samchain/econo-pairs-v1 huggingface dataset:
On his initiative, on December 19, 1991, the Government adopted a Decision which obligated the National Bank to start printing value coupons. This Decision, adopted in greatest secrecy, was a legal basis for all operational actions that allowed the new currency, the Denar, to be presented to the public on April 26, the following year, 1992. On this day, also on the initiative of the academician Kljusev the systemic laws were adopted, as well as the document on the Anti-inflationary program, which, unfortunately, did not survive the fall of his Expert Government. On this day, besides recollecting the past, we are called to look towards the future. Here we look at the importance of low inflationary expectations for the efficiency of the economy and the role of the National Bank in maintaining these expectations. In fact, academician Kljusev had devoted his entire scientific work to the issue of efficiency of economic policies. For the central bank, as well as for the commercial banks that the central bank closely cooperates with, basically there is only one true treasure on which the effectiveness of its policies is based and that is the confidence of the public. It is impossible to imagine a stable bank without having to imagine the confidence of citizens who are its customers. Also, it is impossible to imagine confidence in a central bank without simultaneously having confidence in its objectives.

If credit becomes cheaper and more widely available, thereby increasing the stock of money (a “money supply shock”), households and businesses will increase their spending on goods and services and on assets, both financial and real, and this will push up on inflation. But if they wish to hold more money in their portfolios – a “money demand shock” – then the extra money will have few, if any, implications for inflation. So why have money and credit been growing so rapidly? Given the pace of their expansion, it is likely that there has been both a demand and a supply shock. The supply shock is that banks have become increasingly willing to provide finance. Credit has been readily available and the spread between  2  BIS Review 63/2007  interest rates paid by households and businesses and interest rates available in the money market has fallen. That is one factor behind the rapid growth of business investment spending over the past year. In light of the greater availability of credit, any person or family that borrows at a variable rate should recognise that the interest rate they will pay in the future may vary. Obvious though the point may seem, it is unwise to borrow so much that the repayments are affordable only if interest rates remain at their initial levels. Indeed, wider and cheaper availability of credit was a “shock” that boosted spending, and so was a further reason why the Monetary Policy Committee raised interest rates over the past year.
These securities, such as mortgage-backed bonds, are linked to credits guaranteed by property assets. However, the fact that the external deficit is easier to finance within a monetary union should not conceal the factors of uncertainty derived from the losses in competitiveness and the growing indebtedness of households and firms underlying the deficit, because they may ultimately affect the sustainability of medium-term growth. In the short run, forecasts are for the continuity of the expansion. The central scenario for the coming quarters is set against the substantial buoyancy of the world economy, the smooth adjustment of monetary and financial conditions and the gradual re-absorption of the overvaluation of housing. And it continues to point to a gradual rebalancing of spending, with a slowdown in domestic demand and an improvement in the contribution of external demand. We are thus before a scenario that offers, in principle, sufficient room to face the vulnerabilities that have emerged and to address the measures needed to consolidate the continuity of the expansion. But there is a risk that the restructuring of spending will not be of sufficient intensity or that it will not increase the responsiveness of supply to the extent needed, meaning that the imbalances will continue to grow deeper, thereby raising the probability of a more marked adjustment in the medium run. Economic policy challenges Given the situation described, an economic policy commitment to rebalancing demand and, in particular, to containing domestic expenditure is particularly necessary.

