samchain/econo-pairs-v1 huggingface dataset:
Annual inflation, as measured by the national consumer price index, stood at 1.0% both in the fourth quarter of 2002 and the first quarter of 2003. In April, inflation dropped to 0.7% and amounted to 0.4% in May. This decline is primarily attributable to a basis effect. While inflation of domestic goods has remained fairly stable as of late, inflation of imported goods was relatively volatile. This is a result of oil prices having fluctuated sharply in the recent past. With regard to domestic goods, it is striking that rents have not risen for a while now while prices for other services - particularly public services - have augmented at an aboveaverage rate. The core rate of inflation calculated by the National Bank has stood at slightly below 1% for a while. This year the National Bank began publishing its inflation forecast once every quarter. Our inflation forecast of March 2003 (the dash-dotted green curve in the graph) shows that at that time we assumed, based on a stable three-month Libor rate of 0.25%, that inflation would gradually rise to 2.5% in the fourth quarter 2005. This inflation forecast was based on the assumption that the US economy would see a decisive recovery already from the second quarter of 2003, followed by an upswing in Europe toward the end of 2003. This proved to be too optimistic a scenario. In our latest inflation forecast (red dashed curve) we anticipate a renewed delay in the global recovery of just over half a year.

The marked deterioration in the labour market makes for more uncertainty and depresses consumer sentiment. Even though there are first signs suggesting a stabilisation of demand for capital goods, corporate investment activity is still at a low ebb. Despite the weaker franc against the euro, incoming orders and the order backlog stayed at an unsatisfactory level up until April. Capacity utilisation in the industry remains inadequate. Swiss gross domestic product is therefore not likely to grow in the second quarter of 2003 either. Any recovery of the Swiss economy is dependent on a sustained increase in growth in exports, which should then lead to a turnaround in the currently still weak capital spending. We expect that this upswing will set in gradually in the second half of 2003 and then continue at a more vigorous pace next year. Private consumption should also pick up a little more. GDP growth is therefore likely to increase somewhat in the second half of the year but will nevertheless remain moderate. In the current year we anticipate real economic activity to stagnate overall. For next year we expect a perceptible economic upswing. We are likely to see a continued rise in unemployment to the end of the year and do not expect the labour market to improve before the middle of 2004. Inflation forecast I shall now turn to the course of inflation and our new inflation forecast.
This recent development is probably due to the market's long-term assessment of the strength of the Swedish economy relative to the euro area, but also to the general weakening of the dollar. The forecast for the coming two years remains largely unchanged since the June Inflation Report. All in all, the Riksbank's inflation forecasts have been adjusted only marginally since August. Excluding the effects of energy prices, inflation a couple of years ahead is in line with our target. Including energy prices, UND1X inflation is forecast to be 1.7 per cent while CPI inflation is expected to stand at 2.1 per cent at the end of the forecast period. Some risk factors Of course there are factors that could upset the main scenario I have presented for economic activity and inflation. As before, there is a risk that demand in both the United States and Europe could show weaker growth than expected. The deficits in the US public finances and the current account could push up interest rates, curbing consumption and investment. However, there is also a possibility that US GDP growth may surprise on the strong side if households choose not to increase their saving. There are as yet no clear signs of a recovery in Europe. The strained public finances are a source of uncertainty that could affect households and firms. In light of these factors, it is important to monitor new economic data in the coming months to see if it confirms the picture of a more clear-cut recovery.

