samchain/econo-pairs-v1 huggingface dataset:
In addition, the rise in incomes, the presence of abundant foreign capital, the expansion of the banking sector and sometimes negative real interest rates all contributed to rapid credit growth in transition countries. Again, the rates of growth were almost unprecedented before, and in 2007 they reached around 60% year on year in Bulgaria, Romania and around 40.6% in Lithuania. 11 After a previously suppressed consumption, the process of credit growth was understandable and desirable for economic growth. However, the rates of growth are only adding to demand pressures in these countries, and in combination with the other factors, adding to the rise of inflation, rise of imports and further worsening of the current account position. Dear guests, At the current time, these developments pose two particular challenges for the policy makers in transition countries, one a short-term and the other a longer term. The short term challenge is how to lower the risk of high current account deficits, which can cause wider financial crisis, combined with a currency crisis in countries with pegs and currency boards. Both the economic theory and the economic history are clear that current circumstances are not the most favorable for these countries. Worsening current account deficits are not sustainable and can not continue forever. The more they widen, the bigger the pressure becomes for real exchange rate depreciation as a way of restoring competitiveness.

This of course can be a bit easier for countries with flexible exchange rates, which can achieve it by nominal depreciation (and thus risk rise in inflation). However, countries with fixed rates are sometimes forced to abandon their exchange rate regime, as they do not have any other way out of real overvaluation of their currencies. Another risk in the short term might be the contagion of financial crises from abroad, which would combine with fragilities and thus prompt financial and economic difficulties in these countries. The long-run challenges for transition countries are related to the simultaneous maintenance of competitiveness and nominal convergence. What is next for the new EU member states is certainly achieving EMU membership and all of them agree that the stability and opportunities of the single currency are their goal. While achieving this seemed easier a few years ago, the prospects are somewhat worsened in the light of the recent developments. The record high oil prices and the high food prices additionally augmented the inflationary pressures in these countries. The high inflation in most of the transition countries makes them breach the first of the four Maastricht criteria. What is even worse, the forecasts for the next several years for most of the countries show they will probably not meet the  10  Source: EBRD Transition report 2007: November update and NBRM calculations. Data for 2007 are estimates. 11  Source: EBRD Transition report 2007: November update. Data for 2007 are estimates. 4  BIS Review 74/2008  inflation criterion.
4  BIS central bankers’ speeches  Third, they prompt work at bodies such as the Basel Committee for Banking Supervision, the International Organization of Securities Commission or the Committee on Payments and Settlement Systems, to establish the standards and infrastructures and create a level playing field, which are necessary for global markets to function in a smooth and safe way. In so doing, they foster risk-sharing through decentralised markets, avoiding the need to coordinate in the first place. Against the background of the possible “deglobalisation” forces that I mentioned earlier, and given the ongoing transition to a more multipolar currency system, this work may become even more crucial. To summarise, I am not convinced that the existing approach to monetary policy coordination should be fundamentally overhauled at the current juncture. Due to knowledge and legitimacy gaps, we should not believe that there can be a “global planner” which sets the rules or prescribes the monetary, prudential, fiscal and structural policies that each country shall pursue. However, countries can and should maintain the foundations for coordination to make global markets a safer place and allow for joint action in times of crises. The evolution of the IMS The IMS during the Bretton Woods era was strictly rules-based with fixed exchange rates and a gold standard. While appropriate in a world with capital controls and relatively modest trade flows, it proved to be too inflexible in the presence of large idiosyncratic shocks and growing internationalisation.

