samchain/econo-pairs-v1 huggingface dataset:
However, the bulk of the rise in deficits has arisen not from this source but from the underperformance of risky asset prices I refer to in the text. 10  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  10  One can’t say for sure why pessimism has grown, though a long period of weak productivity growth, across the developed world, can’t have helped. Nor is it hard to see sources of downside risk. But one thing that’s unlikely to have been the primary cause of this divergence is monetary policy. That’s because an independent easing in policy – that part of it unrelated to declines in the neutral interest rate – tends to push up all prices of all assets, risky as well as risk-free. That was certainly the case after the MPC’s decision in August, just as it was when the Committee first undertook QE in 2009 (Chart 13). As Charlie Bean explained in 2012, the direct impact of QE on pension funds – particularly those who were in balance on the eve of the 10  financial crisis – therefore looks to have been relatively small . Indeed if the MPC and other monetary authorities hadn’t eased policy – if they had failed to accommodate the forces pushing down on the neutral real rate – the performance of the economy and equity markets, and the long-term prospects for pension funds, would probably have been worse.

But early on, it’s as important to look at investment surveys as it is the official estimates. These too bear out the broad shape of the MPC’s August forecast (Chart 14). And as I’ve explained today, that shape has nothing to do with the longer-term consequences of EU exit, depending much more on the uncertainty about those consequences. All that said, there’s little doubt that the economy has performed better than surveys suggested immediately after the referendum and, although we aimed off those significantly, somewhat more strongly than our nearterm forecasts as well. The central projection in the August Inflation Report didn’t involve a recession, simply a slowing in the economy’s rate of growth. But that slowing looks so far to have been more moderate than we feared. Why might that be? Well, again, one shouldn’t rush to judgement here. Even within the quarter, the average forecast error on near-term GDP growth is around ¼% point. And even after the event, it may not be clear why a particular out-turn has differed from the central prediction, in one direction or the other. 11  I gave a talk about this in 2013, highlighting the pioneering work of Daniel Kahnemann (Broadbent (2013)).
But I will say that the speech of the President, if one reads it completely, it’s totally in line with the statement we had in Tallinn in our monetary policy meeting there; the speech that he also made at the European Parliament; and here it was along the same lines. He recalled that domestic drivers of inflation, measured by the underlying inflation, are still subdued, and that we need to be sure that when we get to inflation close to 2% it’s a durable situation and a self-sustained situation that can go on without the high degree of accommodation that we have now: so all these conditions, he reaffirmed them, and then talked precisely about the need to persist and about the need to be prudent in talking about premature withdrawal of stimulus. So in other words we are not closer to an exit, not even a baby step closer, with the forum here in Sintra? Constâncio: Well, we are not predicting what the Governing Council will do. We are not trying to do that. This is the assessment that we have been producing also as a result of monetary policy meetings of the Governing Council itself, like the more recent one we had. So it’s going along the same lines. Personally, I don’t see anything in the speech that would be different from, say, the previous two main interventions about monetary policy done by the President. Let us talk about one area of optimism, and that’s the political tailwind.

Textbook flexible inflation targeting The textbook account of a flexible inflation targeting regime explains that when interest rates are set to bringing inflation back to the target, consideration is also given to the effects on the real economy; an appropriate balance between inflation and real variability is sought, which implies that an immediate reversal to the target is not an end in itself. Textbook accounts of flexible inflation targeting typically give the following answer to the question of how asset prices should be factored into the monetary policy decision: monetary policy should respond to changes in asset prices to the extent that they affect the inflation and growth forecasts. Thus, there is no independent role for e.g. rapidly rising house prices. Their effect on the monetary policy decision should come only through their effect on the inflation and growth forecasts. This recommendation, and the assumptions on which it is based, is something I will comment more on, below. Leaning against the wind Another view often put forward is that a central bank can bring about better outcomes for inflation and output by reacting to rapidly rising asset prices, over and above their implications for inflation and growth.
4  3 [20]  that the central bank determines how its tools are used to attain the goals that have been set. There are also other ways of making the central bank independent of the political system. Personal independence concerns how the bank’s management is appointed. If the board members have long terms of office, are not politicians and cannot be dismissed for political reasons, then there is considerable personal independence. Financial independence means that the bank can take measures without relying on financial support from the Government. One can say that the new act in 1999 gave the Riksbank a large measure of independence according to all of the four varieties above (see Figures 1 and 2). 9 The Riksbank decided itself, through its Governing Council, on the introduction of the inflation target in 1993, and in 1999 price stability was introduced into the act as objective for the Riksbank. Goal independence was thus strong, as the Riksbank can itself determine how the target will be attained in operational terms. One sign of this was that we much later, in 2017, decided ourselves to change the target variable from the CPI to the CPIF. We were also given a mandate to decide independently on how the monetary policy instruments would be used to attain our inflation target and in this way we gained a high level of instrument independence.