The increases in official interest rates scarcely fed through in 2005 to longterm interest rates, which led to the forceful flattening of the yield curve, an unusual occurrence at this  BIS Review 60/2006  1  stage of the cycle, although the rise in long-term yields in the opening months of 2006 is contributing to lessening the scale of this discrepancy. Finally, the increase in household wealth, stemming from the rise in the value of financial and real-estate assets, eased the drag on real income arising from dearer energy products in the oil-importing countries. Yet there has been a significant contrast between this optimism on financial markets and the wariness of companies, mirrored by slack investment in the real sector which is particularly striking if regard is had to the favourable trend of corporate profits. Several explanations have been offered for the muted performance of business investment in recent years, such as the difficulties in valuing investment in intangible assets appropriately, over-investment in the second half of the nineties (which caused surplus capacity in recent years), the ongoing reduction in corporations' financial leverage, the uncertainty generated by globalisation and companies' caution following the recent changes in the legislative and accounting framework in the wake of the corporate scandals in some countries. Insofar as some of these factors are probably transitory, greater investment momentum may be expected in the coming years.
So there is evidence that at least some of the necessary structural adjustment has taken place, though in all likelihood it still has further to run. What sorts of policies would facilitate the required adjustment without relying on sustained weakness in the indebted countries? At Pittsburgh, in 2009, the G20 identified five ingredients. First, surplus countries should take steps to boost domestic demand. Second, deficit countries should implement credible strategies to support private savings and restore fiscal sustainability. Third, exchange rates need to be allowed to reflect underlying  6  See for instance: Broadbent (2012), Miles (2012) and Dale (2013). 4  BIS central bankers’ speeches  fundamentals. Fourth, financial regulation and supervision should be strengthened to prevent the re-emergence of financial sector excesses. Fifth, structural reforms should be pursued, not only to boost long-term growth but also potentially to boost demand in the short run. This sounds straightforward, but why has it in practice proved so difficult to achieve? First and foremost, the actors have not always shared the same diagnosis of the underlying problems. Second, in circumstances like the present, when there is still a significant margin of spare capacity in many economies, an expansion in activity in one country generates beneficial spillovers onto other countries (the opposite would be the case if there was excess demand and overheating). But policy makers typically do not take account of these spillovers when judging how much to stimulate their economies. Consequently uncoordinated decision-making can lead to inefficiently low demand.

The pre-crisis decade was generally one of steady growth and inflation close to the target, and thus few signs of overheating in the real economy. Domestic demand nevertheless consistently outstripped the supply of output, generating a small but persistent current account deficit, averaging around 2% of GDP. MPC members noted on several occasions that this would have to be corrected at some stage, and would most probably need to be accompanied by a lower sterling real effective exchange rate. 1 Such a rebalancing process appeared to have been set in train by the deterioration in the outlook and the rise in uncertainty associated with the financial crisis. Household spending collapsed, as the saving ratio rose from around 1-2% to around 7%, with much of the rise accounted for by the behaviour of highly indebted households (Chart 1); businesses' capital spending also fell sharply, though that is something we would like to have seen more of, rather than less. At the same time, sterling fell by a quarter. That should have given us a head start in crowding in net exports to replace the lost domestic demand. The performance of net exports has, however, been distinctly underwhelming, adding just 1½ percentage points to total growth since the start of the recession. That is not simply a reflection of the weakness in our export markets, as the weakness at home has depressed imports correspondingly. Once one controls for the changes in activity at home and abroad, net exports still look weak.
However, I would like to underline that the attractiveness exerted by advanced countries on our graduates and our specialized profiles is making our task even more complex, especially in recent years. At Bank Al-Maghrib, for example, we lost about 20 computer engineers in just 18 months. I think that this point also deserves to be discussed and debated at meetings such as this one. Thank you! 7

On the assumption that the three-month Libor remains unchanged at 0.75%, annual inflation is forecast to stand at 0.5% in 2006 and reach 1.4% in 2007. Inflation prospects for the medium term now look more positive than they did at the March assessment. A correction to the expansionary monetary policy pursued by the SNB for a long time now will be necessary if the economic outlook improves. Should the Swiss franc appreciate rapidly, the Swiss National Bank will respond appropriately. What were the most important factors that led to our decision to leave the three-month Libor rate unchanged? Before answering this question, I would like to briefly outline the situation we are facing. I will begin by presenting the economic environment, and then go on to describe the monetary situation. As far as economic activity is concerned, we have revised our evaluation downwards since the last monetary policy assessment. In the final quarter of 2004, the Swiss economy slipped slightly, accompanying a rise in the price of oil and a decline in the dollar in the period from October to December. Both of these factors also had an unfavourable impact on the European economy. Contrary to the expectations expressed at our last monetary policy assessment, economic activity in Switzerland remained restrained in the first quarter. Despite a slight increase in domestic demand, GDP stagnated compared with the previous quarter. This disappointing result was mainly attributable to export developments. Companies were faced with slack demand and consequently limited their volume of investment.
Caleb M Fundanga: Launch of Info-Zambia Bank student loan scheme Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the launch of the Indo-Zambia Bank Student Loan Scheme, Mulungushi University, Kabwe, 21 April 2009. *  *  *  HON. MINISTER OF EDUCATION, PROFESSOR GEOFFREY LUNGWANGWA, MP THE CHAIRMAN OF MULUNGUSHI UNIVERSITY COUNCIL, MR COSTAIN CHILALA THE VICE CHANCELLOR OF MULUNGUSHI UNIVERSITY, PROFESSOR VERNON CHINENE THE CHAIRPERSON OF INDO-ZAMBIA BANK LIMITED, MRS O MOYO THE MANAGING DIRECTOR OF INDO-ZAMBIA BANK LIMITED, MR S R SHUKLA MEMBERS OF STAFF OF MULUNGUSHI UNIVERSITY AND INDO-ZAMBIA BANK LIMITED MEMBERS OF THE PRESS INVITED GUESTS LADIES AND GENTLEMEN I am grateful to the Vice Chancellor of Mulungushi University, Professor Chinene, for extending an invitation to me to witness the Launch of the Student Loan Scheme by our Minister of Education Hon. Professor Lungwangwa. Chairperson, I am reliably informed that the Student Loan Scheme being launched today is the latest among the many product initiatives that Indo Zambia Bank Limited will be launching in the near future . The Student Loan Scheme represents a major shift from the traditional loan schemes that have for a long time characterised traditional banking models in Zambia. Chairperson, the Bank of Zambia supports the introduction of innovative products such as the Student Loan Scheme, a service that will allow parents and guardians who bank with Indo Zambia Bank Limited to access loans to meet University fees for their children at concessionary rates. Hon.