This has taken place since the demise of the Bretton Woods system at the bilateral level in the context of the IMF’s Article IV consultations and it has expanded recently at the multilateral level with the IMF’s Spillover and External Sector Reports as well as the G20 Mutual Assessment Process, not to mention regional exercises. The resulting recommendations are however not binding and therefore constitute only a light form of multilateralism. Clearly, countries may be reluctant to submit to closer scrutiny, fearing that the recommended policies may not be in their national interest. Thus, better awareness and maintaining a spirit of multilateralism will be a crucial element in strengthening the effectiveness of surveillance and contributing to global stability. This requires institutions that are both legitimate and effective. In particular, lack of progress in global governance reform (reflecting the shift towards a multipolar world) would fuel a lack of trust in the IMS. It would encourage the ring-fencing of national systems and the re-nationalisation of savings, harming growth and jobs in all economies. BIS central bankers’ speeches  5  Conclusion Let me conclude. The belief that the comfortable pre-crisis world could return is long gone. And I also believe that we should not aspire to turn the clock back. The global economy has changed fundamentally, and there is clearly a greater understanding of the role of crossborder linkages. The current IMS leaves countries with more domestic policy options to counter adverse idiosyncratic shocks than the inflexible system of the Bretton Woods era.
It will also contribute to the prompt detection of errors and deviations from targets, allowing banks to implement corrective measures and develop buffers as appropriate at an early stage. Banks should be encouraged to develop systems that allow managers to identify and understand the risks they are facing, consider the risks that may arise in the future, and respond promptly and actively to both. This will maximise the likelihood that they can continue to operate, even in the most difficult of conditions. Continued outreach and dialogue A second lesson I have learned through the development of Basel II is that communication with interested parties is absolutely essential. One reason we were able to incorporate leading practices into Basel II is because of the open and transparent process by which the Framework was developed. There has been a steady dialogue with the industry since the Committee began discussing revisions to the capital Accord back in 1999. Many of the firms represented here today contributed extensive and valuable feedback to the Committee on its proposals over the years. The Committee has tried to explain to the industry as clearly as possible its objectives and methods during this process, and in turn firms and industry associations have shown a willingness to engage in a serious dialogue to find practical, prudent solutions. This has helped supervisors to better understand the state of industry practice. Where we have found these practices to be reasonable and appropriate we have tried to incorporate them into the revised Framework in a sound manner.

The main shock to financial stability and monetary policy would be if asset prices were to drop sharply at the same time as the growth of real disposable income slows down at the end of the aluminium-related investment boom. Lending developments As I mentioned before, lending growth is a cause for concern, both for financial stability and the Central Bank’s inflation target. Domestic lending grew at a brisk pace in 2003 and this development appears to be heading in the same direction this year. Total domestic lending by deposit money banks over the twelve months to the end of January increased by about 23%, which is above a rate consistent with longterm price stability and economic stability. The period 1998 to 2001 provides a recent example of the consequences of heavy credit growth. Both arrears and loan losses rose in the wake of the credit boom, leading to a temporary tightening of the commercial banks’ and savings banks’ foreign funding. While the recession and the ensuing strain on the financial system are now over, it can be partly ascribed to relatively favourable economic conditions and the consequently sharp turnaround in the exchange rate of the króna that financial companies only sustained minor setbacks. Proportionally, the highest growth in deposit money banks’ lending has been to foreign borrowers, but foreign currency-denominated lending to domestic entities has also surged, by more than 45% over the past 12 months.
0,4 / 1,0 / 1,8  One approach to a more detailed separation of trend or core inflation from these types of transitory price effects involves looking at the various indicators of underlying inflation that have been developed at the Riksbank. Whereas annual CPI inflation in the period 1996–98 averaged 0.7 per cent, inflation as measured by UND1X, which excludes interest expenditure, taxes and subsidies, averaged 1.5 per cent. As measured by UNDINHX, which also excludes goods that are mainly imported, inflation amounted instead to 2.1 per cent. However, the latter indicator disregards a large proportion of the factors that contribute to a weaker price trend for goods in the longer run. 6. Conclusions about inflation 1996-98  ■  Inflation - measured with the CPI - was below the target and the lower tolerance limit during 1996-1998  ■  CPI-inflation has been markedly affected in all three years by transitory effects that are easy to identify  ■  Excluding more transitory price effects, inflation has been inside the stipulated tolerance interval  This review shows that in all three years (1996–98) inflation has been below the target expressed in terms of the CPI. However, excluding more transitory price effects that monetary policy neither can nor should try to counter in full, inflation has been inside the stipulated tolerance interval. I shall be returning to the reasons why price effects of this type should be disregarded in an appraisal of the Riksbank’s monetary policy.

