samchain/econo-pairs-v1 huggingface dataset:
Sunil Mendis: Economic performance, prospects and challenges Speech by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the Donor Conference, Kandy, 15-17 May 2005. *  *  *  Introduction Honourable Minister of Finance, representatives of the donor community and friends, Sri Lanka has achieved considerable economic progress in the past few decades. Per capita income has increased, taking Sri Lanka into the category of a low middle income country. Many years of government focus on meeting the social needs of the people have enabled Sri Lanka to achieve human development indicators well beyond countries with comparable levels of income, in fact, similar to those of more developed middle income countries. The structure of the economy has been diversified from its earlier concentration on primary agricultural commodities, making the economy more resilient to internal and external shocks. Overall macroeconomic management has been reasonably sound, although achieving a better balance has sometimes been a challenge due to external and internal shocks. However, despite these positive developments, many weaknesses remain, posing strong challenges to policy makers.

The crisis, for example, had a different impact on the Albanian economy, from what we had historically experienced. At the time, the Albanian economy did not seem to be vulnerable to the foreign sector. Subsequent analysis, however, showed that domestic imbalances had built and, indeed, made the economy vulnerable to a foreign credibility shock. It is crucial that research in central banks focus on available information and methodologies, which scrutinize existing paradigms, making this information useful to policymaking, before it becomes or leads to vulnerabilities. In light of the financial and human capital constraints faced by central banks in small, open economies, such as Albania, we believe that it is important for these topics to be discussed, in this workshop, with fellow researchers from academia and other central banks. I would like to encourage our researchers to publish their papers in relevant, peer-reviewed 1/3  BIS central bankers' speeches  journals as the most important certification of their work. This will make your research projects more useful and facilitate speedy implementation in mainstream policy making. Despite recent success in publications, one of the things that I hear the most is that there is not much research interest in the scientific study of small, developing or emerging market economies like Albania. From my prospective, I think that there is interest in the scientific study of small, developing or emerging market economies such as Albania, because of the particular and distinguishing characteristics of our economy, which can be different from those represented in mainstream research findings.
The unemployment rate is 8-1/4 percent – well above the rate anyone on the FOMC sees as being consistent with our longer-run goal; in my view, this is a substantially higher rate than one might attribute to supply-side factors, such as extended unemployment insurance and a heightened degree of mismatch in labor markets. Realistically, this is a 2-1/4 to 3 percentage point deviation from our current maximum employment objective. Because this occurred with nominal interest rates stuck at the zero lower bound since December 2008, I believe it’s hard to say that we are not in a liquidity trap. Recently, the U.S. data have been more encouraging, with the labor market improving and private demand showing a little more traction. Without a doubt, these are welcome developments. But even the more optimistic forecasts see output increasing only moderately above its potential growth rates; no one has an expectation for a surge in activity that would quickly close resource gaps. At the same time, the outlook for inflation is subdued, with most FOMC participants’ forecasts for increases in total personal consumption expenditures prices averaging roughly between 1-1/2 and 2 percent over the next three years. Furthermore, private sector long-run inflation expectations are quite well anchored.

Competitiveness and market reform To put the favourable external sector performance on a firm footing, we must build on and further the improvements in competitiveness. In this connection, the markets for factors and goods and services must function in a way conducive to containing costs, margins and prices. Clearly, in the labour market, we need a stable employment-promoting regulatory framework which, at the same time, affords sufficient flexibility to attune working conditions to the circumstances of the business cycle. Indeed, greater moderation and flexibility can be seen in wage-setting in recent quarters, as can – and this is also important – a lesser degree of indexation. A more intensive use of the wage and non-wage flexibility mechanisms envisaged in the new regulatory framework would lend continuity to this ongoing improvement in competitiveness. But our problems of lack of flexibility and competition were not and are not only in the labour market. In the market for goods and services, the recently approved National Reform Plan includes a set of measures aimed at removing obstacles to competition, attaining productivity gains in various sectors and improving the functioning of various institutions. Private-sector deleveraging and lending The overindebtedness of households and firms is another of the major problems that arose in the last upturn in the Spanish economy. Private debt/GDP ratios have fallen from their peaks in 2010, but at a relatively slow pace. The main explanation for this sluggishness lies in the downturn in private-sector nominal income since the onset of the crisis.
History,  32 This would involve the colocation of data systems, which, for our part, would concern payments in Swedish kronor. 33 In the very near future, we will approach the market with a consultation on joining TIPS. 14 [15]  however, has shown that it works best when the Riksbank leads the development in cooperation with the market. 15 [15]

