samchain/econo-pairs-v1 huggingface dataset:
In the view of the Governing Council, the risks to the economic outlook are balanced. On the positive side, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken. Confidence may also improve more quickly than currently expected. On the other hand, concerns remain relating to a stronger or more protracted negative feedback loop between the real economy and the turmoil in financial markets, further increases in oil and other commodity prices, the intensification of protectionist pressures, increasingly unfavourable labour markets and, lastly, adverse developments in the world economy stemming from a disorderly correction of global imbalances. With regard to price developments, annual HICP inflation was, according to Eurostat’s flash estimate, -0.1% in June, compared with 0.0% in May. As explained on previous occasions,  BIS Review 83/2009  1  the further decline in annual rates of inflation was anticipated and reflects primarily base effects resulting from past sharp swings in global commodity prices. Looking ahead, owing to these base effects, annual inflation rates are projected to remain temporarily in negative territory over the coming months, before turning positive again. Such short-term movements are not relevant from a monetary policy perspective. Consistent with available forecasts and projections, looking further ahead, inflation is expected to remain in positive territory, while price and cost developments are expected to remain dampened in the wake of ongoing sluggish demand in the euro area and elsewhere.

The unemployment rate fell from 12.2% to 11.5% from the end of one year to the next. Against the backdrop of quickening growth, inflation was brought further under control. The year-onyear rise in consumer prices stood at 0.3% in December 1998, after 1.1% in 1997, and thus met the objective of less than 2% set by the Monetary Policy Council. This was the lowest rate of inflation recorded since 1954. One of the main factors in the slowdown in price rises was the fall in the price of oil and other commodities. “Underlying” inflation, which reflects the fundamental trends in the economy, showed a slightly more sustained progression than the consumer price index. According to France’s National Institute of Statistics and Economic Studies, INSEE, it posted a year-on-year rise of 1.1% in December 1998, the same as in December 1997. According to the harmonized index of consumer prices (HICP), which is the measure of inflation in the euro area, France is one of the three best-performing countries in terms of inflation: French inflation stood at 0.7% as an annual average in 1998, compared with 1.1% for the euro area. In the course of 1998, the franc remained constantly above its central rates vis-à-vis the other most credible currencies of the European Exchange Rate Mechanism. The goal of a stable external value for the franc—which was the external intermediate objective of French monetary policy over the last five years—was thus achieved. This went hand in hand with the maintenance of the competitiveness of the French economy.
Having said that, it does not mean we will abandon our efforts in rebalancing our growth engine more towards domestic demand going forward. This can also be done as the balance sheet of the private sector is still in good shape. Now I would like to turn to our second challenge: As the world economic recovery begins to find more solid footing, the exit from the unconventional measures and the return of monetary policy towards the normal level becomes an increasingly important issue. Israel, Australia and Norway are already leading the way. However, it is a great challenge for policymakers to exercise an exit strategy with appropriate pace and time so as to ensure that the exit does not create unwarranted impacts on the economic recovery. On the one hand, a premature exit can derail the recovery. On the other, a delayed exit can lead to rising inflation and asset price bubbles. On top of this, the coordination of exit policy among countries is also important. For instance, the removal of deposit guarantees should be simultaneously implemented in order to avoid a disruption which may be caused by the shifting of deposits from a country that has lifted the guarantee to another country that has not. On balance, it is expected that emerging economies including Asia are likely to recover first as our economic fundaments remain sound and the banking system is in a position to support economic recovery.

