samchain/econo-pairs-v1 huggingface dataset:
9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Chart 4 How the ALF will work19  We’ve come a long way since Eddie George’s speech almost 20 years ago. But one thing that remains more important to us than ever is working with you. The liquidity facility I’ve described here today is in no small part a product of close and committed co-operation between the Bank, industry bodies and the private sector. It’s a real step forward, but it’s only one step. Through continued engagement and focused effort, together we can build a more innovative, diverse and inclusive marketplace: one which really can meet the needs of every part of our society. Thank you  19  In the first instance, (1) the Bank prefunds the ALF with an interest-free loan, which is used (2) to purchase eligible sukuk and (3) any hedges required to insulate the fund from FX risk. Islamic banks then (4) place deposits in the ALF, the principal value of which is (5) guaranteed by the Bank to ensure the facility is HQLA-compliant. In the event the aggregate value of participating bank deposits do not reach the aggregate value of the fund, the Bank will step in as co-depositor for the residual amount.

But that needn’t be so – because key aspects of Islamic finance make it particularly well suited to financing the post-Covid recovery:   First, the philosophical focus on equity-like sharing of risk and reward will become increasingly relevant as market participants get to grips with the scale of debt accumulated in response to Covid. The attractions of debt are obvious when interest rates are so low – particularly for those able to lock in long-term fixed rates in local currencies. But those borrowing at floating rates, at short maturities, or in foreign currencies, face sharp negative income shocks when rates rise, debt rolls over, or local currencies depreciate. Risk-sharing contracts, including those promoted by Islamic finance, pose materially lower medium-term risks to stability.12 The Bank of England has long advocated the risk-sharing merits of GDP-linked instruments, which could be packaged in sukuk form. 13 And, together with HM Treasury and the FCA, we have recently announced a high-level working group to consider ways to foster a longer-term financial markets culture to support productive investment.14    Second, Islamic finance seeks to avoid investing in socially detrimental activities. In fact, it was pro-ESG before the term was ever invented!
We, here in Cyprus, know what a challenge is and how to overcome it. A country at the edge of the Mediterranean sea, has managed to place itself to the political and economic core of the European continent. A small island with a part of it under occupation, thrives thanks to its extroversion and its people, who despite having been put to the test so many times in the past, have never stopped creating, evolving and moving forward. I have no doubt that together with our European partners we will take all the necessary actions to overcome this challenge as well, guided by our common core values and principles. As the great French novelist Victor Hugo said, "Changez vos opinions, gardez vos principes; changez vos feuilles, gardez intactes vos raciness" "Change your opinions, keep to your principles; change your leaves, keep intact your roots". Here in Cyprus we often say that "a captain is proven capable when she is in a storm". And hence, I consider ourselves lucky since our ECB captain steering us through both the Covid and geopolitical storms is Christine Lagarde, a leader of undoubted capacity and experience, whom I thank again for being with us today and would like to invite her to the podium to share her thoughts with us. 3/3  BIS - Central bankers' speeches

In this respect, the Banco de España has already approved the incorporation of sustainability and responsibility criteria into its investment policy for the reserve portfolio it manages. As a result, and taking into account our mandate obligations, we are progressively increasing our holdings of green bonds and, for example, we are one of the founder members of the green investment fund set up by the Bank for International Settlements. Conclusions In conclusion, the challenges associated with climate change require coordinated action, both at international level and at the level of the various different economic policies. Allow me to stress that it is governments who have the legitimacy and are best prepared to lead the process of transformation to a more sustainable economy. Thus, fiscal policy should play a leading role in this process, and also in the measures needed to mitigate the social costs of the transition. In any event, the importance of the financial sector in channelling the enormous funds needed to make the investments required by this transition and to identify the opportunities that may arise in this process is unquestionable. We supervisors and  15  https://www.ecb.europa.eu/press/pressconf/2020/html/ecb.is200123~0bc778277b.en.html. See B. Couré (2018), “Monetary policy and climate change”, speech at the conference Scaling up Green Finance: The Role of Central Banks, Berlin, 8 November. 16  7  central banks must ensure that financial institutions properly incorporate climate change risks and concentrate on creating the appropriate conditions conducive to the capital flows needed for the transition to a sustainable economy.
The recent change in the SGP concerns a relaxation of the rules. The definition of a severe recession, being a valid reason for exemption from the EDP, has now been relaxed. Also, a longer time frame for taking effective action is allowed, now three years instead of the earlier two, from when the deficit occurred. The SGP has received its fair share of criticism, both before and after the changes made in 2005. Although it undoubtedly has it shortcomings, it is important to view it both in a longer perspective and from a more theoretical point of view. Too many euro area members have had lax fiscal policies in the past, resulting in deficits around 3 per cent of GDP or more. Combined with current low fiscal ambitions, this clearly constitutes a problem. However, with several EU countries in recent history having experienced deficits several times the size of that stipulated by the SGP, the main goal of a framework does not necessarily have to be to strive for a perfect world, but rather to avoid very large deficits. Somewhat unfairly, the SGP is sometimes evaluated as if it was the framework of an optimal policy. Trying to optimise everyone’s well-being, one would have to take everything into account. However, in my view, the SGP has more in common with a simple instrument rule. Although not optimal, simple rules have the advantage that they increase the chance of avoiding large policy mistakes –a measure by which the SGP so far has succeeded.