12  For suggestions on improving resolution options for systemically relevant financial institutions, cf. also “The Squam Lake Report: Fixing the Financial System”, Princeton University Press, May 2010. 6  BIS central bankers’ speeches  they also restore creditors’ incentives to monitor risk. Cocos can therefore be viewed as partial substitutes for unusable or impractical bankruptcy procedures, as they ensure that one major class of stakeholders – which would otherwise be outside the risk calculus loop – is now interested in monitoring the bank’s risk attitude and contributing to containing the prorisk bias of the other stakeholders. The Swiss solution Resolving the TBTF issue is a first order of priority. It is of utmost importance for Switzerland, given the relative size of the two big banks in relation to economic output.13 The recent history of developments has helped us to understand that our two big banks are not only too big to fail, but that circumstances could arise under which they would be too big to be rescued as well. The solution chosen by the Swiss authorities to address this important problem is fully in the spirit of the above conceptual discussion. It relies on higher capital requirements and a capital surcharge proportional to the systemic externality with a substantial part of the extra capital taking the form of Cocos. It also imposes organisational measures fulfilling the objective of allowing for a “partial” bankruptcy and thus reducing the size of the TBTF externality.
ASEAN, with its half a billion people and a combined GDP of more than $ trillion, will then be a competitive investment proposition. ASEAN leaders will also sign the landmark ASEAN Charter which will transform ASEAN into a more cohesive, effective and rules-based organisation. BIS Review 124/2007  3  Singapore: remaking itself As Asia rises, Singapore will not content itself with being lifted by the rising tide. It will continuously remake itself – strengthening the hull, refitting with a more powerful engine, refurbishing the interior, acquiring new knowledge and learning new skills. To reduce dependence on the global electronics cycle, we have built strong growth momentum in areas such as financial services, tourism and biomedical sciences. Our growth will increasingly stem from knowledge- and innovation-intensive activities. This necessitates more investment in human resource development and the creation of a workforce capable of keeping up with the demands of new economic activities. Singapore is therefore planning to build a fourth publicly funded university. Concurrently, we are enhancing our connectivity with our major economic partners and increasing our economic space through FTAs. We have FTAs with 11 countries, including the US, India, Japan, South Korea, Australia and New Zealand. Negotiations are underway for 11 more, including agreements with China and the Gulf Cooperation Council (GCC). These FTAs will enable investors and businesses to leverage on Singapore to reach out to our FTA partners. We will press on to develop the financial sector.

Beijing is concerned that in the run-up to the Taiwan Presidential Election in March next year, President Chen Shui Bian may make one last throw of the dice which may compel China to act. How the US handles this issue will be crucial in maintaining stability across the strait. Third, Myanmar cannot return to the status quo ante after the government’s crackdown on monk-led protests. Instability in Myanmar can affect its immediate neighbours and hurt the reputation of ASEAN. National reconciliation and an agreement on phased changes and  BIS Review 124/2007  1  power sharing is the only way to prevent another widespread protest, which may end up in a bloody uprising to bring about change. Therefore, ASEAN and Singapore, and so too China and India, fully support the mission by the UN Secretary General’s Special Advisor, Mr Ibrahim Gambari, to help the various parties in Myanmar work towards genuine dialogue and compromise. However, this compromise is not so easy to achieve. Myanmar’s military rulers, the many ethnic groups and the political players deeply distrust one another. The rulers are also highly suspicious of the outside world. This psyche of distrust was borne out of the violent and divisive history of Myanmar after World War II, its complex national make-up of many diverse ethnic groups and, until the recent agreements on ceasefire, the fighting with insurgents. There is no quick and easy solution. Negotiations will be long and complicated.
Collectively, BSA members manage over £ of assets, nearly 15% of assets managed by the UK deposit takers we supervise at the PRA. Also, all 50 BSA members have headquarters outside London enabling a connection with local communities, some members of whom might not have other ways of accessing mainstream financial services. This is further fostered through a network of almost 1350 branches serving more than 26 million members. In line with this, we see our role in supervising BSA members as central to our mission at the Bank of England to ‘promote the good of the people of the United Kingdom by maintaining monetary and financial stability’. My remarks today will focus on two areas. Firstly, a key challenge for the mutual sector to tackle over the coming year, managing a fast-evolving outlook for credit risk whilst supporting your members in the current economic climate. I will be setting out the PRA’s expectations and a flavour of what we are doing in this space. Secondly, the opportunity we are taking to evolve our regulatory regime to ensure it continues to deliver resilience in  1 Refrain, Lys Assia, 1956, Switzerland, winner. 2 3  Making your mind up, Bucks Fizz, 1981, UK, winner. Better the devil, Sonia, 1993, UK  Bank of England  Page 3  the sector, remains proportionate and supports growth, including in light of the Financial Services and Markets Bill which is currently making its way through Parliament.