It is essential to channel them more towards financing the two major transformations of the coming decade: the ecological and digital transformations. As regards the economic situation, listening to more than 8,000 companies, we will publish our next monthly survey on Tuesday 11 January, and will provide a first assessment of the effects of the fifth wave. We remain confident that they will be relatively limited: we have learned over the past two years that every Covid wave, however serious, has diminishing economic effects. In our December projection, we showed that even an adverse scenario of further severe health restrictions – which is not the case today – would not prevent the French economy from returning by next year to the GDP trajectory it would have followed in the absence of the Covid crisis. These possible restrictions would admittedly reduce average growth in 2022, but this should be fully offset by additional growth in 2023. The other short-term issue is of course that of inflation: it is now close to its peak in our country (December showing first signs of stabilisation) and in the euro area. While remaining very vigilant, we believe that supply difficulties and energy pressures should gradually subside over the course of the year. We should then return not to the low inflation of the past, but to a new inflation regime close to our 2% target, with monetary policy normalising in stages accordingly.
Any financial system - and the Swiss system is no exception - can be misused in order to transfer or recycle money issued from, or linked to illegal activities, including terrorism, drug trafficking, illicit trades in weapons, modern slavery, and corruption, just to name a few. To be sure, a money laundering risk already existed in the past. As a result of globalisation, however, and of the growing significance of organised crime, the risk has increased considerably in recent years, not just in my country, but in every major financial centre. For this reason, a dense network of legal regulations, controls and self-regulatory mechanisms is necessary in order to make a financial centre as unattractive as possible for criminal funds. Switzerland has been one of the first countries to introduce strict anti-money laundering laws. They cover the activities not only of banks, but also of any other financial intermediary such as insurance companies, funds managers, lawyers and even fiduciaries. Our experience so far has shown that an efficient fight against financial crime requires two specific rules: first, the application of strict due diligence procedures that includes careful identification of the customers, i.e. of the beneficial owners of the assets involved; second, the obligation, imposed to the market intermediaries to inform the authorities in case of any founded suspicion of money laundering. I am fully convinced that an effective fight against money laundering can only be successful if an active co-operation between financial institutions and authorities is promoted.

Jean-Pierre Roth: The challenges of an international financial centre: the Swiss case Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, to the British-Swiss Chamber of Commerce, London, 26 February 2002. *  *  *  It gives me great pleasure to have the opportunity to address your distinguished assembly today. Like all the Swiss I know, I always enjoy coming to London. Even though there are considerable differences between our two countries, we have many things in common. We are both proud of our history and of our colourful traditions, we cherish our freedom and our independence. What’s more, in both our countries, the financial industry has been a pillar of our economic strength in recent times. But these days, the most striking parallelism between the United Kingdom and Switzerland can be seen in monetary affairs. Both countries are “outs”: they do not belong to the Euro-zone. In Britain, the currency is still the pound sterling and, in Switzerland, we still have a preference for our franc. We thus both face the same challenge: living next to a large currency area which absorbs most of our foreign trade. This situation is new for both of us. It is of course not up to the Swiss central bank governor to speculate how long this situation will last in the United Kingdom.
Ladies and gentlemen, The economic crisis, which occurred in 1997, caused the Bank of Thailand to review its role and task as the central bank of the country. This review pointed to a number of weaknesses in the Bank of Thailand's work in the past. As a result, the Bank has embarked on a comprehensive restructuring and modernisation programme aimed at improving the works of the Bank of Thailand to best serve the roles and responsibilities as a central bank. The strategy focused on 4 aspects, namely organisational structure and work process, human resource management, decision marking process, and database and information technology. The Bank of Thailand started the restructuring programme at the beginning of 1999 with the revamping of the management levels. Emphasis was placed on shorter lines of command, which facilitate fast and effective problem solving. The organisation is divided into five main business groups; namely, monetary stability, financial institution stability, corporate support services, financial institution rehabilitation and strategic capabilities. Objectives, roles, and responsibilities of each group are clearly stipulated. In 1999, the modernisation programme put the main emphasis on improving the work process.

