increased, and in 2013 the so-called “sustainability” factor was defined and the revaluation index of pensions was introduced. These measures will help to ease the pressure in the medium term arising from population ageing. The next step should be to develop the mechanisms to increase saving for retirement so that in the future this may complement defined-benefit public pensions. Turning to public revenue, according to the findings of the Committee of Experts – which delivered its report in March 2014 – and the recommendations of international agencies, a reform is needed to redress the problems which have become visible during the crisis. These problems include most notably the low revenue-raising capacity of the tax system, the high legal rates of taxation alongside low effective rates of taxation due to the proliferation of tax benefits, and a bias towards a more distortional system of taxation for economic growth and employment, namely, that levied on labour and capital. Given this diagnosis, the proposals of the Committee of Experts and international agencies coincide as to the need to increase the weight of indirect taxation to permit a reduction in the taxation of labour, particularly social security contributions, and also a lowering of the taxation of capital income. Additionally, the Committee suggests that tax rebates, reductions  6  BIS central bankers’ speeches  and allowances be eliminated and that progress be made towards greater neutrality across savings instruments.
6 It potentially offers a useful way of improving knowledge of key system-wide interactions, and thus could provide a valuable supplement both to improved “top-down” approaches and to “bottom-up” stress tests which are naturally targeted more closely at the major risks facing individual firms given their balance sheets and positions. 16 To conclude, there is a major programme of inherently difficult and challenging modelling work ahead for the public authorities and for financial firms. But this is very important. Development of a more coherent and consistent framework for the analysis of financial stability is a major prize. Ultimately this should improve the understanding and pricing of risk and support better targeting of public policy, focused more closely on containing systemic risk and on the maintenance of the public good of systemic financial stability. 6  De Nederlandsche Bank (2006), Financial Stability: is the Dutch financial sector stress-resistant? Quarterly Bulletin, December. 8  BIS Review 81/2007

Of course, such integration has to be brought to fruition in the other segments of the money market, i.e. the repo market and the short-term securities market. Further integration will enhance the efficiency of the euro area financial markets and will be beneficial to borrowers and investors alike. With regard to the capital markets, progress towards integration has been significant, both on the euro-denominated bond market and the equity market. The gross issuance of long-term debt securities denominated in euro amounted to 791 billion euro in 1999, against the equivalent of 902 billion euro for debt securities denominated in US dollars. The pace of euro-denominated issues remained brisk in the first three quarters of 2000 at 498 billion euros. According to the Bank for International Settlements, euro-area private sector borrowers have issued 76% of their debt in euros since 1 January 1999, compared with an average of 50% in the predecessor currencies since during the 1990s. Similarly, private borrowers resident outside the euro area issued more than a fifth of their international debt in euros from the beginning of 1999, roughly a twofold increase over the total share of the legacy currencies before the introduction of the euro. Furthermore, European investors have substantially diversified their bond portfolios since the introduction of the euro, encouraged by the removal of the exchange rate risk. This enables them to achieve higher rates of return for a given level of portfolio risk.
There is widespread incertitude regarding the potential effects of such a shock on financial markets, since the resilience of the new financial securities and intermediaries to this type of shocks is yet to be tested. ; (4) deeper distortions and tensions created by severe global imbalances, which might result in an increase of protectionism and a disorderly correction of international parities to sudden changes in capital flows financing those imbalances, affecting financial markets and asset prices; and (5) the ever present geopolitical perils. The Chilean economy The Chilean economy has reaped the benefits of the dynamic world economy through a very significant terms-of-trade improvement that accumulates 70% since 2002, and through a strengthening of markets for our exports. Part of the better terms of trade goes to foreign owners of mining projects in the form of profits and dividends, but a substantial fraction stays in Chile in the form of greater profits and dividends paid to companies owned by nationals (including the State as the owner of the copper corporation CODELCO), increased tax collection and better salaries and bonuses to workers producing the commodities. The expansionary effects of this gain in terms of trade become larger as it is believed to be more permanent. The favorable external conditions, the stronger fiscal impulse – associated to the more permanent portion of the copper price increase – and the good financial conditions are behind this solid expansion, leaving behind the unexpected deceleration experienced by the Chilean economy in the third quarter of last year.