Strategic priorities to further develop the financial advisory industry The Bank has identified a number of strategic priorities to further develop the full potential of the financial advisory industry in delivering better outcomes to consumers and increasing the level of insurance penetration in Malaysia. I should say that we benefitted significantly from our engagements with the industry on the direction that we intend to take and the key issues that need to be addressed moving forward. Today, let me mention four key priorities. Our first priority is to ensure that financial advisers are highly competent and professional when they provide advice. We understand from our engagements with AFA that recruiting the right talent continues to be a major challenge given that financial advisory firms are competing with larger financial institutions for a limited pool of qualified individuals. The Bank will continue to work in close collaboration with AFA to increase the talent pool. This includes reviewing on a regular basis, the programmes and qualifications that meet the minimum standards for financial advisors and working with academia, training providers and accreditation bodies to broaden the qualifications recognized without compromising on quality. There is also a need to lift the competency requirements for financial advisers. The current emphasis has been largely on ensuring that financial advisers have sound product knowledge and the core competencies to understand and analyse their client’s needs.
As a result, policies have gained credibility and the inflation target has become a more credible nominal anchor for economic agents. This in turn has strengthened the disinflation policy and ensured its continuity. As another development, the Turkish economy has been enjoying high rates of growth for three consecutive years in the falling inflation environment. The GNP growth rate was 9.9 percent in 2004. Accordingly, the real growth rate compared to 2001 was 25.5 percent. 6  BIS Review 38/2005  However, even more important than achieving high growth rates is that dynamics of growth in the Turkish economy are now changing. Now, growth is mainly driven by the productivity increase, comes from the private sector and increase in exports. This provides confidence regarding achieving sustainable growth rates in the future. I want to emphasize that, not only recent developments in macroeconomic fundamentals but also the commitment to prudent policies in the medium-term economic program, prospects of EU membership and the new standby agreement with the IMF help the Turkish economy to operate in an equilibrium of good expectations. Dear Participants, I want to mention that the Central Bank’s commitment to start full fledged inflation targeting in 2006 will deliver extra confidence to economic agents in terms of prudent policies. The full fledged inflation targeting regime will bring more transparency to the actions of the Bank and also enhance the communication policy that the Central Bank put at the center of its policies since the 2001 crisis.

In fact, central banks’ role in times of financial instability is not a new issue for the economic literature. The term “lender of last resort” originated in the writing of Sir Francis Baring in 1797. In his book, “Observations on the Establishment of the Bank of England”, Sir Baring referred to the Bank of  3  Aninat, Eduardo. (2003). Foreword. Challenges to Central Banking from Globalized Financial Systems. IMF. 4  Schuerman T. (2004). Why Were Banks Better off in the 2001 Recession? Current Issues in Economics and Finance. FEDNY. Vol. 10. No: 1. 2  BIS Review 38/2005  England as “the dernier resort” from which all banks could obtain liquidity in times of crises. But the concept of lender of last resort had been described and used in a more comprehensive manner by both Henry Thornton in 1802 and Walter Bagehot in 1873. Distinguished Guests, I will add a point to the discussion that the benefit of having a strong financial system in an economy eliminates the ground for conflict in policies between financial stability and price stability. Since a strong financial system increases the efficiency of monetary policy on one side, it also provides elasticity for the economy to overcome external shocks easier on another. On the other hand, it is almost impossible to attain financial stability in the long run without maintaining price stability. Furthermore, price stability attained through credible monetary policies is an advantage in times of increasing uncertainty in the financial system and financial imbalances.
All stakeholders stand to benefit from a rich database as credit providers will have a good basis to adequately assess the credit worthiness of their existing and potential customers with a view to providing properly priced products and services. Chairperson, the Government has also created the Citizens Economic Empowerment Commission (CEEC) in order to enable small businesses with viable investment projects have access to finance. I would personally like to see an increased flow of credit to our SMEs which, as many of you know, have been routinely found to be a major source of growth in any market economy. This is more so as the larger part of our productive population, particularly those in the informal sector, is in fact employed in one way or the other in these SMEs. It is therefore strategic for us in the financial advisory arena to support our brothers and sisters who run these SMEs. By ensuring that credit flows in that direction, we can then be assured that more and more of our people who are engaged in SMEs will certainly have access to financial services like everybody else. In the process, growth generated from the SMEs can sustainably offer the much needed respite from mineral dependency. Ladies and Gentlemen, for Government initiatives to be effective there is need to integrate them into the mainstream financial system. In this regard, financial reforms must continue to evolve and be dynamic in order to address the main challenges still facing the Zambian financial markets.