Nor Shamsiah Mohd Yunus: Launch of the Joint Report on naturerelated financial risks in Malaysia Speech by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the launch of the joint report with the World Bank “Exploring nature-related financial risks in Malaysia”, Kuala Lumpur, 15 March 2022. * * * Good morning and welcome to today’s launch of our joint report with the World Bank, Exploring Nature-related Financial Risks in Malaysia. Over the last three years, the Malaysian financial sector has stepped up its response to the urgent and existential threat posed by climate and environment-related risks. Joint efforts by regulators and the industry to better understand, assess and manage climaterelated risks have made substantial progress. In the Financial Sector Blueprint 2022–2026 recently released by Bank Negara Malaysia, we further reiterated our vision, and expectations, for the financial system to facilitate an orderly transition, towards a greener economy. The financial sector has a crucial role to play in this. To that end, key tools and frameworks are being put in place to: (i) channel financial flows and increase funding solutions towards a greener economy; (ii) strengthen supervisory oversight and address the appropriate treatment of climate and environment-related risks in prudential frameworks; and (iii) address knowledge and data gaps around these risks. Even as we continue to move these priorities forward, we are aware that climate change is not a standalone environmental threat.
Furthermore, as the final outcome of this task is necessarily uncertain, it is no exaggeration to say that much of the success of the entire process hinges critically on how banks cope with the risks they face when deciding how to allocate resources. I have tabled some of the main elements on which I will base my subsequent arguments, which may be summarised as follows. The overall effects of monetary policy decisions cannot be meaningfully understood without previously assessing how the banking system is performing the job of channelling the original impulse of the central bank in the money market into the rest of the financial system and, ultimately, into the whole economy. Thus, a continuous assessment of the norms of behaviour and the overall conditions of the banking industry is a key input for any central banker wishing to be in the best position to foresee and evaluate the potential outcome of policy choices. In my address, I will focus on the general question of how Basel II may affect the way monetary policy influences some key financial and real variables. In doing so, I will follow a strategy that is very familiar to the economics profession, in the sense that I will regard the application of Basel II as an “exogenous shock” that will eventually unleash some spillover effects into an otherwise unchanged current monetary policy framework.