In connection with the expansionary cycle of the world economy, and also with the depreciated dollar, prices of copper, oil and derivatives – especially gasoline – are picking up again. The rise in commodities’ prices has now spread to foods. For the year 2008, projections from Consensus Forecast foresee global growth similar to that of 2007 but with a rebound in the U.S. and a slight deceleration in the euro zone and in emerging economies, influenced by the process of monetary normalization implemented to keep inflation under control. Such a favorable global scenario may continue longer, but it can also deteriorate if a number of latent risks materialize. The most important ones facing the world economy are: (1) a deeper deceleration in the U.S. as a result of a stronger adjustment in the housing sector that ends up shocking the rest of the economy and the world; (2) an acceleration of inflation because of supply-side shocks in a global economy with little output gaps, which generates a  2  BIS Review 87/2007  sudden and large increase in the monetary policy rates of industrial economies, especially the U.S. and the euro zone; (3) an unforeseen sharp increase in risk premiums and a liquidity shortage affecting asset prices and world activity as a result of an unexpected increase in inflation in the developed world or a shock in financial markets, at a time when risk premiums are in unusually low levels.
The challenge for the MPC is to assess when inflationary pressures will be building and thus when we need to start withdrawing stimulus, so that once we have eliminated slack in the economy, monetary policy is consistent with stable, sustainable growth and hence stable inflation around the target (subject of course to the other forces acting on the economy at the time). That’s an extremely optimistic expectation of what policy can achieve, so let me put it slightly differently. The realistic challenge for the MPC is to avoid a big mistake either by choking off the recovery too soon, leaving the economy in a quagmire, or by allowing inflationary pressures to build excessively, requiring a sharp tightening in interest rates (and the potential for another recession) to bring inflation back under control. Forward guidance is a policy framework designed, amongst other things, to help avoid big mistakes. We can encourage and probe growth in the economy by committing not to tighten policy until the economy has used up more of its spare capacity. On one view the policy is simple – we must give the economy plenty of time to establish the recovery before we start to raise interest rates or unwind asset purchases. At another level, some critical judgements are  BIS central bankers’ speeches  3  going to be needed because the timing is inevitably uncertain. Given those uncertainties, forward guidance delivers a framework within which the MPC can explore the scope for economic expansion without putting price and financial stability at risk.

However, all of these problems are partly related to the good access to venture capital that has been created by high saving in some parts of the world. Credit granting has slowed down in a number of countries and the financial crisis has contributed to the recession in the world economy The problems in the housing market and the financial crisis that arose have led to credit terms being tightened in some of the world’s larger economies. The difficulties in obtaining loans have contributed to a number of companies experiencing difficulty in financing their investment, and have subdued household consumption. Falling stock market prices and house prices have contributed to household wealth declining rapidly in many countries. This also slows down consumption and investment. The financial crisis has contributed to GDP in the world as a whole declining this year and to unemployment rising in most countries. The Riksbank’s assessment is that the recession in the global economy in 2008-2009 will be the worst since the post-war period. 2  BIS Review 56/2009  Extensive economic policy measures have been taken In contrast to the way that economic policy was conducted at the end of the 1920s and the beginning of the 1930s, the authorities have on this occasion acted quickly and forcefully. Central banks have acted quickly In the United States the policy rate has been cut from 5.25 per cent in autumn 2007 to 0.25 per cent.
I am convinced that, just as the need for fiscal consolidation or pension reform was ultimately recognised, so too will the unavoidable need to change our legal and institutional framework in such a way as to allow entrepreneurs to increase the supply of jobs and workers to decide whether to take them. In the past 50 years, Spain has made numerous reforms across its economic structure. Tariffs have been lifted and companies privatised, and competition has been fomented in many industries. Yet the institutional framework for employment has remained practically and essentially unchanged since the onset of democracy. Meanwhile, in recent decades, other economies, most notably the Nordic countries, have introduced so-called flexicurity, i.e. they have introduced the flexibility needed to reduce the unemployment rate and to increase wages where productivity is growing most, and they have at the same time maintained and even strengthened the social protection which is a hallmark of our European model of society. Finally, the measures I have mentioned are not the only ones that should be adopted. The reform agenda is an extensive one. For instance, it is essential to reduce administrative burdens, to simplify and coordinate economic regulation, and to alter oligopolistic structures, as was recently recommended by the Competition Board for the case of oil products. We could draw up a very extensive list of measures, but you will understand – and I hope appreciate – that, with limited time at my disposal, I have confined myself to what I consider most important and pressing.

However, the Taylor Rule is a rule-of-thumb, whose claims of empirical validity are based on its ability to track policy during periods of relatively modest volatility.2 The current recession is outside of the empirical experience of Taylor Rules calibrated to describe Federal Reserve actions. We need to look beyond heuristic descriptions like the Taylor Rule to a more complete analysis of optimal monetary policymaking within a dual mandate framework. This topic has been studied extensively in the macroeconomic literature. Interestingly, one of the first  1  The Committee’s interpretation of its mandate often is expressed as inflation of “2 percent, or a bit less.” This does not mean keeping inflation in a narrow band capped by 2%. The “2 percent, or a bit less” interpretation of our price stability mandate comes from the responses to the Survey of Economic Projections which FOMC participants submit four times per year, and in which the majority of participants have said 2% is their long-run forecast under conditions that include appropriate monetary policy. Because inflation is determined in the long run by monetary policy, it follows that these long-run forecasts can be interpreted as participants’ views on the level of inflation most consistent with the Committee’s mandate. The “or a bit less” is added because a minority of participants submit long-run forecasts that are below 2%. 2  The exercise is described in Taylor, John B. 1993. “Discretion Versus Policy Rules in Practice,” CarnegieRochester Series on Public Policy 39, pp. 195–214; and Taylor, John B. 1999.
The rise in prices for domestically produced goods and services slowed somewhat towards the end of 2005 and into 2006. The 12-month rise in prices for these products is estimated at 1.6 per cent in April, adjusted for the effects of lower maximum day-care rates. However, several factors point towards rising inflation. Capacity utilisation in the Norwegian economy is increasing, and tighter labour market conditions may result in higher wage growth in the coming years. The rise in oil prices is resulting in higher input costs for producers. As a rule, monetary policy shall not take account of the direct effects on consumer prices resulting from changes in the interest rate level, taxes, excise duties and extraordinary, temporary disturbances. However, there is no certain method for distinguishing extraordinary, temporary disturbances from more long-lasting price changes. The inflation measure CPI-ATE excludes the effects of changes in taxes and energy prices. Norges Bank has given weight to this indicator of underlying inflationary pressures in the economy, but also keeps an eye on other indicators. The 12-month rise in the CPIATE adjusted for the effects of lower maximum day-care rates is estimated at 1.0 per cent in April. BIS Review 41/2006  3  However, the CPI-ATE not only strips out temporary effects of changes in tax changes and fluctuations in energy prices, but also trend changes in these variables. Thus, this indicator is not a perfect measure of underlying inflation.