Dimitar Radev: Positive trends in the banking sector are expected to continue in 2019, however with possible increased challenges Publication by Mr Dimitar Radev, Governor of the Bulgarian National Bank, in the Quarterly Bulletin of the Association of Banks in Bulgaria, issue 56, January 2019. * * * In 2018 the banking sector continued to maintain high level of capital adequacy and liquidity, also generating historically high annual profit. Deposits in the banking system increased, lending grew, and the share of nonperforming loans dropped. We expect these positive dynamics in the sector to continue altogether through 2019. Loan portfolios are a primary source of operating income for the banks in Bulgaria, but credit growth is by definition associated with assumption of new risk. At this stage of credit expansion, banks should continue making adequate efforts to manage the credit risk accumulating on their balance sheets. Large part of the central bank’s recent activities, in our capacity as a regulator and supervisor of the banking system, is focused on the risk associated with bank lending. The BNB Governing Council decided to activate the countercyclical capital buffer from this year. In December 2018, the National Assembly passed new legislative amendments, proposed by the BNB, which provide us with an additional macro-prudential toolbox of measures regarding bank lending. It includes for example BNB’s new powers to require enforcement of limiting the loan-to-value ratio or the debt-to-borrower’s income ratio.
This will be a signal that the interest rate will probably deviate from these assumptions in the period ahead. Monetary policy under uncertainty There is always uncertainty associated with economic projections, but there is also uncertainty concerning the actual state of the economy at the time of the decision. Moreover, the effects of our own interest rate setting are uncertain.10 Because most aspects of the future are uncertain, our projections are seldom 100 per cent correct. Viewed in retrospect, it might appear that monetary policy could have been conducted better. However, interest rate decisions have to be assessed ex ante, in the light of the information that was available at the time that the decisions were made. One of the main problems associated with the conduct of monetary policy under uncertainty is access to real time data that provide good information about inflationary pressures in the economy. Petter Jacob Bjerve pointed this out in an unusually perspicacious article in 1981 on cyclical policies in Norway in the 1970s: “It will otherwise always be a problem for economic policy that the statistics are prepared more or less after the events, and that it takes time after the statistics are published before we are aware of whether new trends have begun to emerge.

In 1973, western economies experienced a recession which would prove to be the start of a long period of sluggish growth. Annual GDP growth in Western Europe was nearly halved compared with the previous ten-year period. This was largely due to a negative shift in productivity growth. In addition, we experienced a cost shock as a result of the oil crisis in 1973. In Norway, the recession in the 1970s was dealt with by means of a strong counter-cyclical policy. Despite price regulation and rising unemployment, inflation rose sharply. This was an indication that structural shifts had taken place in the economy in the 1970s, shifts that were not apparent to politicians and economists at the time. The objective of full employment was given priority at the expense of price stability.3 But we did not achieve higher growth in exchange for higher inflation. An economic policy that fuels inflation does not generate higher economic growth. On the contrary, it paves the way for subsequent recession and unemployment. It would take time, however, before this view took hold in Norway. One of the first to express this idea clearly during the debate in Norway was Per Schreiner, Director General in the Ministry of Finance at the time. He wrote the following in 1982:4 “It has been a common belief in the Nordic countries for a long time that it was possible to make a political choice between price stability and full employment.
They might be an efficient means of forestalling “runs” on a country because they prevent pessimistic creditor expectations becoming self-fulfilling. More generally, whether capital is short-term or not, they could serve as an important incentive device. Having standstills as a credible backstop might in some circumstances increase incentives for debtors and creditors to seek voluntary resolutions to crisis sooner. Through both of these mechanisms, standstills might help resolve coordination failures among creditors, and hence forestall liquidity crisis. How do we ensure that standstills are efficient and equitable? The decision to default must be principally for the debtor. But the official sector can alter debtor incentives in important ways. One incentive device would be for the IMF to support standstills by agreeing to lend through their duration - what the IMF call “lending-into-arrears” - provided the standstill process, once entered into, is orderly and speedy. If standstills were a structured part of the IMF’s ex-ante crisis management framework, this would increase the chances of the standstill process itself proving ex-post efficient. There is also encouraging work being done by the private sector on drawing up best practice guidelines for sovereign debt work-outs. Some have argued that articulating a clearer role for standstills may perversely alter debtor incentives, by weakening the presumption that debtors should pay their debts in full and on time. But an orderly standstills process should support, not supplant, market forces and market disciplines.