Obviously, a non-negligible part of the future environment for central banks hinges upon these developments. As time goes by, they will provide us with guidance as to which of the two corner solutions for exchange rate policy will prove the most popular – a freely floating currency or membership of a monetary union. However, although important, these developments are admittedly slow and differences in the end-result should not be exaggerated. I merely intend to suggest that the transition in stabilisation policy that comes with joining a monetary union perhaps is not as large as it first seems. Central banking has a long history and although it has been confronted with many changes in the past, it has far from lost its importance, if anything rather the contrary. Basic functions,  7  For a recent study of business cycle synchronisation, see Kose, Otrok and Whiteman (2005). BIS Review 73/2006  7  such as aiding financial intermediation through large value payment systems and acting as a lender of last resort, will remain important in the future as well. Needless to say, it will be very interesting to follow the transformation of EAC in general and the role of the Bank of Uganda in particular. References Annett, A., (2006), “Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe’s Fiscal Framework”, IMF Working Paper, No 06/116. Baldwin, R., (2006), “In or Out: Does it Matter?
William C Dudley: US economic policy in a global context Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Foreign Policy Association Corporate Dinner, New York, 7 June 2011. *  *  *  It is a pleasure to have the opportunity to speak here this evening and I would like to thank the Foreign Policy Association for inviting me. The Association has served for decades as a catalyst for developing awareness and understanding of global issues and for providing nonpartisan forums for informed discussion. Your mission is clearly a worthy one – now more than ever. In this discussion I will highlight how the recent financial crisis and its aftermath have accelerated the shift in the relative importance of the so-called developed and emerging market economies. I will then discuss how the global economic system needs to adapt in light of the growing relative importance of the EMEs in the global economy. I will explore the implications of these changes for U.S. economic policy and I will also touch on some of the challenges the EMEs face as they seek to consolidate their gains and sustain their success. I will argue that the developed countries and the EMEs need to adjust in mutually supportive ways. In my view, the current relationship between the EMEs and the United States is not sustainable for either side.

According to the World Bank, 170 million people in the ten member states of ASEAN with mobile phones remain unbanked. Some 53 million people still receive agriculture payments in cash. Financial technology or FinTech is making significant headway in bringing these under-served markets into the formal financial economy. Example: Digital financial transactions have increased by 30% in Thailand from 2014 to 2017. The FinTech revolution in Southeast Asia is being driven by three forces. First, there is a thriving FinTech start-up scene in ASEAN. These start-ups are building large digital businesses and changing the face of financial services while doing so. Take for example Wing in Cambodia, Wave Money in Myanmar, Momo in Vietnam, and MatchMove in Singapore. They have quickly scaled by providing unbanked individuals with the means to store value and transact digitally. And by extending their services to SMEs, these FinTech firms are facilitating the digitalisation of entire supply chains. Second, the advent of pervasive e-commerce platforms has provided an Asian model for financial inclusion. These platforms rapidly develop a consumer base and offer a broad stack of services, expanding into areas such as payments and credit. E-commerce platforms are among the best-funded ASEAN businesses. Grab, Go-Jek, Carousell, and Lazada have together raised nearly $ billion in 2018. According to a study by Google and Temasek, e-commerce is projected to grow explosively in ASEAN, from $ billion in 2015 to $ billion in 2025.
The Central Bank will examine additional scenarios for possible developments in the balance of payments in coming years, and developments in market access in coming months will have a significant effect on the outlook. In spite of this proviso and the necessity of not presenting unrealistically pessimistic scenarios that could undermine confidence needlessly, this scenario does not go so far, and we must determine what we can do to prevent such an outcome. Economic policy and the structural reforms must ensure that Iceland’s competitive position does not deteriorate more than can be expected following a normal rise in the real exchange rate from historically low levels, given that we will have a current account surplus while we are working our way through the bulk of the debt. It is most important that public sector finances be well in surplus during this period and that attempts be made to ensure a higher level of national saving than prevailed in Iceland before the crisis. Furthermore, it is clear that the scope to use the current account surplus to release non-residents’ ISK assets will be extremely limited in coming years. How likely is it, then, that we can lift the capital controls in the next few years? Obviously, it would be much easier if new capital inflows were forthcoming, either through new foreign borrowing or through foreign direct investment. In addition, it is clear that no decisive steps can be taken to lift the controls before a suitable solution is found to the settlement of the failed banks’ estates.