In the case of credit risk, models are built for particular portfolios;    Insurance models estimate overall capital requirements taking account of assumed diversification benefits across different risks whereas bank capital requirements are determined risk by risk and added together, with no diversification benefits across risks, although diversification is taken into account within risks;    Regulation determines or constrains more elements of bank than insurance models;    In banking regulation, the standardised approach is calibrated to give higher capital requirements than internal models for a typical bank whereas in insurance the two approaches are calibrated to the same confidence level; and    It is more straightforward for banking supervisors to top up capital requirements using so-called Pillar 2 of the bank capital framework. Once an internal model has been approved under Solvency II, supervisors have more limited scope to apply capital add-ons, which can only be temporary. I make no apology therefore for the exacting nature of our internal model approval and change processes for UK insurers. Models must meet the tests and standards set out in Solvency II. These are both quantitative – around calibration, statistical quality and profit and loss attribution – and qualitative – around independent validation, documentation, model governance and the use test. The PRA has approved 24 UK insurers to calculate capital requirements using a model, which is by some way the highest number by EU country. That gives us the advantage of peer comparison.
They only move the time-consistency issue one step back - the policy rule may be abandoned, the central banker fired, the contract reinterpreted or rewritten.3 The other approach says that real central bankers do not and need not worry about time-inconsistency; they “just do it”, (Bennett McCallum, 1995). Central bankers should simply resist the temptation to deviate from the time-inconsistent policy, and private agents will eventually come to accept that resolve. Attractive as such a solution may appear to central bankers, it fails to answer the challenge posed by the game-theoretic result of Kydland and Prescott. And it fails to explain why it is that some countries in some periods just do it and others do not. Central bankers who have the determination and strength of purpose to “take the punch bowl away just when the party is getting going”, in McChesney Martin’s memorable phrase, clearly have the “right stuff” - so why don’t they “just do it”? 4 A deeper explanation of how this problem can be overcome requires an analysis of what might be called the “technology of collective decisions”. Individual agents can make contracts because they believe that the legal system is external to both parties to the contract. But it is difficult to write contracts that commit future collective behaviour. Collectively, we can either meet our previous commitments or we can ignore them.

However, it was difficult to make any well-founded forecasts of the effect on the krona exchange rate, inter alia because the companies' strategy with regard to hedging of export income and equity are not strictly applied. So what has happened? It doesn't seem as though very much has happened. Companies can keep their accounts in euro now, if they wish. Some companies, mostly smaller ones, have chosen to do so. The changes with regard to investments of liquid funds that some believe they have observed are thus not based on a change in accounting currency. The fact that perceptions of the existence and degree of changes in behaviour differ may indicate that strategies differ between companies and over time. To summarise, there are many reasons why the euro will still only have a minor effect on the role of the krona in the Swedish economy after 1 January 2002. BIS Review 85/2001  5
At the same time, employment and labour force participation have increased significantly and unemployment rates have fallen to levels not seen for 25 years. This supports real disposable income and thus consumption growth, although purchasing power is being dampened by the impact of higher energy and food prices. The uncertainty surrounding this outlook for economic growth remains high, and downside risks prevail. In particular, risks relate to the potential for the financial market turbulence to have a more negative impact on the real economy than previously anticipated. Moreover, downside risks stem from the dampening impact on consumption and investment of further  BIS Review 57/2008  1  unanticipated increases in energy and food prices. Risks also arise from protectionist pressures and the possibility of disorderly developments owing to global imbalances. With regard to price developments, annual HICP inflation has remained above 3% for the past six months. According to Eurostat’s flash estimate, it was 3.3% in April 2008. This outturn confirms the ongoing strong short-term upward pressure on inflation, resulting largely from sharp increases in energy and food prices at the global level in recent months. Looking ahead, on the basis of current futures prices for these commodities, the annual HICP inflation rate is likely to remain significantly above 2% in the coming months, moderating only gradually over the course of 2008. Accordingly, we are currently experiencing a rather protracted period of high annual rates of inflation.

