samchain/econo-pairs-v1 huggingface dataset:
Let us remember that, for example, in Bulgaria the inflation rate had topped 1,000 percent and the economy was in shambles. The introduction of the currency board was the solution which, at unavoidable social costs, brought the Bulgarian economy afloat, with inflation falling steeply and staying close to EU levels for a good couple of years. But the currency board has its limits and constraints. The BNR has constantly opposed the adoption of such a system by Romania given these limits and constraints. Actually, a country adopting the currency board is deprived of monetary policy and thus the central bank becomes a sort of an institute for statistics. Instead of a two-pedal vehicle – monetary and fiscal policies – the economy of currency board countries has only one pedal left, namely the fiscal policy. Assuming the risk of an extended comment, let us look at what happened in the four countries and what happened in Romania in the past few years in a rather unusual international context, with the euro appreciating simultaneously with the increases in farming products and energy prices. The appreciation of the euro triggered a slide of output competitiveness in the countries having their exchange rate pegged to the euro and the rises in global prices boosted domestic inflation. Currency board countries could change neither the exchange rate, nor the interest rates which are linked to euro area levels, currently standing at 4.25 percent a year.

However, there are numerous opinions according to which rating agencies could downgrade Romania. Which would be the main risk factors that could lead to a downgrade? So far, rating agencies have only changed the outlook, not the rating. To answer your question – although I do not believe that Romania will be downgraded to below "investment grade" – the main risk factor remains the current account deficit. We have implemented tight monetary policies to tackle this issue. I believe that at the end of this year we will see a containment of this indicator to its 2007 figure of 14 percent of GDP as compared to some analysts' expectations of 15-16 percent. This is a positive thing for a start but we should not stop here. Romania needs policies that would allow a gradual and predictable reduction of the current account deficit to levels almost entirely covered by direct capital investments to regain confidence of the rating agencies and ensure an improvement of external creditworthiness. We will be thus forced to implement a gradual correction of this deficit, even by a few percentage points in the next two to three years, and it is desirable that this happens in the context of sustainable economic growth, close to the potential, while consolidating disinflation which will resume this autumn after a few quarters of considerable efforts.
Meanwhile, the weakness of advanced economies leads us to believe that they will hold on to their low monetary policy rates for a very long time. These low real interest rates help boost domestic demand in surplus economies with sound financial systems, like ours. The consequence is a global reaccommodation of the currencies: deficit countries depreciate their real exchange rates, while the rest of the world appreciate theirs. Within this context, the currencies of most emerging and/or commodity exporting economies are facing pressures for a real appreciation. The Chilean peso is part of this process of global parity re-accommodation. Our currency has appreciated significantly with respect to that of deficit-ridden economies: the US, the UK and, to a lesser extent, the Eurozone. However, it remains stable or has depreciated with respect to the currencies of other emerging or commodity exporting economies (figure 2). One problem is that not every country is contributing to the foreign exchange adjustment at the same pace. Such a disparity creates tensions in the world economy. In the Eurozone, the rigidity imposed by the single currency slows down the real exchange rate adjustment between economies that are going through very different stages in the cycle. In China, high savings and foreign exchange market interventions hinder the adjustment. This can amplify the effects on other currencies in emerging and commodity exporting economies. However, underlying pressures continue to manifest themselves in other ways. In the deficit economies of the Eurozone, the recession and its accompanying deflationary pressures depreciate the real exchange rate.