The sheer size of the economy in the monetary union will encourage the use of the Euro instead of the US dollar in trade and foreign exchange transactions. This process would further be accelerated by the fact that the use of a single currency will remove the not negligible cost of transactions. According to a study conducted by the IFO Institute in Munich, “the transaction costs for the inter-European currency management may be in the order of nearly 60 billion ECUs, or nearly 1% the GNP of the European Union”. Also it is likely that central banks will use the Euro rather than the US dollar in foreign exchange interventions. In turn, this will encourage non-EU central banks to switch an increasing proportion of their reserves into the Euro. This process will take time and the Euro will not usurp the role of the US dollar in the short term. However, the trend is likely to be persistent and eventually the current importance of the US dollar in the foreign exchange markets should be replaced by the joint importance of the US dollar and the Euro. One factor which will affect the speed of this change is the outlook for the Euro based on the fundamentals of the monetary policy of the European Central Bank (ECB). Moreover, the creation of a monetary union will prevent exchange rate volatility within the united Europe, the reason being that the Euro area as a whole will be much less dependent on foreign trade.
One issue that has led to questions and been discussed considerably is that some leading politicians have actively involved themselves in the debate and on repeated occasions expressed very specific requirements for immediate interest rate cuts and in one case even a change in our meeting schedule. The question is whether this is appropriate or even wise. This is not a new issue, and it is one I have faced on numerous occasions since I began work at the Riksbank. My point of view has always been that we have a statutory task to perform. We shall perform this independently and to the best of our abilities. The law is crystal clear; we are not allowed to accept political instructions or even advice. Moreover, even before the new legislation was in place we had chosen to design a clear framework for our work. Our target of maintaining price stability has been specified as an inflation rate of 2 per cent. We have also “tied” our actions in other ways, such as publishing forecasts and systematically following particular working methods. This enables those outside of the bank to assess our actions and motives and thereby to be sure that we are not taking  BIS Review 9/2004  9  account of inappropriate considerations. Given this, over the years I have had a fairly relaxed attitude to politicians' interference in the general debate. However, this issue has further implications than such.

Meanwhile, productivity growth has continued to be higher than expected and we believe that it may rise even further in the near future. Inflation has also been a little lower than anticipated. We are expecting a low underlying inflationary pressure in the short term, but this will probably increase as economic activity picks up. However, import prices are very important to our assessment of future inflation. These have had a significantly subduing effect in recent times, but an upward turn appears probable over the coming year. All in all, our assessment is that inflation will begin to rise later this spring and gradually approach our target level two years ahead. However, we do not believe that this upturn will be particularly dramatic. Let me emphasise that the changes that have occurred since our December meeting are not particularly great. They mainly entail some signs that domestic cost pressure could be lower than anticipated. As early as December we made some adjustments to our estimates in this respect, but the signs were fairly new then and a majority of the Executive Board preferred to await further information that would make the picture clearer. Given this, the assessment was that inflation would be slightly lower throughout the forecast period than was assumed in December; a conclusion that was not particularly sensitive to the choice of  BIS Review 9/2004  5  inflation measure. The Executive Board of the Riksbank therefore decided to cut the repo rate by 0.25 percentage points.
For example, as many as 56 finance companies were closed down permanently while others, as well as the weak banks, were taken over by the authorities or consolidated. Businesses caught short by the depreciation of the currency or the austere belt tightening environment which lifted interest rates to historically high levels, had to be closed down or consolidated. It became of utmost urgency to improve confidence, strengthen the operations of financial institutions and enable them to improve and resume their intermediation role. In the view of the Bank of Thailand, the only way to bring about sustained recovery of the economy which was affected by the liquidity crunch situation, and by the concern over counterparty credit risks in the midst of the crisis, was to tackle head-on the issue of non-performing loans. In June 1998, the Bank of Thailand, in cooperation with five associations, namely, Thai Bankers’ Association, Foreign Banks’ Association, Association of Finance Companies, Board of Trade, and Federation of Thai Industries, set up the Corporate Debt Restructuring Advisory Committee (CDRAC). This was aimed to oversee and facilitate the out-of-court debt restructuring process. Its mandate was to help push ahead complicated debt restructuring cases through a framework of negotiation. The Committee also pushed through many initiatives to eliminate legal and tax obstacles to debt restructuring. Consequently, NPLs in the financial system have fallen progressively from a peak of 47% of total loans in May 1999, to the present level of about 31% of total loans.