In 1995, the monetary strategy of stable exchange rate of the denar was formalized – a strategy for which then and now there is a broad consensus that it is one of the key pillars of the stability of the Macedonian economy. The benefits of macroeconomic stability have been enjoyed for 24 years. Our economy is small, commercial and financially open and hence, prone to external shocks. Despite the numerous external and internal shocks, the National Bank constantly succeeds to keep inflation at a moderate level, which is similar to the European level. Low inflation is extremely important for the protection of the real purchasing power of citizens, but also for maintaining the competitiveness of our exports without which small economies like ours can not achieve higher and sustainable growth. The maintenance of low and stable inflation, as the main goal of the central bank, is underpinned by the stable exchange rate of the domestic currency against the euro. The prudent monetary policy, as well as the good coordination with other macroeconomic policies, led to an almost continuous growth of the foreign reserves, which today are at the highest historical level and directly strengthen the exchange rate stability. Confirmation of the soundness of the policies implemented by the National Bank is a historic step in providing access to European Central Bank’s foreign exchange liquidity. The key to the successful attainment of the goals of the National Bank so far is its strong institutional capacity which has been built for years.
Nevertheless, given the contingencies, we decided that for their convenience they will be allowed a three-year deferral in the creation of provisions on Ukrainian assets. 9 / 14  BIS central bankers' speeches  RIA Novosti’s QUESTION: I wanted to ask, you said that the Central Bank was developing an action plan to reduce inflation volatility through non-monetary measures, among others. What kind of instruments have you already developed? This is the first question. And question two. Have you revised your risk and optimistic scenarios for the next three-years? Thank you. ELVIRA NABIULLINA: Inflation volatility may in fact be determined by non-monetary factors which we are also taking into account. We think it is important to tackle these factors in cooperation with the Government and regional authorities to reduce inflation volatility. In fact, the regional analysis mentioned today also demonstrates that inflation dynamics depend primarily on a competitive environment. For example, inflationary pressure is lower in those regions where local authorities are pushing for agricultural fairs to bring produce to the market. There are also factors related to natural monopolies, and so on. We have already held an expert discussion. Our Monetary Policy Department is onto it. We invite experts to map out such non-monetary risks and specify measures to tackle them. However, these efforts are still underway – we are at present actively engaged in this process. Your second question was about the risk and optimistic scenarios. We have left the baseline parameters largely unchanged, i.e.

But also from the supply side developments were, for a period at least, positive, partly because there was an increase in the working-age population. In recent years, however, it has become evident that many people have ended up outside the labour market, partly as a result of a rise in sick leave. As regards productivity growth, the trend in recent years has been more positive. At GDP level it has been approximately 2 per cent per year or slightly above. This differs from the situation in the 1970s and 1980s. It is likely that the changes in monetary and fiscal policy and increased transparency with stiffer competition have been important in this regard. So how should we feel about developments in the near future? When it comes to productivity, there is reason for optimism, even if the high figures seen in the 1990s partly reflect both rapid growth in the private sector compared to the public sector and robust growth in the ICT sector. Our economy is more open and has greater competition and downward price-pressure in many sectors. The cost pressures in the public sector also have a similar impact. The outlook is considerably gloomier for the labour supply. As I mentioned, developments are now on a downward trend. One cause of this is that economic policy in some respects has become less focused on raising labour force participation. In terms of both transfers and taxes, changes have been implemented that reduce the incentive to work.