The manner in which the MPC optimises these trade-offs can be represented in “linear-quadratic” form – a set of linear constraints describing the behaviour of the economy, and quadratic preferences that penalise deviations of inflation from its target and output from its potential. The relative weight the policymaker places on output stabilisation, relative to inflation stabilisation, is often denoted 𝜆 – or ‘lambda’. The policymaker’s objective function can be described as the following “loss function”: 𝐻 ∗ )2 ]} min ℒ𝑡 ≡ 𝐸𝑡 {∑ 𝛽 𝑖 [(𝜋𝑡+𝑖 − 𝜋 ∗ )2 + λ(𝑦𝑡+𝑖 − 𝑦𝑡+𝑖  {𝑟𝑡+𝑖 }𝑇 𝑖=0  𝑖=𝑜  where 𝜋𝑡 is inflation, 𝜋 ∗ is the inflation target, 𝑦𝑡 is output and 𝑦𝑡∗ is ‘trend’ output, so that 𝑦𝑡 − 𝑦𝑡∗ is the output gap, 𝑟𝑡 is the nominal interest rate – the policy instrument, 𝛽 is the discount factor and 𝑡 subscripts denote time periods. 𝐻 is 3-5 years after which the monetary policy transmission mechanism fades. The policymaker’s objective is to minimise the discounted sum of losses over time. In this formulation, a lambda of zero would imply no weight on the stabilisation of real activity – so-called “inflation nutter” preferences. When lambda is positive, the policymaker is willing to strike some trade-off between output and inflation stabilisation, as directed by the MPC remit. This objective function is optimised subject to the constraints implied by the aggregate behaviour of the economy, including the relationship between interest rates and activity; and the relationship between activity and inflation – the Phillips curve.
It is still uncertain whether inflation will increase rapidly or whether it will only gradually near the target of 2½ per cent. Unemployment has fallen sharply in the past few quarters. The rate of decline and level of unemployment are reminiscent of two previous cyclical peaks, the one in the mid-1980s and the other that started in the late-1990s and continued into this decade. Both expansions culminated in a sharp rise in wage and cost inflation. While a high level of net inward migration has increased the supply of labour, there have also been large flows out of the labour market into various benefit schemes. Sickness absence is at a high level and a rising share of the working-age population is on disability benefit or rehabilitation schemes. Many choose to retire under contractual early retirement schemes at the age of 62, and these numbers will probably increase in the coming years. In Norway, close to 600 000 persons among the working-age population are on benefit and retirement schemes. This accounts for 25 per cent of the labour force. 8  BIS Review 47/2007  It may seem that household saving has fallen markedly in Norway in recent periods. Saving was negative in the latter half of 2006, and probably during the first quarter of 2007, for the first time since the mid-1980s. Housing investment in the household sector as a whole is thereby fully debt-financed. A favourable economic climate and government surpluses may have created a sense of security that is influencing household saving.

Svein Gjedrem: The conduct of monetary policy Introductory statement by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 10 May 2007. Please note that the text below may differ slightly from the actual presentation. The statement is based on Norges Bank’s Annual Report for 2006, Monetary Policy Report 1/2007 and the Executive Board’s assessments in the period to the monetary policy meeting on 25 April. *  *  *  I would like to thank the Chairman of the Committee and thank you for this opportunity to report and answer questions on monetary policy in connection with the Storting’s deliberations on the Government’s Credit Report. The account is based on the Bank’s Annual Report, but is also updated based on the Executive Board’s assessments in the period to the previous monetary policy meeting. We also consider the report from Norges Bank Watch. In recent years, the Norwegian economy has been influenced by a number of positive supply-side conditions, which have curbed inflation, increased the growth potential of the economy and boosted production. At the hearing in 2006, I indicated that inflation would pick up. Rising capacity utilisation and a tighter labour market were expected to lead to higher wage growth. There were prospects of a gradual increase in the key policy rate to a more normal level.