Tanya Sirivedhin: New challenges for finance and capital markets  Speech by Ms Tanya Sirivedhin, Deputy Governor of the Bank of Thailand, at the Conference on “Thailand-Finance and Capital Markets”, held in Bangkok, on 28 September 2000. *  *  *  Today’s conference is very timely, in view of the increasing role that finance and capital markets are likely to play in the future Thai financial scene. I have identified several aspects of the challenges of “Finance and Capital Markets” which I would like to share with this audience. I hope that the open discussion of these challenges will be an important input into the work of the Thai authorities, and what we envisage to be the vision for our industry. I shall frame the challenges in three dimensions: First, the challenges from rebuilding and strengthening the business and financial industry. Second, the challenges from the adoption of best international practices. Third, the challenges from the race to catch up with the new technological frontier of e-commerce and electronic trading. Rebuilding and strengthening the financial industry The 1997 economic and financial crisis brought to light many weaknesses in Thailand’s macroeconomic and financial management. In its aftermath, measures were undertaken speedily to shore up the currency and to restore confidence in the viability and sustainability of firms and businesses, both in the financial and non-financial industry. Through the implementation of these measures, there were inevitably many casualties.
Second, the integration of retail payment infrastructures is a more complex issue. Large value payment infrastructures handle only one type of payment instrument, the fund credit transfer, whereas the diversity of retail payment instruments makes the integration of national retail infrastructures more difficult. In addition, the transition costs are significant and the coordination problems to be solved are important. 3. The integration of retail payment infrastructures has become a priority on the agenda of the Eurosystem  It is particularly important that the European banking community now focuses on the retail payment issue and takes up in particular the challenge of creating a fully integrated retail payment infrastructure. The stake is obvious - the success of the SEPA. Tools to build a SEPA for infrastructures are known by all of us, but I would like to mention them briefly: it deals with enforcing standardisation and interoperability between systems on one side, with ensuring equal access of financial intermediaries without considering national locations on the other side. The EPC expressed its commitment to deliver two pan-European payment schemes - one for credit transfers and one for direct debits- and to develop a framework for cards that will be available for clients by 2008. Furthermore, the EPC expects that “a critical mass of transactions will naturally migrate to these payment instruments by 2010 such that SEPA will be irreversible through the operation of market forces and network effects”.

In particular, I will focus on what has already been done in this area and on what remains to be done. I will start by underlining the importance, for the European financial integration, of the development of efficient and safe payment infrastructures. Then, I will assess progress made in this field since the launch of the euro. I should mention immediately that my assessment is mixed. On the one hand, I consider that the situation is favourable for large-value payment systems. On the other hand, I can’t yet make the same positive assessment concerning retail payment systems. As a consequence, I will end my presentation by elaborating on the further developments needed to strengthen the integration of retail payments. 1. Payment infrastructures are a necessary driver for financial integration  Payment infrastructures cover all procedures and systems used by financial intermediaries to exchange payment orders issued by economic agents. Accordingly, they play a fundamental role for the smooth functioning of the economy as a whole. Indeed, provided that they allow financial transfers to take place between economic agents in an efficient and safe way, payment infrastructures are a key support to one of the core functions of money, namely money as a means of exchange. In the EU, infrastructures processing payments in euro consist in a number of arrangements, which are of different nature. For example, the exchange of payment orders in euro between financial intermediaries can be handled within multilateral systems or within the framework of correspondent banking bilateral arrangements.
And the closure of the steelworks down the road a little over a year ago was a further blow to Teesside, with the loss of 2,200 jobs. 1  Yet it is not all doom and gloom. There are more people in work in the North-East today than at any time in its history. Over 48,000 more people have found jobs over the past 12 months. And the North-East alone has contributed 20% towards the overall fall in national unemployment over the last year. Or, if you like, the increase in employment over the last year is 7 times that at Nissan’s Sunderland plant alone. Despite the media headlines, the North-East has been one of the most dynamic areas of job creation in the country recently. Underpinning this above-average jobs performance has been above-average productivity growth in the region. So it is particularly appropriate to be here today at the Materials Processing Institute, which has been a global centre for research on the iron and steel industry since 1945. The Institute has contributed importantly to Teesside having a high concentration of high value-added industries, such as chemicals and processing, which have boosted jobs and productivity in the region. Today, I want today to discuss the economy, at both a national and regional level. I want to discuss what monetary policy can and, as importantly, cannot do to support the economy, nationally and regionally.

This is currently around 12% lower than immediately prior to the EU referendum. Indeed, uncertainty about the outcome had already caused the exchange rate to depreciate ahead of the vote, such that it is now 17% lower than a year ago. The Bank’s contacts in financial markets attribute this fall in sterling to expectations that the UK’s future trading arrangements, and hence income-earning capacity, will be materially less favourable than at present. Whatever the precise explanation for sterling’s fall, its near-term impact on inflation and growth is likely to be significant. It will provide some support for net exports in the short-term. But it will also cause a sharp rise in import prices, and in time consumer prices, over the course of the next few years. That will in turn tend to depress inflation-adjusted household incomes, and hence consumer spending, over this period. It is unclear at present how the disconnect between the relative optimism of households and some companies, on the one hand, and the relative pessimism of financial market players and the other half of companies, on the other, will be reconciled. Is this a case of skittish financial market players over-sensitive to economic risks that may never materialise? Or sluggish consumers insensitive to the weaker economic prospects that lie ahead? Only time will tell. In the meantime, however, the MPC needs to form its own judgement on prospects for inflation and output. These were set out in the November Inflation Report.