The Riksbank's forecast, like that of other analysts, was that the international recovery would be slower and more prolonged. There were several reasons for this, including geopolitical unease and increased caution among households and firms in the wake of the stock market fall. The conditions for a clear recovery in the euro area were perceived as poorer than we had earlier believed, which made a recovery in other countries, including Sweden, more difficult. The more negative economic outlook, with inflation prospects below the target of 2 per cent, meant that we decided to cut the repo rate during the summer by a total of 0.75 percentage points. The rate is currently at 2.75 per cent. Minor changes in outlook for economic activity So far, international developments have been largely in line with our assessments from the summer. The expansionary policy now appears to be taking effect in certain areas, particularly the United States, where signs of a recovery are becoming more apparent and the risks of a setback appear more slight. The Asian economies are also developing relatively strongly. On the other hand, the prospects for the euro area still appear to be gloomy. In time, the expected upturn in the United States is expected to support a gradual upturn in Europe. All in all, the Riksbank's assessment is that GDP growth in the OECD area will be 1.9 per cent this year, 2.8 per cent in 2004 and 2.6 per cent in 2005.
A second issue I would like to point out is related to the credibility of the Central Bank, which is also a very important concern for emerging economies like Chile, where credibility was gained over several decades of responsible policymaking, and losing it would mean a costly institutional setback. A strong advantage of having monetary policy focusing exclusively on price stability is that it simplifies communication and enhances accountability, with the resulting positive effects on credibility. Adding a different objective would hinder transparency, endangering the anchoring of inflation expectations. However, independently of the convenience of following a LAW strategy or keeping the precrisis consensus with monetary policy focusing primarily on price stability, I am convinced that the main lesson from the Crisis is that regulatory frameworks aimed at specific sectors and markets are a key element of a defense against financial disruptions. Macroprudential policies, and in particular monetary policy, are not substitutes for an efficient regulatory framework. Microeconomic policies can be targeted much closer to the source of market imperfections, mitigating their effects while at the same time avoiding the economy-wide costs of contractionary macroeconomic policies. We cannot forget that inefficiencies in the regulatory framework were at the heart of the buildup of risks in the run-up to the crisis. The fact that fragilities in the financial system, namely inadequate levels of capitalization and liquidity, were not properly and timely identified, may primarily reflect inadequacies in regulation and supervision.

At the same time, the sustainability of national public finances must be ensured; this is essential for the smooth functioning of the monetary union. With this in mind, the European 2  In line with the findings of M. Alloza, D. Leiva León and A. Urtasun (2022), “The response of private investment to an increase in public investment”, Analytical Article, Economic Bulletin 2/2022, Banco de España. 3  See P. Cuadrado, M. Izquierdo, J. M. Montero, E. Moral-Benito and J. Quintana (2022). “El crecimiento potencial de la economía española tras la pandemia”, Documentos Ocasionales Nº 2208, Banco de España (English version forthcoming). 6  Commission is reviewing the European fiscal rule framework. In my view the framework needs to be simplified, by establishing an expenditure growth rule and a debt-to-GDP ratio anchor, and countries’ capacity to build up fiscal buffers in good times for use in crises needs to be reinforced. In the case of Spain, shoring up the sustainability of public finances calls for a medium-term fiscal policy strategy. This should involve immediately setting out a multi-year fiscal consolidation plan for implementation once the economic impact of the pandemic and of the war in Ukraine has been overcome. The plan should have broad political consensus and be accompanied by an efficiency review of public spending and the tax system, including all tiers of general government.
However, other lenders remained in these markets, including those without ON RRP access, those who received funds late in the afternoon after the ON RRP operation had already occurred, and those for which the ON RRP was not an acceptable substitute. On this last point, for some institutions, the ON RRP is an imperfect substitute to lending in private unsecured markets because, in the tri-party repo system through which the ON RRP is settled, cash is not returned at maturity until late the next day, whereas in private unsecured markets, earlier return of funds can be negotiated.39 These quarter-end effects, as measured by the effective federal funds rate, are likely to appear a bit larger when we switch in early March to a median calculation. As I mentioned, on December 31, the median fell a bit more than the mean did, 20 basis points in the median versus 15 for the mean. A larger relative decline isn’t unusual; averaging across the quarterend dates in March, June, and September 2015, the median declined by 7 basis points while the mean declined by 6. The median declines more because it is, in most cases, a better measure of the center of the distribution of traded rates – an issue the Desk analyzed at some length in the technical note I mentioned earlier. This difference between the two might grow a bit more as rates move further from zero. In secured markets, rates in the tri-party repo market on year-end were relatively stable.

