samchain/econo-pairs-v1 huggingface dataset:
For a couple of decades we had failed to keep price and wage increases in check. However, a fixed exchange rate relationship is not, of course, compatible with an inflation rate that systematically exceeds that in the country to which the exchange rate is tied – sooner or later the exchange rate relationship must collapse. The rapid increases in wages and prices also repeatedly came into collision with the fixed exchange rate and the result was that the Swedish currency was devaluated on several occasions from the mid-1970s onwards. The economy was thus characterised by "boom-bust-cycles” with alternate strong acceleration and sudden braking. However, the fact that the fixed exchange rate did not work as a nominal anchor in Sweden does not mean that it could not function well in other countries; it has unquestionably done so in many cases. So let me therefore move on and mention some general advantages and disadvantages of the two methods 3 . 2  See Easterly, W. and S. Fischer, (2001), “Inflation and the Poor”, Journal of Money, Credit, and Banking 33, 2 (part 1), 160178. For a more detailed account of the advantages of low, stable inflation, see for instance King, M., (2002), ”The Inflation Target Ten Years On”, Speech at the London School of Economics, November 19. 3  A more detailed discussion of the advantages and disadvantages of these and other monetary policy regimes can be found in, for instance, Mishkin, F.S., (1999), ”International Experiences with Different Monetary Policy Regimes”, Journal of Monetary Economics 43, 579-605.

Inflation targeting is thus much more demanding than a fixed exchange rate regime with regard to the central bank’s analytical work and its ability to communicate its policy. Whether this is something that should be regarded as a disadvantage or not is of course a question of judgement. For the Riksbank, the transition to inflation targeting heralded the start of a fairly comprehensive increase in competence in the field of economics. The number of PhD economists at the Riksbank has risen sharply in recent years and our research in areas related to monetary policy has expanded considerably. Financial stability Let me now move on to the other central component of an efficient payment system. This concerns the stability in the financial system; particularly in the financial institutions that supply payment services, i.e. primarily the banks. Financial stability is currently regarded, parallel to the price stability target, as the main task of a modern central bank. The financial system has essentially three main tasks: converting savings into financing, managing risk and providing efficient channels of payment. Let me give a basic example. A bank receives savings from households which it then lends to other households or to companies that need to invest. Banks are specialists at valuing, monitoring and managing credit risks in the households and companies to which they lend.
The worst was the world recession of 2009, when the floating exchange rate policy allowed accommodating the sharp changes in the external scenario, both via the depreciation of the peso and an active monetary policy to stabilize demand. In turn, the creation of instruments designed to shield the economy from short-run fluctuations in this variable, permits to bound its effects on hedged agents. Certainly more can be achieved in this sense, but there have been important advances. Still, the Central Bank has always reserved the right to intervene the forex market. We have done it four times since 1999. However, this type of measures, which are used only exceptionally, must be based on solid grounds. In the past, these interventions have been justified by the Central Bank’s international liquidity position and by obvious and persistent deviations of the real exchange rate from its medium- to long-term fundamentals. In the present circumstances, it is not evident that these criteria apply. In the first place, it is important to note that the current level of the real exchange rate, while low compared to some months ago and also with respect to the average of the last fifteen to twenty years, is within the range believed to reflect its underlying fundamentals. It is certainly in the lower part of the range, but still consistent with its long-term fundamentals (figure i). As I said, the elements behind the peso appreciation are manifold. On one hand there is the favorable level of our terms of trade.