That depends on who wants to buy them and is willing and able to bring in the necessary currency, which cannot come from export revenues or the Bank’s foreign exchange reserves. In lifting the capital controls, we are faced with the question of how far we are willing to go. Shall we return to the way things were before the crash? History shows that Iceland has generally done best when it has maintained open business ties with the rest of the world. Iceland is not alone in this regard, of course, as both history and economic theory have shown that international trade generally enhances well-being. This is also true of capital transactions. But it is also a fact that most severe financial crises in small, open economies like Iceland originate, at least in part, in excessively volatile capital flows to and from the country, which foster debt accumulation and asset bubbles during upswings and then shut down the mains during the downward cycle. Unrestricted capital flows are thus coupled not only with benefits but also with risk. This risk can be mitigated with sound economic policy and an appropriate regulatory and supervisory framework, but it will never disappear entirely. Consequently, there are a number of signs that, contrary to generally accepted ideas about free trade in goods and services, financial integration with the outside world can actually go too far. This is supported by studies indicating that there are “thresholds” in terms of benefits from financial integration and that form matters.
Second, there remains significant excess capacity in manufacturing across much of the world. In the 2/6  BIS central bankers' speeches  United States, for example, the manufacturing capacity utilization rate was only 76.4 percent in November, about 2 percentage points below its average since 1972. Third, for manufactured goods, there may be more scope for substituting capital for labor, and/or lowering labor costs by importing labor-intensive intermediate goods. To the extent that this margin of adjustment is available, it would tend to dampen the impact of higher wage costs on prices of manufactured goods. Finally, the so-called “Amazon” effect, which results in greater price transparency for buyers, may weigh disproportionately on goods prices. Although inflation remains somewhat below the FOMC’s 2 percent objective on a year-over-year basis, I still anticipate that it will stabilize around that level over the medium term. As I noted earlier, above-trend growth should tighten the labor market further, pushing up wage inflation and eventually services prices. In fact, we have already seen some increase in inflation in recent months. Over the three months ending with November, core personal consumption expenditure prices rose at a 1.8 percent annual rate, up from a corresponding rate of just 0.4 percent last May. The pronounced slowing of core inflation during the first half of 2017 was due, in part, to transitory factors, such as a sharp fall in prices for cellular phone services. Those influences have been temporarily depressing the year-over-year figures.