exporters  -15  -9,9  -2,4  0  -0,9  U.K.  10  25 20  16,8  GDP growh in 2011-2015: 6.7%  U.S.  15  Eurozone  20  22,1  (*) Regional aggregates reflect simple averages. Sources: BIS and IMF. 7  Figure 3 Terms of trade (index, 2000=100) 200  200  180  180  160  160  140  140  120  120  100  100  80  80  60  60  40  40  80  85  90  95  00  05  10(f)  (f) Forecast. Source: Central Bank of Chile. Figure 4 Net international investment position (percentage of GDP) (1) 100  100  75  75  50  50  25  25  0  0  -25  -25  -50  -50  -75  -75  -100  -100 97  01  05  Institutional Banks Companies and households (1) GDP at constant exchange rate (index, September 2010 =100). (2) Net international investment position. Source: Central Bank of Chile.
Second, the longer we keep inflation expectations at target, maintain a current account surplus, and continue to pay down debt, the more the risk premium component of interest rates and the equilibrium real rate in Iceland will continue to fall. The current propensity to save, adjusted for the business cycle position, is much greater than it has been for quite a while, and over time, it will contribute to a reduction in the long-term equilibrium real rate. If inflation expectations remain at target, both nominal and real rates will decline accordingly. Exchange rate of the króna and Central Bank foreign currency purchases Responding to the recent strong inflows into the foreign exchange market is one of the Central Bank’s most complex tasks at present. The problem lies, among other things, in distinguishing between short-term inflows, which are only loosely connected to economic fundamentals and are much more likely to stop suddenly or even reverse, and inflows that reflect more lasting positive changes in fundamentals, although these can change for the worse as well. It can be argued that, other things being equal, there should be more foreign exchange market intervention in the former instance and less in the latter. While the foreign exchange reserves were being increased to the desired size during the prelude to general capital account liberalisation, this distinction was less important for policy responses than it is now, as the premises were in place to buy the inflows and top up the reserves, more or less irrespective of the origins of the inflows.

Monetary policy: achievements and review? Már Guðmundsson, Governor of the Central Bank of Iceland. Monetary policy meeting of the Iceland Chamber of Commerce, held at Harpa in Reykjavík on 17 November 2016  Madame Chairman, honoured guests, The Iceland Chamber of Commerce has a long-standing tradition of holding a meeting like this one on economic developments and prospects and monetary policy. The meeting is held following the publication of the Central Bank’s autumn forecast and, in latter years, the Monetary Policy Committee’s interest rate decision. In recent years, it has been the practice to select a particular topic for the meeting, and in keeping with this, today’s topic is: Is independent monetary policy too costly? This departs somewhat from the contents of the Central Bank’s Monetary Bulletin and current tasks of monetary policy, but I will touch on these towards the end of my speech today. Yesterday the Bank published Monetary Bulletin 2016/4, which contained the Bank’s new macroeconomic forecast, and announced the Monetary Policy Committee’s interest rate decision. The big picture of the current state of the economy is that things have seldom been better. Icelanders have received a significant boost from improved terms of trade and growing goods and services exports, particularly due to strong growth in the tourism sector. It is this that underlies the vast increase in Icelanders’ real income and the country’s high employment level. In addition, Icelanders have proven more cautious this time than often before during an economic boom.
Ladies and Gentlemen, it is also our expectation that the bank will continue to support the SME sector in Zambia, as the SME sector is key to sustainable economic growth and development of the country. You will agree with me that SMEs have the potential to create many productive jobs and contribute significantly to our economy, if well supported. It is our expectation that Absa Group Limited, through Barclays Zambia, will continue with its efforts and strategies that promote financial system stability, support monetary policy, enhance financial inclusion and gender mainstreaming for sustainable development in line with the Bank of Zambia’s strategic objectives. Today, as we commission this site, it is my hope that the facility will be of highest standards and that the new premises will provide an environment for the provision of innovative financial solutions to the public as an endorsement of the Absa Group brand promise “Bringing Possibilities to Life.” Master of Ceremonies, distinguished guests, ladies and gentlemen, with these remarks, please join me in applauding the Board, management, and staff of Barclays Bank Zambia, and Absa Group Limited, for this initiative that will introduce convenience and world class banking services and facilities to its clientele. The timing of this project is also a good indication that the Absa Group is opportunity focused rather than challenges. We hope this will rub on to the other players in our economy as well. Thank you and God bless.