Zamani Abdul Ghani: The SME sector in Malaysia Speech by Mr Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at the Signing of Strategic Alliance Agreement between Credit Guarantee Corporation Malaysia Berhad (CGC) and Dun and Bradstreet (D&B) Malaysia Sdn Bhd, Kuala Lumpur, 3 July 2007. *  *  *  Yang Berbahagia Datuk Wan Azhar Wan Ahmad Chief Executive Officer Credit Guarantee Corporation Malaysia Berhad Mr. William Lim Wah Liang Group Executive Director Dun & Bradstreet (D&B) Malaysia and Singapore Distinguished guests, Members of the media, Ladies and Gentlemen, Assalammualaikum w.b.t. and Good Morning It gives me great pleasure to be here with you this morning to officiate and witness yet another milestone of progress for the Credit Guarantee Corporation Malaysia Berhad. I would also like to take this opportunity to thank both CGC and Dun & Bradstreet Malaysia Sdn. Bhd. for the invitation to be a part of this significant occasion. The forging of this strategic alliance between CGC and D&B is indeed timely. In the long run, we believe this initiative would bring much benefit to the financial sector and contribute greatly towards the development of the SME sector, especially in enhancing SMEs' access to financing as well as market penetration and awareness on the importance of SMEs. The SME sector has been and shall remain one of the key drivers of the nation's economic growth.
The financial system is built on a fundamental (and ever-present) mismatch. Savers want access to their money instantly, if necessary. But borrowers are usually unable to give it to them anything like as quickly. BIS Review 142/2007  1  The banks have traditionally bridged that gap. But the only way they can do so is to borrow short and lend long. This mismatch makes them vulnerable. That is why governments have imposed regulations on the banks, requiring them to hold reserves against emergency. But if there is a complete loss of confidence among depositors, there is really not much an individual bank can do. The central bank is usually obliged to help. Modern innovations in the financial system have seen banks, rather than holding on to the loans that they have made, parcelled them up and sold them on. The aim was to disperse risk; in the case of default, it was better for a lot of investors to lose a little than for a few banks to lose a lot. However, all the clever types of “securitization and structured products” have not eliminated the fundamental mismatch. Someone still has to borrow short and lend long. Northern Rock, the stricken British bank in recent weeks, is a case in point. In relation to this case, I just want to paraphrase an interesting article in the latest publication of The Economist headed “A generation has prospered from the wholesale transfer of risk through securitization. Now it is paying the price”.

This implies that sooner or later, if nothing were done, the rapid growth at present would lead to overheating and an acceleration of inflation. One factor behind the current trend has been monetary policy’s stimulatory direction ever since the repo rate cuts that were initiated in 1998. This illustrates that over a complete business cycle, the repo rate of 2.90% that applied up to last November is too low. GDP growth at the current rate of 3.5-4% implies an expansion of demand that clearly exceeds the rate of 2-2.5% that the economy can cope with in the longer run. It is only feasible in a limited, transitional period, that is, for as long as there is a supply of labour for the available jobs. The repo rate hike may not suffice; inflation prospects set the pace As monetary policy works rather like the helm of an oil tanker - it takes rather a long time to shift the economy onto a new course - it was necessary to make the adjustment to a more neutral monetary stance. Thus, GDP growth will continue at a higher rate for some time to come and then, after perhaps one to two years, successively slacken towards the economy’s long-term potential. The task the Riksbank is endeavouring to perform is to achieve an economic transition from a fairly normal upward phase to a growth trend that is more sustainable. This task, which is not simple, follows implicitly from our statutory function of “maintaining price stability”.
Javier Aríztegui: Reform of the banking system Speech by Mr Javier Aríztegui, Deputy Governor of the Bank of Spain, at the 5th Conference for financial professionals, Barcelona, 26 November 2010. *  *  *  Good morning. Firstly, I would like to thank the organisers for inviting me to participate in this forum. In view of the programme and the participants, I am sure that this is a good opportunity to debate the challenges facing the Spanish banking system and what the future holds for it. I shall broach the subject of the transformations currently taking place at banks in two parts. The first part will describe developments in our banking sector since summer 2007 and the second will look in greater depth at the aspects I consider essential for assuring the progress which has already been achieved. At times like the present, when international financial markets are showing their aversion to risk and their discomfort with banking systems that are highly reliant on external financing, it is vital to consolidate this progress and to continue using transparency as the main means of showing investors the soundness of our banking system. From summer 2007 to date The crisis which erupted in summer 2007 has gone through various phases. At the risk of over-simplifying matters, I shall split it into three stages. The first phase was characterised by a widespread loss of confidence: the complex structured products created in previous years came to be considered “toxic”.