Philipp Hildebrand: Swiss monetary policy Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Annual Meeting of the IFZ (Institute for Financial Services Zug), Zug, 1 June 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Having successfully pursued a strategy of money supply targets for around 25 years, the Swiss National Bank (SNB) decided to adopt a fundamentally new monetary policy approach in 1999. Although it integrated some of the important elements of inflation targeting, it did so less strictly, thus allowing greater flexibility. Money stocks and credits continued to play a vital role in the new concept. Unlike the European Central Bank, the SNB chose not to make the monetary analysis a separate pillar in its concept. An important distinction to inflation targeting is that monetary policy focuses on maintaining price stability in the medium to long term, while inflation targeting is generally oriented towards short-term and, in some cases, variable inflation targets. The SNB's monetary policy uses an inflation forecast as a central indicator and sets its operational goal in the form of a target range for the three-month Libor. A monetary policy that is geared to the medium and long term affords leeway for a certain degree of stabilisation of the real economy.
And there is also now a clear fiscal policy framework to ensure that the public finances are in a sustainable state in the long run. The success of that approach can be seen in the remarkable degree of stability that the UK economy has achieved since the inflation target was adopted in October 1992. Over that period inflation has averaged 2.7%. And it has been more stable than in any period since monthly RPI figures were first collected in 1947. Output has grown at an average annual rate of 2.9%, well above the post-war average. Growth too has been more stable, and there have now been 31 consecutive quarters of expansion, the longest unbroken sequence since official records began. Nevertheless, while monetary stability may be a necessary condition for exchange rate stability, it is clearly not sufficient. The evidence is the sharp rise in sterling against the euro over the past three years. Sterling is now some 40% higher against the euro than in late 1996. This is not the direct result of UK monetary policy - changes in interest rate differentials account for only a small part of the 1  BIS Review 34/2000  appreciation against the euro, and sterling has hardly changed against the dollar over the past five years. Sterling’s strength is largely the result of continuing weakness in the euro. That does, however, create problems - for some of you, and for the MPC as well. To maintain stability the MPC has an inflation target of 2½%.

To meet the inflation target the MPC sets interest rates to keep nominal demand in line with supply at the target inflation rate. In that way it tries to maintain an overall balance in the economy. But sharp changes in either the exchange rate or the world economy - both of which we have seen over the past three years - mean that overall balance requires swings between external and domestic demand. The MPC can - and did - respond to external developments by changing interest rates so as to influence domestic demand to restore the overall balance. But in so doing the economic see-saw lurched with external demand falling and domestic demand rising. While the MPC can try to maintain stability in the economy as a whole it cannot prevent movements in the see-saw reflecting swings between external and domestic demand resulting from changes in the world economy. And lurches in this see-saw produce damage - as manufacturing and agricultural businesses know only too well, and as domestically-oriented businesses saw in the early 1990s. Of course, the UK is not alone in this experience. So can we learn from others? April is the month not just of showers; it is also the month of the Washington Spring meetings: the meetings of finance ministers and central bank governors from the one hundred and eighty-two member countries of the IMF and World Bank. Early tomorrow morning I shall leave Plymouth, rather as the Pilgrim Fathers, to travel to the New World to take part in those meetings.
This decision was also dictated by the need to counter harmful speculation at the time about the appropriate level of the exchange rate. Lessons learned One lesson that could indeed be drawn from Malta’s experience is that the discipline imposed by the currency peg was probably the factor that contributed most to the relatively smooth transition to euro area membership, not only in terms of the achievement of the exchange rate criterion, but more so because it helped to focus attention on macroeconomic and structural policies. There was, however, one factor that remained constant as the journey to the euro progressed. That was the small size of the economy and, thus, its vulnerability to shocks. This was compounded by the risk of a speculative attack of the currency, given the combination of still weak economic fundamentals and the dismantling of the capital controls regime which had protected the lira for decades. These realities made the transition from a basket peg to a full euro peg even more challenging. The potential exposure to capital outflows was also a source of preoccupation because the Bank was aware that the typical  6  4  Malta Enterprise. BIS Review 14/2008  interest-sensitive Maltese investor was likely to be attracted by the availability of a wide choice of financial products overseas offering attractive yields. Long before EU accession the Bank had anticipated this challenge by adopting a sequenced programme of capital account liberalisation to test investor reactions.

Philipp M Hildebrand: Monetary policy situation and economic prospects Summary of a speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Centre for Banking Studies, Lugano, 28 September 2004. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  In formulating its medium-term monetary policy, the Swiss National Bank (SNB) must take the uncertainty surrounding the development of the economic environment into consideration. The SNB believes that the economy is well on the road to recovery, both in Switzerland and abroad. For our country, it anticipates real GDP growth of close to 2% in 2004. Sustained growth is also expected for the coming years. Consequently, the utilisation of the economy’s production capacity will steadily improve, while unemployment will gradually decline. The improved utilisation rate will be accompanied by a rise in inflationary pressure in the medium term. This scenario could be revised, however, if new information were to come to light. The SNB will thus continue to monitor economic developments closely and will subsequently draw the necessary monetary policy conclusions. BIS Review 54/2004  1