Since bottoming out in late 2009, employment here on the island has rebounded by almost 2 1/2 percent. So we’ve come a bit more than halfway back to the early 2008 peak. Moreover, these job gains have come despite ongoing job cuts in local government. While other parts of the region sustained job losses in local government starting in 2010, Long Island’s just started in the spring of last year, creating a drag on the labor market overall. Nevertheless, the private sector has picked up the slack. This is most pronounced in professional and business services, finance, leisure and hospitality, and health care. Even the island’s manufacturing sector has added jobs over the past year. Another sign that a recovery is taking hold on Long Island is that banks that were created just before or just after the financial crisis – while only a small portion of the local market – are starting to show signs of growth. Long Island’s labor market has also been aided by its proximity to New York City. With a large portion of the island’s workforce commuting to New York City, especially from Nassau County, the brisk job creation we’ve seen in the city has helped matters here as well. Unemployment here on the island topped out at 7.6 percent back in late 2009, and it has hovered around 7 percent for most of the past year – a high rate to be sure, but well below both the national and state levels.
It is important to recognise that the moderation in the Chinese economy has been in part, policy-driven, through conscious reforms to restructure the economy to become more balanced and domestic demand-centric. These economic reforms have been accompanied by financial and exchange rate reforms, geared towards modernising the economy and financial system that is increasingly more integrated with the global economy. These reforms are mutually reinforcing as the transformation of the structure of the Chinese economy is necessary to support its integration with the world economy and the international financial system. The commitment to these reforms is crucial in securing the long-term growth prospects for China, even as the Chinese economy faces short-term challenges in the recent period. The recent one-off adjustment of the renminbi reflects a conscious effort by China to align the renminbi to a market-driven mechanism as a part of a crucial reform to allow the renminbi to reflect financial market developments and economic fundamentals. In an environment of continued weakness in global trade, these short-term challenges include managing the ongoing corrections in the real estate sector, leverage in the financial system and more recently, the volatility in the stock market. While these uncertainties may generate concerns over the renminbi in the near term, it needs to be recognised that the long-term growth prospects for China remain intact, and that this will continue to strengthen the foundations that will support the transition of the renminbi as an international reserve currency.

The bank can sell its credit risk on the company, entirely or partially, without needing to cancel the loan or to have any discussion at all with the company. At the same time, the buyer of the credit risk (the seller of the credit derivative) does not need to tie up more than a fraction of the capital that would have been required to take over the credit directly. Moreover, the buyer of the credit risk can in turn easily sell the risk to another party, wholly or partially. Reinsurance thus becomes both simpler and cheaper to manage than with regard to traditional credit insurance. Large investors such as mutual fund companies and insurance companies often want to have a particular amount of credit risk in their portfolios. The credits can actually reduce their total risk, as the prices of the credits do not have such large covariation with other prices, for instance, the prices of shares and real estate. A certain share of credits provides a more diversified portfolio, which gives lower risk for a given expected return. Credit derivatives also makes it possible to divide up credit risks into small parts and to trade these parts at a low cost. This is not possible with traditional credit insurances. As the trade is so extensive, the pricing of credit risk becomes much improved. From the economy’s point of view, it is essentially positive that the credit risk is spread to institutions outside of the bank system.
10  BIS Review 61/2010  Figure 7 CPI inflation (1) (annual change, percent)  Core CPI inflation (1) (annual change, percent)  12  12  12  12  9  9  9  9  6  6  6  6  3  3  3  3  0  0  0  0  -3  -3  -3  -3  07  Jul. 08  Jul. 09  Jul. 10  07  Jul. 08  Jul. 09  Jul. 10  U.S.A.  Eurozone  Chile (2)  Latin America (3)  Emerging Asia (4)  Emerging Europe (5)  1) Geometric average of headline inflation and core inflation of a sample of countries from each region. (2) Chile’s core CPI inflation is CPI without foodstuffs and energy. (3) CPI includes Brazil, Colombia, Mexico and Peru. Core CPI includes Mexico and Peru. (4) CPI includes China, Indonesia, Korean Rep., Malaysia, Singapore, Thailand and Taiwan. Core CPI includes Korean Rep., Thailand and Taiwan. (5) CPI includes Czech Rep., Hungary, Russia and Turkey. Core CPI includes only Hungary. Sources: Central Bank of Chile, Bloomberg, CEIC Data and National Statistics Bureau (INE).