Against this background, we emphasise that the firm anchoring of medium to longer-term inflation expectations is of the highest priority to the Governing Council. We believe that the current monetary policy stance will contribute to achieving this objective. The Governing Council remains strongly committed to preventing second-round effects and the materialisation of upside risks to price stability over the medium term. We will continue to monitor very closely all developments over the coming weeks. Regarding fiscal policies, the latest forecast by the European Commission points to a rise in the euro area general government deficit ratio in 2008, followed by a further small increase in 2009. This deterioration in part reflects a less favourable economic environment and a likely reversal of windfall revenues accrued in past years. However, it also reflects a standstill in fiscal consolidation and new deficit-increasing measures in a number of countries with fiscal imbalances, including some with high deficits. For several countries, the attainment of the country-specific medium-term objectives by 2010 at the latest, which is the commitment made by euro area governments in Berlin in April 2007, is clearly at risk. In these countries, much more ambitious policies are imperative. For all countries, prudent fiscal policies would also help to counteract current inflationary pressures. At the current juncture, it is also important to reinforce the structural reform agenda, in particular with a view to fostering market integration and to reducing rigidities in product and labour markets.
A minimum requirement for central banks is that they don’t contribute themselves to exacerbating global warming. Instead, it is reasonable to expect that the activities of central banks are gradually adapted in line with international treaties such as the Paris Agreement.20 Second, central banks  14  This section is based on Olovsson (2020). See also Buchanan (1965), Böhringer et al. (2012) and Nordhaus (2015), who also advocate carbon tariffs. 16 An advantage of carbon taxes is their relative simplicity. If set at an appropriate level, the tax will cause individuals and companies to consider or internalise the cost of additional carbon emissions when they take economic decisions. Emission trading is the measure that has so far been implemented on a global level to reduce carbon emissions. It is currently applied within the EU’s Emissions Trading System. The basic idea is to limit total emissions by auctioning off emission rights to companies and other players. These rights can then be bought and sold by various market participants. It is important that measures to reduce carbon emissions are introduced at the global level. Otherwise, ambitious measures in one region only risk leading to companies moving production to other less ambitious regions and thus no effect on emissions materialising. One way of reducing this risk is to introduce carbon tariffs on imported goods. 17 In the early-1990s, Sweden introduced a carbon tax that has formed the basis of Swedish climate policy.

This is particularly important as it may take some time before research findings relevant from a central bank perspective are produced and published by university researchers. Contributing to data collection is also an important piece of the puzzle when building preparedness and resilience to combat climate-related risks. Chart 1. Loss of consumption relative to an optimum policy Per cent 25  25  20  20  15  15  10  10  5  5  0  0 2010  2050  2090  High tax when a low tax is correct  2130  2170  Low tax when a high tax is correct  21  The Riksbank has a responsibility to follow and analyse financial stability, but is not responsible for regulation of the financial sector the same way as, for example, the ECB in the euro area and the Bank of England in the United Kingdom. In Sweden, Finansinspektionen (Swedish Financial Supervisory Authority) has the responsibility for supervision and regulation of the financial sector – both individual financial institutions and systemically important, overall macroprudential policy. Representatives of the Riksbank, together with representatives of the Government and/or Finansinspektionen, sit on many international committees in which regulation of the financial sector is discussed. 10 [18]  Source: Hassler et al. (2018)  Today, the Riksbank, together with other institutions, contributes actively to research into climate change and has done so since 2013. The research has received international attention and been published in several of the best scientific journals.