We closely monitor industry structure and fund flows to detect whether the framework is having any unintended impact. For example, we watch banking data and money fund holdings to see if savings are shifting between the two, because if such a shift had to reverse as we wound down the ON RRP, those flows could potentially create costs to the firms concerned and also unnecessary problems for market functioning. We also keep track of prime money funds converting into government-only money funds, because if they do so on the mistaken impression that the Federal Reserve would provide a risk-free investment opportunity indefinitely and on a very large scale, they might later have to unwind that change when their error became apparent. Avoiding financial instability The third lens for evaluating the framework is the extent to which the framework avoids augmenting risks of financial instability. In particular, the framework shouldn’t create a risk that, in times of stress, money market lenders will rapidly disintermediate their usual counterparties and come to the Federal Reserve instead, such as through the ON RRP facility.27 Of course, flight-to-quality effects existed in financial markets long before we put the new framework into place – what I’m referring to is a situation where the framework facilitates those effects or makes them larger. We address the risk of sudden surges in take-up in a couple of ways. For example, we can employ vigilant market monitoring to detect any such shifts and allow the FOMC to formulate a response.
If successful, this will provide alternatives for cheaper, safer and faster cross border transactions. Benoit and my respective committees took a hard look at general purpose CBDC, – and there are many implications - including cost of bank funding, credit provision, and financial 26.  stability with the risk of deposits possibly taking flight to central banks during stress periods. These are issues that will have to be addressed should a central bank be deliberating on issuing digital currencies to its wider population. The CPMI and MC study is a reminder that even as we push the boundaries of payments and aim to utilise the latest technologies, central banks need to carefully assess each change and the larger impact to financial stability as well as monetary policy, before jumping on the bandwagon. E. CONCLUSION These are some of the issues that central bankers are grappling with in Asia, and how Singapore thinks about regulating this innovative area of payments through innovative regulation. With the fast-paced and global nature of changes, cooperation and 27.  dialogue between central banks are more crucial than ever before. I am glad to see many familiar faces from various central banks here today. The conference today is a useful forum for us to continue our dialogue, share important perspectives and keep tabs on the latest developments. 28. Thank you, and I wish all participants here today a fruitful two days ahead. 1 1 Capgemini, World Payments Report 2017 (Developed/Mature APAC includes Australia, Japan, Singapore,  and South Korea.

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the banking crises in the Nordic countries around 1990. Today, I will discuss whether and how monetary policy should take the build-up of financial imbalances into account. I will also touch upon the driving forces in the foreign exchange market. The krone is affected by mechanisms similar to those found in other asset markets. Finally, I will say a few words about current economic developments. Internationally, developments are weaker than expected. Interest rate cuts are expected in a number of countries. The fall in international interest rate levels has dampened the effects of our interest rate reductions on inflation. Growth in Norway is likely to be fairly weak now, and with an unchanged interest rate, inflation is likely to remain below target in the period ahead. The easing of monetary policy will therefore continue. Norges Bank's Executive Board will also carefully consider reducing the interest rate in larger steps. Price stability and financial stability Seeking to foster price stability and financial stability is often considered a natural task of central banks. In Norway, the Government has set an operational objective for monetary policy. This objective 1 is low and stable inflation. Financial instability is often defined as the absence of financial stability. Financial instability is characterised by unduly wide fluctuations in prices for assets such as dwellings, commercial property and securities, or failure in the functioning of financial institutions or financial markets. Financial instability is characterised by disturbances in credit availability or the flow of capital.

Aligning the operational framework of monetary policy to European standards is another challenging objective the central bank faces. Obviously, I am talking about the still high reserve requirement ratios (given the need to contain credit expansion, foreign currency lending in particular, during the economic boom) and the relatively large width of the interest rate corridor (initially warranted by the imperative of cooling off speculative capital inflows and domestic currency appreciation). The NBR has capitalised, in the past two years, on the window of opportunity provided by the favourable macroeconomic and financial background to rectify the situation to a large extent, yet the process needs to be continued until reaching the prevailing levels across the EU. Looking ahead, it is essential that the NBR identify, as it has until now, the right timing for the upcoming stages of the alignment process to unfold  2  BIS central bankers’ speeches  without impairing the smooth functioning of the markets and without deteriorating key indicators for investor sentiment or, more generally, public perception. I will end my brief overview on the economic state of play in Romania by expressing my hope that this event will turn out to be the beginning of a lucrative and mutually beneficial partnership. BIS central bankers’ speeches  3
For example, according to the European Investment Bank Investment Survey, the share of EU firms putting effort into shortening their supply chain increased from 10% in 2021 to 20% in 2022, while that increase was from 20% to 30% in the US. And around 40% of German companies are trying to reduce their dependence on Chinese inputs. This increased security is likely to lead to less risk-sharing capacity between countries and higher transaction costs. Third, to the extent that international trade is negatively affected by geopolitical factors, a trend towards regionalisation will also emerge, as a mechanism to continue to enjoy the benefits of globalisation but on a smaller scale. As an illustration, in 2022, 44% of global companies were developing regionalised supply networks (up from only 25% in 2021). Evidently, some of the above-mentioned trends may well imply a further slowdown of the globalisation process beyond that observed in recent years, or even result in deglobalisation pressures. The EU response In response to these challenges, the EU has recently been launching a series of policies within the so-called Open Strategic Autonomy agenda: an emerging set of regulatory, structural and fiscal policies that seek to address the EU’s economic vulnerabilities arising from geopolitical considerations. Under the framework of Open Strategic Autonomy, three types of policies have been proposed to reduce the EU's vulnerabilities. A first set of measures aims to assess supply chain dependencies and vulnerabilities and increase the resilience of the European industrial system.