In the second half of last year, it was already growing at an annualized rate of 6 percent. Indeed, we were forecasting that 2010 growth would be around 5 percent as early as last September. The figures up to February 27 – as shown in a box in the Report –, indicated that the midpoint of the growth range could be closer to 6 percent than to 5 percent. Compared with our trading partners or with the average growth forecast for Latin America, this figure is around two percentage points greater. Expansionary monetary policy has played a key role in our economy’s strong performance. Nonetheless, our country was then hit by another shock. On February 27 we suffered one of the worst natural disasters in history that took a tragic toll on our country, causing loss of life, numerous injuries, forced displacement of large numbers of people, and huge material damages. Although the prospects of our country’s progress have not been compromised, this  BIS Review 61/2010  1  new scenario poses important challenges in every aspect of national life, including the conduct of monetary policy. The immediate reaction of an economy to a natural disaster is highly uncertain. Historical evidence tells us little because such events are, luckily, very rare. Therefore, the evaluation of data released since the disaster must be done with extreme caution. In fact, output data for March and April will reveal very poor performance. The reaction of the economy to a natural catastrophe in the medium term is somewhat clearer.
Here, the role of central banks as liquidity provider is essential to ensure the proper functioning of the financial system, and this is one of the main lessons we learned from the mistakes made during the Great Depression that wrecked havoc in the real sector, which could have been substantially reduced. We have also learned that sound regulations designed for normal times and as crisis preventing mechanisms are not necessarily the best for moments of great stress or turmoil, including mark-to-market practices in some segments of the financial industry. It would be premature to draw definitive lessons from the present crisis that is still in the making and going through the damage-control phase. A new wave of discussions on the international financial architecture will come. And although this happens every time there is a world crisis, progress to date has been rather timid. Nonetheless, the potential liquidity constraints that economies outside the epicenter of the crises may suffer, may add an unnecessary burden to countries that had little or nothing to do with today’s events and at the same time are the basis to sustain growth in the world. In synchrony with this, the new liquidity swap facility that is being offered by the IMF is very appropriate. It should be disbursed quickly as current conditions require. In the present circumstances, countries that have saved their terms-of-trade windfalls and enjoy a solid international liquidity position, as is the case of our country, should not have the need to apply for these facilities.

BIS Review 85/2009  9  Chart 7: Long-run capital levels for US commercial banks, 1840-1993  Chart 8: Daily volumes and values settled in CLS  10  BIS Review 85/2009  Chart 9: CDS premia and network uncertainty – pre-crisis  Chart 10: CDS premia and network uncertainty – in-crisis  BIS Review 85/2009  11  Chart 11: LCFI return on common equity  Per cent 30 20 10 0 -10  US securities houses US commercial banks European LCFIs UK LCFIs  -20 -30 -40  Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2003 04 05 06 07 08 Sources: Bloomberg and Bank calculations. (a) Data for European LCFIs and UK LCFIs are half-yearly. Chart 12: Spreads on new mortgage lending by the major UK banks Per cent 4  Maximum-minimum range Interquartile range Median  3 2 1 0 + 12 Jan  Apr  Jul  2007  Oct  Jan  Apr 08  Jul  Oct  Jan 09  Source: Bank of England. 12  BIS Review 85/2009
One consolation for those who wish for an answer is that they can form an opinion of how the Executive Board develops its view of monetary policy through the Inflation Reports, speeches and the minutes of the monetary policy meetings published. 1. Different measures of inflation Annual percentage change  6  6  5  5 CPI UND1X  4  4  3  3  2  2  1  1  0  0  -1 1993  -1 1995  1997  1999  2001  2003  Sources: Statistics Sweden and the Riksbank  8  BIS Review 11/2005  2. Repo rate decisions and inflation forecasts, 1999-2004 Per cent  0,50 IR01:1 IR02:3 IR03:4 IR04:2  Repo rate change  0,25  0,50 IR00:4 IR02:1  IR99:2 IR00:2 IR01:3 IR04:3 IR04:4  IR01:4  0,25 IR99:4  IR03:3  0,00  0,00  -0,25  IR99:3 IR00:1 IR00:3 IR01:2 IR02:2  IR99:1 IR02:4 IR03:1  IR03:2  -0,25  IR04:1  -0,50 -0,6  -0,50 -0,4  -0,2  0,0  0,2  0,4  0,6  Forecast deviation from inflation target  Source: The Riksbank  3.