As for Thailand’s international financial position, even though exports will not be as buoyant as this year due to a less favourable external environment and imports will continue to increase in line with the economic recovery, the current account will continue to record a surplus in the year 2001, though of a smaller amount. Although the Thai economy will continue to expand, there are a number of important issues to be taken into consideration:  The first issue: The US economic slowdown External risks will be increased as the US economy is expected to slow in the coming year. How much should we be concerned about this, given that the USA is a major industrial country and the major export market for Asian countries? The degree of Thailand’s exposure to the US market can be considered moderate, as exports to the US market constitutes about 21% of Thailand’s total exports. Major export goods include textiles, electrical appliances, electrical parts and integrated circuits. Over the years, the structure of Thai exports has diversified considerably in terms of both markets and goods, thus reducing over dependence on any particular market or goods. It is expected that this diversified structure and the enhanced price competitiveness will help cushion any adverse effects on Thai exports caused by the US economic slowdown. The second issue: Restoring public confidence Given that exports will slow down, economic recovery will have to rely more on domestic demand which in turn depends on the recovery of purchasing power.
10  BIS central bankers’ speeches  Chart 1 Total AUM of US insurance companies, pension funds, mutual funds and other funds, 1946 – 2013 ICPFs Mutual funds (a) Other non-property funds  Per cent of GDP 250  Chart 2 Total AUM of UK insurance companies, pension funds and mutual funds, 1980 – 2012 ICPFs  Mutual funds  Per cent of GDP 250  200  46 51 56 61 66 71 76 81 86 91 96 01 06 11  150  150  100  100  50  50  0  Source: US flow of funds  80 83 86 89 92 95 98 01 04 07 10  Chart 3 Relationship between GDP per capita and managed assets  Chart 4 Global assets under management in selected specialised mutual fund types(a) 60,000 50,000 40,000  Emerging market Corporate bond High Yield Mortgage-backed Total Return  $ billions 900  30,000  800 700 600 500 400  20,000  0 100 200 300 AUM of ICPFs and mutual funds as per cent of GDP  0  Source: OECD, ONS, Investment Management Association and Bank calculations  (a) Other non-property funds include closed-end funds, exchange-traded funds and money market mutual funds  GDP per capita, $ current prices  200  300  10,000  200  0  100  Source: OECD Statistical database and Bank calculations.

We now have more effective foreclosure law, a credit bureau, and accounting standards such as IAS 39 that conform to international best practices. Moreover, under the Deposit Protection Agency Act which will replace the current blanket deposit guarantee in place since 1997, the establishment of the Deposit Protection Agency should reduce banks’ moral hazard and enhance market discipline. That is by putting pressure on banks to improve financial strengths if they want to attract and retain depositors. As part of Thailand’s efforts to advance reforms, the Bank of Thailand will, under the secondphased financial master plan, focus on improving efficiency and intermediary functions of the financial sector by reducing regulatory costs, enhancing legal and information infrastructure, and increasing the level of competition through further deregulation and liberalisation. Deregulation would potentially involve expanding business scope and enhancing the role of existing players, including banks, non-banks and other niche banks. One of the key factors for deciding the optimal number and type of new players would be the value added that new financial institutions, be they universal banks or niche banks, could bring to the financial system, such as technical expertise and product innovations. Having said this, I wish to emphasize that we will also closely look at the risks from potential concentration of market power and financial instability stemming from disorderly competition and exits. Last but not least is better governance to bring about better risk management.
The role of economic policy The third engine of growth in the world economy at present is the stimulus provided by a range of policy measures. Economic policies have played a role in stabilising world economic and financial conditions in three ways: first, by direct interventions to underpin the stability of banks and the financial system more generally in many economies; second, through stimulatory fiscal policies; and third, through supportive monetary policies – very low interest rates and direct injections of money to support demand in a low interest rate climate, such as the MPC’s policy of “Quantitative Easing”. However, the current level of stimulus from monetary and fiscal policy was designed to turn around economies in the wake of the traumas we experienced 12–18 months ago. As confidence builds and private spending recovers, it is likely to be appropriate to gradually withdraw at least some of this policy support for demand, without jeopardising growth prospects. The need to re-adjust economic policy is most obvious on the fiscal side, where deficits are very high by historical standards, particularly in the US, Europe and Japan – as Chart 7 shows. These large deficits reflect the important role that public spending and tax policies have played worldwide in stabilising economic conditions during the recession. But to ensure sustainable public finances over the medium-term, these budget gaps will need to be closed over the recovery.

However, as we saw in the mid-2000s, there is also the associated risk of upward pressure on inflation from global energy and other commodity prices, if the momentum of world growth becomes too strong. Fourth, the high degree of stimulus provided by fiscal and monetary policy to combat the recession will need to be withdrawn over a period of time. Returning budget deficits to a more sustainable level will require a prolonged tightening of fiscal policy in many countries, including the UK. Monetary policy can provide an offset by continuing to support the growth of private spending – though the appropriate degree of monetary stimulus will need to be continually reassessed in the light of the progress of the recovery at home and abroad and its impact on inflationary pressures. Given the turbulence we have seen in the major economies of the world over the last two years, it is very natural to worry about setbacks to the recovery, both in the UK and overseas. In the past, economic recoveries have not been smooth and linear. So we should expect to see some variability in growth rates, both at home and abroad, as this recovery develops. However, looking through this data volatility, there are also good grounds for expecting the growth of the world economy to continue to provide a healthy support to the UK’s economic recovery over the years ahead.