09.02.2023  (De)globalisation and economic policies in the European context Dialogue with the Governor on the Future of Globalisation/Cañada Blanch Centre for Contemporary Spanish Studies and London School of Economics and Political Science London Pablo Hernández de Cos Go verno r  Let me start by thanking Professor Andrés Rodríguez-Pose, the Cañada Blanch Centre for Contemporary Spanish Studies of the London School of Economics (LSE) and the LSE for their kind invitation, and for giving me the opportunity to hold this dialogue with you on a fascinating topic: the future of globalisation. The questions currently surrounding this topic are of the utmost importance for highly open and integrated economies, such as the euro area and the UK. The two extraordinary shocks that have recently hit the global economy, the Covid-19 pandemic and, above all, the Russian invasion of Ukraine, have disrupted global value chains and commodity markets, and generated an environment of heightened uncertainty and geopolitical tensions. Added to the past and present episodes of trade tensions between the US and China, among others, these shocks have prompted renewed questions regarding the future of globalisation and the increasing importance of geopolitical factors in shaping international economic relations. Although the globalisation of goods was slowing down even before the pandemic, concerns about the resilience of global value chains and the supply security of strategic products are now becoming more apparent in decisions made by firms and policy measures considered by governments.
It was the CPMI’s analysis and standard-setting that led to the adoption of payment systems that provide “real-time gross settlement with intraday finality,” securities settlement systems that ensure “delivery versus payment,” and foreign exchange settlement systems that ensure “payment versus payment.” This fundamental evolution of systemically important payment and settlement systems was instrumental in mitigating significant sources of systemic risk and laying a solid foundation to support the increasingly global financial system. In parallel, it was the CPMI that first defined the concept and processes of “central bank oversight of payment and settlement systems” and implemented the associated principles for “central bank cooperation.” This also supported many central banks and securities regulators in their efforts to gain explicit legal responsibility and power to apply standards aimed at promoting broader “financial stability” and containing “systemic risk.” Title VIII of the DoddFrank Act in the United States is a good example of this. This means that many authorities now have greater capacity and responsibility to apply and enforce the PFMI as requirements, where previously a number of regulators were constrained to treating earlier standards merely  BIS central bankers’ speeches  1  as “recommendations.” Taken together, we have made considerable progress in terms of the global regulatory regime to reflect the growing importance of FMIs and central counterparties (CCPs) within the financial system. Let me briefly list a few of the accomplishments of the PFMI: •  They are now being globally adopted and implemented as mandatory, and the specific requirements themselves have been raised substantially.

As always, what I have to say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 The first trend has been the development of a global financial system. This has increased financial system interdependencies and, hence, the importance of harmonizing standards across national regulatory regimes. It also has made it more important to avoid regulatory arbitrage and race to the bottom types of behavior that could weaken the resiliency and robustness of the global financial market infrastructure. The second trend is the increasing importance of FMIs within the financial system. As trading across a more complex array of instruments and products proliferates, and as more trades are centrally cleared, well-managed FMIs play an increasingly important role within the financial system. The third trend stems directly from the first two. With the global financial system becoming more prominent and FMIs playing a bigger role within this global financial system, it has become ever more essential that major FMIs operate safely. When run well, they mitigate risk. But, run poorly, they could be a source of contagion and risk propagation throughout the global financial system. This means that the CPMI’s work has become much more critical in ensuring a safe and sound global financial system. The growing influence of the CPMI can be seen in its success in staying ahead of these trends.