2  BIS central bankers’ speeches  Nevertheless, contribution of net foreign demand to the economic growth of the third quarter is considered to be lower compared with the first half of the year. Annual improvement of trade deficit by 10.7% in the third quarter was lower than the one recorded in the first two quarters of 2010. Furthermore, trade of goods in the first two months of the fourth quarter proves a lower contribution of the external economy for the last quarter of 2010. The growing tendency of imports and an expected slowdown of exports growth may halt the process of correcting foreign trade balance and reduce its influence on the economic growth for 2011. In the aspects of macroeconomic policies, these developments suggest that strong stimulating policies for the economy may be buffered by a rapid increase in imports that accompanies the increase in domestic demand. In the structural aspect, these developments reiterate the need to continue with structural reforms, which should orientate the Albanian economy towards a more stable development model and a higher competitiveness in global markets. Among other things, these reforms, should aim at establishing a favourable climate to attract stable capital flows as in foreign direct investments or long-term capital inflow. A further increase of aggregate demand enabled the Albanian economy to move closer to its producing potential, yet remaining clearly under-utilised. Consequently, decreasing pressures on inflation continued to be present even during the second half of the year.
A growing middle class and rising affluence will underpin a steady increase in insurance penetration rates. Continued industrialisation, growing trade activities, and infrastructure development will mean greater demand for insurance solutions to mitigate a variety of risks. Over the next decade, insurance business in Asia is projected to grow at about 8% per annum. By 2020, Asia is likely to account for almost 40% of the global market. It is vital that insurers seeking to expand in Asia have a deep understanding of Asia’s risk landscape. Aggregate exposures have grown steadily in Asia, due to rapid urbanisation and economic growth over the last two decades. Asia’s strong record of development means that we have more to lose from unforeseen calamities. Take for example the spate of natural calamities in Asia in 2011. The three costliest events – the Tohoku earthquake and tsunami, Thai floods and New Zealand earthquake – caused a combined insured loss of almost $ billion. The scale of these losses was unexpected. Thailand had not even been viewed as a catastrophe risk zone, and had in fact been used to diversify against catastrophe risks. These events are a timely reminder to the industry to constantly stay ahead of the risk management curve. BIS central bankers’ speeches  1  3 + One strategy I understand that Allianz embraces a “3+One” strategy to achieve sustainable growth. In the spirit of this very happy occasion, allow me to adapt your framework to illustrate its relevance to Singapore’s insurance industry as a whole. One, Capacity.

It can typically run into hundreds of pages, with detailed descriptions about the company’s business operations, its competitive environment, governance practices, and risk exposures, not to mention a full set of financial statements. Most retail investors cannot easily digest all this information. But the scrutiny of the prospectus by analysts and institutional investors helps to bring to light any significant weakness in the company. Having said that, I must acknowledge that greater disclosure does not always improve our understanding of investment products. While all material and relevant information must be disclosed, there is a tendency for disclosure to be voluminous and legalistic – often made for the purpose of limiting legal liability rather than facilitating understanding by retail investors. MAS therefore seeks to ensure that information disclosed is not only adequate but also transparent. Transparency MAS has sharpened the focus on providing investors information in a clear and concise manner to aid understanding. Earlier this year, we introduced a new regulatory requirement for a Product Highlights Sheet to accompany offers of investment products that come with prospectuses. Its purpose is to convey key risks and product information in plain language and in a simple question-and-answer format. Let me give an example. In one recent prospectus, the right of the investors to cancel their subscription within seven days was spelled out in two rather technical paragraphs using a total of 170 words. In the Product Highlights Sheet, the same point was made in two simple sentences.
Determined efforts must be made to streamline bureaucratic procedures, eliminate outdated regulations and generally reduce the cost of engaging in any economic activity. The Better Regulation Unit in the Office of the Prime Minister must meet the expectations its creation has raised. Failure to do so risks compromising all the efforts being undertaken at both the macro and microeconomic levels to create a modern, dynamic economy. At the national level, moreover, we need to understand that the simultaneous pursuit of economic growth and a high degree of social protection can only be achieved by making our product and labour markets more flexible; by investing more in people, refining their skills and helping them into work, while introducing an obligation to take up jobs; and by giving more importance to developing our scientific and technological base. We do not need to look far to see how this can be done. Faced with high labour costs in the late 1990s, German companies started restructuring and downsizing. The government meanwhile introduced social security reforms aimed at making the welfare state less expensive, as well as labour market reforms that created incentives for the jobless to work. An awareness developed that the solution to chronic deficits and unemployment could no longer be to cut public investments. As a result, Germany’s unit labour costs have fallen by 12 per cent since 1999 against those of France.