Financial market participants pay considerable attention to the monetary policy decisions made by central banks, for these are, in a broad sense, the “guardians” of liquidity. Excessively expensive liquidity is likely to result in a suboptimal volume of investment and, in turn, in an inefficient under-use of society’s productive resources. Likewise, when monetary conditions are excessively lax, some liquidity may be directed to financing projects with poor returns. If this situation prevails for some time, inflation arises, the average productivity of investment declines, asset prices deviate from their normal or fundamental values and the economy as a whole loses its ability to maintain a sustained growth path. When deciding on monetary conditions, central banks must understand the mechanisms underlying the workings of the economy in order to react to potential dangers and opportunities in due manner and course. No diagnosis could ever be complete without a careful analysis of how the entire circulatory system is behaving. From that standpoint, central banks can then be thought as of being the heart, initially controlling the price of the transactions conducted in the money market. Commercial banks would naturally fit into this analogy as the veins and arteries, for they have the last word on the destination of the funds they are being endowed with, a decision that pertains greatly to the sphere of banks’ credit management.
Calculating equilibrium unemployment after the fact is difficult and requires a number of assumptions. Serious attempts have been made, but as shown, they have had varying results. At the same time, monetary policy is forward-looking and is thus guided by forecasts of economic development. However, assessing the level of equilibrium unemployment in several years is even more complicated. And, as I mentioned earlier, even if we could know what the level of equilibrium unemployment would be further ahead, this would give us no guidance for monetary policy in the here and now. The economy is regularly subjected to structural changes affecting equilibrium unemployment. And we have limited knowledge of how the adjustment from one equilibrium rate to another occurs, or how long it takes. This means that using equilibrium unemployment in practical monetary policy is not uncomplicated. It is therefore important to closely monitor all of the statistics that reflect conditions on the labour market, which we already do. Monetary policy can primarily affect unemployment in the short term, via aggregate demand. Here I can mention that several debaters have previously claimed that an incorrect balance in monetary policy has made a significant contribution to the negative developments in the labour market. Naturally, we should not conduct a monetary policy that leads to demand being unnecessarily low and to unemployment becoming higher than it would have been because we single-mindedly react to the risk of inflation rising.

Sources: The Riksbank, Ministry of Finance, National Institute for Economic Research and Statistics Sweden  As the figure shows, assessments of the level of equilibrium unemployment for the last four years (2008–2011) are relatively similar. The Ministry of Finance assumes that equilibrium unemployment will decrease strongly in the years ahead. The difference in the assessments is primarily because the National Institute of Economic Research and the Riksbank do not expect the economic policy to have such large effects on equilibrium unemployment. Good guidance for monetary policy? So serious attempts at calculating equilibrium unemployment have been made, but these have concluded in different assessments. Nevertheless, it is important that we try to gain an idea of equilibrium unemployment. Not least is this important in a time when reforms have been adopted that should (as most analysts agree) lead equilibrium unemployment to decrease. But I am extremely doubtful as to whether measures of equilibrium unemployment should be given too prominent a role in practical monetary policy. It seems simple in theory; but, in practice, it is not. Even if we could be more certain of the level of equilibrium unemployment further ahead, this would not give us such strong guidance for monetary policy decisions in the here and now. This can be illustrated by the following diagram.
François Villeroy de Galhau: Banking turmoil - three blessings and a funeral Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Eurofi High-level Seminar 2023, Stockholm, 28 April 2023. *** Ladies and Gentlemen, I am delighted to address you at this Eurofi seminar in Stockholm, and I would like to extend my warmest thanks to David Wright and Didier Cahen. This speech, as the two previous ones, seems like a perfect opportunity to take a first look at the lessons to be learnt from the banking turmoil of 2023. As I have the privilege to speak after my friends Pablo Hernández de Cos and Klaas Knot, my task is made simpler: they have already covered a lot of ground, and hence I will be able to speak still more freely, and to call my speech "Three blessings and a funeral". Let me start with the funeral, at least the one that we can welcome, but which, unfortunately, is not final. It should be the condemnation and the funeral of mismanagement. Indeed, blatant mismanagement of the risks and of the business model in some banks explains first and foremost the recent turmoil. As Pablo said in Washington, "jumping straight to discussions about the regulatory and supervisory implications of recent events is akin to forgiving banks for not fulfilling their primary responsibilities".1 To put it even more bluntly, when some people act like reckless drivers on the road, they are the ones who are guilty, not the police.