Christian Noyer: World financial crisis – public and private strategies to overcome the crisis Speech by Mr Christian Noyer, Governor of the Bank of France, at Paris-Europlace, Dubai, 22 January 2009. *  *  *  Ladies and Gentlemen, It is a great pleasure for me to be here and share some thoughts on the financial crisis and on solutions that may be found to overcome the situation. It is too early to draw definitive lessons from recent events in financial markets. It is however vital to start reflecting on the experience of the last few months. Even more in periods of tension than in normal times, action and reflection should reinforce one another. It is at the very moment of managing the crisis that we lay the foundations for the future financial system. Having said that, I propose to discuss with you two main topics: •  The nature of the financial crisis  •  The policies implemented to address it both from a public and a private sector perspective. The nature of the crisis The crisis first emerged as a liquidity crisis. The first symptoms appeared at the beginning of August 2007 when serious disruptions surfaced on the inter-bank market in the Western world. More than a year later, tensions on money markets are still with us. Recent months have witnessed abnormal levels of spreads, a shortening of maturities, and the contraction, or even closure, of some market segments.
But the change was small, and then CDS spreads increased once again, as they did for many banks. The fact that Moody’s announced a change in its outlook for the banks’ credit ratings was no help. To some degree, the sizeable CDS spreads arise from suspicion vis-à-vis Icelandic banks. In their penetration into new markets, Iceland’s banks have doubtless threatened competitors that were established in those markets and were subjected to stiff competition as a result. Perhaps it also matters that Iceland’s banks are in a peripheral area and that such banks are generally subjected to higher premia than are banks in large countries. The size of the banks in comparison with the national economy is doubtless a factor as well. Otherwise, higher premia could be explained by the fact that in recent years Iceland’s banks sought out credit in the global bond market. When conditions for such transactions were most beneficial, there was considerable demand for the banks’ bonds because they were considered to fit unusually well with the various CDOs that were then popular among investors. They generated relatively good yields, especially given the banks’ credit ratings. Conditions have changed dramatically, and there is no longer a demand for such instruments. It would seem that many of them are unwinding – that is, that bonds are being sold off, including bonds from Icelandic banks.

The banks have always passed the stress tests, most recently the one carried out on their balance sheets at year-end 2007. At that time, the equity ratio of Iceland’s largest banks ranged from 11.2% to 11.8%. The result of the stress test was that, even if various severe shocks inherent in the premises of the test were to occur simultaneously, the banks would still have an equity ratio ranging from 10.4% to 11.2%. Their liquidity position was ample at year-end, so there was no driving need to seek funding in the international credit market. But at some point in time, they will need to return to the capital markets. All of Iceland’s large commercial banks have an international credit rating. Though these credit ratings are comparable to those awarded to similar banks in other countries, there is an abiding suspicion in the market toward Icelandic banks. This is difficult to explain fully, and it results, for example, in CDS spreads that are higher than in foreign banks, although CDS spreads also differ among Icelandic banks. It is worth remembering that Kaupthing Bank’s CDS spreads rose when the bank announced its intent to acquire a Dutch bank last August. As the autumn progressed, the other banks’ CDS spreads increased also. That trend continued intermittently until now. When Kaupthing abandoned its plans to acquire the Dutch bank, the reason for the increase last August vanished. Spreads declined slightly thereafter, as a large uncertainty factor had been eliminated.