What is happening is that people who use the scheme are getting a free ride at the expense of those who do not use it. Had the latter been consulted, they might well have preferred to see their taxes put to a different use. The other example comes from New York. Defending his proposal to introduce a congestion charge for vehicles entering Manhattan, Mayor Bloomberg is reported to have said that the question was not whether people wanted to pay, but how they wanted to pay: whether through a higher incidence of respiratory and other diseases and increased health care costs, or by reducing the number of polluting vehicles in the city and using the money collected through the charge to improve public transport. The Central Bank of Malta raised its central intervention rate twice last year and again in January. Wasn’t this risky for an economy finally showing growth? The primary objective of the Bank’s monetary policy is price stability. As is typical for small, open economies, however, the Bank does not target inflation directly. Instead, the Bank pursues this objective by using the exchange rate as its intermediate target and the level of the external reserves as its operational target. In the absence of capital controls, interest rates on the Maltese lira are inevitably influenced by those offered by the currency to which it is pegged, the euro.
Josef Bonnici: The changing nature of economic and financial governance following the euro area crisis Introductory remarks by Professor Josef Bonnici, Governor of the Central Bank of Malta, at the Malta Financial Services Authority, Attard, 17 January 2013. *  *  *  The success of the European monetary union was always contingent on three considerations. The first requirement is the maintenance of fiscal discipline; the second is effective financial regulation and the third condition is the management and minimization of macroeconomic imbalances. In reality, these requirements were often not met. In fact, there was a general lack of awareness of their importance. For the past several years, the headlines have been dominated by the ramifications of the European crisis, which was first manifested in the banking system and then in sovereign debt markets, and subsequently in the economic slowdown and related problems that followed the introduction of fiscal consolidation. The European Central Bank has engaged in a wide range of policy measures that seek to expand liquidity and restore normal conditions in the banking sector and in the financial markets. These monetary policy measures include conventional or standard measures, which have reduced policy rates to very low levels. In addition the ECB has adopted various non-standard measures, which have included long term refinancing operations that inject ample liquidity into the financial system. The ECB has gone a step further by announcing an Outright Monetary Transactions (OMT) programme.

It focuses on the current accounts of euro area countries (as per cent of GDP) and shows the difference between various countries running generally current account surpluses, and selected countries in the periphery with a negative balance. These deficits are financed by a corresponding capital flow in the opposite direction. For each year, the upper band depicts the range of current account surpluses for a group of countries that include Germany, Luxembourg and the Netherlands. Similarly, the lower range depicts the corresponding range of deficits for Cyprus, Greece, Italy, Portugal and Spain. The divide between the groups is notable and it is not surprising that those countries in the lower part of the chart featured prominently in the unfolding crisis. Eventually, when markets reoriented their focus towards economic unsustainability, the flow of capital reversed direction; market discipline now took the form of capital flight. 2  BIS central bankers’ speeches  Governance problems are perhaps better understood by looking more closely at the origins of the Greek situation. On the fiscal side, Greece was not adhering with the Maastricht criteria while its competitiveness was being eroded. This situation was aggravated since government spending was underreported.
All in all, our initial findings demonstrate impressive efforts on the part of the accession countries to achieve satisfactory regulations with regard to their central banks and financial systems in conformity with EU requirements, even if further work is still needed. At the same time, a sound financial legal system requires not only the adoption of the "right" financial laws, but also the support of an infrastructure – and, indeed, a culture – that ensures that the relevant laws can be effectively applied. The strengthening of the financial and banking sectors Although the restructuring process in accession countries has made substantial progress, the financial sectors of accession countries still need to be further developed in terms of size, depth and functioning. This applies, in particular, to the banking sector that largely dominates the financial sector of these economies. The challenges ahead are numerous: inter alia, the weakness of banking intermediation, reflected in the low level of credit to the private sector, the relatively large proportion of bad loans in banks' balance sheets in some countries or the exceptionally high spreads between lending and deposit rates that will progressively vanish in the next years. Fortunately, the privatisation process and the increasing participation of foreign investors in the banking system have supported the rehabilitation and transformation of formerly state banks into efficient and profitable banking institutions.

Going forward, the strategic location of Thailand and regional trend towards more economic integration provides an opportunity for Thailand in terms of market reach. We are located in the centre of ASEAN, with a combined population of more than 600 million, a large proportion who are of middle income and have potential to spend on goods and services. We are also to enter the ASEAN economic community, a regional agreement to liberalize and integrate trade in 2015 which would further develop trade prospects. Economic integration with CLMV countries will open up the opportunity to tap into a rapidly-growing consumer market as well as the regional workforce. Thailand is well known as a high performance production base in the region, especially for automobiles, food and petrochemicals. Meanwhile, the CLMV countries have a young and abundant labor force. Thus Thailand can benefit from a production supply chain that makes use of the CLMV resources for more efficient production to support businesses at home. Seeing these chances, the government has given priority to infrastructure by endorsing investment plans, especially in railways and roads, to reduce transportation costs, and setting up Special Economic Zones at five locations along our border to reap the benefit from our strategic location as a gateway to other ASEAN countries. On the side of the Bank of Thailand, we facilitate the ease of doing business through the Capital Account Liberalization Master Plan so that businesses can benefit from this opportunity.