This is the right place to stress that the BNB is aware of its huge responsibility for the financial stability of this country and consistently works in fulfilment of the functions and tasks assigned to it by law. In its work, the Central Bank collaborates with many other international and national institutions, and whenever a need arises, it steps into the role of a constructive opponent. Because, as I have stressed on various occasions, it should not surprise us, nor should we show intolerance to the fact that the political institutions in the democratic countries are very sensitive especially with regard to quick achievements within the context of the electoral cycle. Whereas the tasks of central banks go beyond the horizon of the next parliamentary or presidential elections. We are guided by the understanding that we have to keep our reputation as institutions with national responsibility, holding as our priority the long-term economic interests of the people and of the state. Hence, the fundamental logic of the so very important (and very strictly adhered to throughout the EU) principle of national central bank independence and the need to provide independent analyses and information to the general public.
The first phase: combating a systemic shock The first phase of the crisis had its origin in the US. In 2006, many experts considered the subprime crisis to be a minor incident with only local impact, but then it escalated into a financial crisis of systemic proportions that propagated to the whole advanced world. Many banks experienced a sudden stop in their access to money markets, and the ensuing liquidity squeeze in interbank markets affected credit provision across the United States and euro area. The effects on the real economy were immediate and large. Both regions went through severe recessions. But the respective central banks and fiscal authorities responded promptly and decisively. The Federal Reserve quickly cut its target for the fed funds rate to close to zero, then embarked on a series of large-scale asset purchases of US government bonds and mortgage-backed securities. Likewise, the ECB cut its main refinancing rate by more than 300 basis points between October 2008 and May 2009. To ease the liquidity constraints of the banking system we altered the mode and maturity of our operations and widened the range of eligible collateral. These responses were, in many ways, an extension of the existing operational frameworks. The asset side of the Fed’s balance sheet traditionally consisted mainly of holdings of US government bonds. By contrast, the ECB, lacking a single fiscal counterpart, injected liquidity mainly through repos with banks. This mode of operation reflected in turn the predominance of bank-based intermediation in the euro area.

At present - with low interest rates abroad and a close relationship between domestic interest rates and the krone - a tighter monetary policy would curb credit demand primarily because a stronger krone would reduce job security. A flexible inflation targeting regime reduces the possibility of exposing households to a dual shock in the form of higher unemployment and higher interest rates, as was the case at the beginning of the 1990s. If the economy is exposed to disturbances that can lead to higher unemployment, inflation will normally decline and interest rates will be lowered. A flexible exchange rate An important channel for monetary policy in a small, open economy is the foreign exchange market and the exchange rate. The krone fluctuates. This is not surprising because other countries’ currencies also fluctuate. The krone exchange rate is the price of our currency measured in a foreign currency. Developments in other countries are just as important for the krone as developments in the Norwegian economy. Capital flows freely and flows can change rapidly. This can spill over to exchange rates and interest rates as well as output and employment. The chart shows the effective exchange rate for Norway and a number of other small countries with inflation targeting. Exchange rate fluctuations are approximately the same for Norway, Sweden and Canada, whereas the krone exchange rate fluctuates less than the exchange rate for Australia and New Zealand. Therefore, the krone does not stand out as particularly unstable compared with other countries’ currencies.
To bring you another example that is close to my home, the Danish bank Danske bank has significant operations in many parts of Northern Europe. With its network of branches, it is now the fifth largest bank in Sweden and is on the verge of becoming systemically significant, at least by some standards. There are also some banking groups that have a significant share of their operations outside of their home country. Interestingly, banks from some small countries such as Belgium and Austria are responsible for a large part of cross-border banking investments. It is banks that may have systemic relevance in several countries, or are perhaps systemic in one country but not in another, or which are simply very large, and complex, with geographically widespread operations, that pose the greatest challenges to authorities. Fortunately, there are not too many of these critical banking groups in Europe at this point in time. According to an ECB study, there are 43 banks with operations in three or more countries. Of these only nine are truly pan-European banks. Nevertheless, a crisis scenario in any of these may pose serious difficulties to resolve. In the current system, the organisational structure of a cross-border bank – specifically, whether the bank is organised according to a subsidiary structure or a branch structure – affects the distribution of responsibilities between the home country authorities and host country authorities.

François Villeroy de Galhau: Digital innovation - what role can we play as central banks? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Singapore Fintech Festival, 8 November 2021. * * * Ladies and Gentlemen, It is always a great pleasure for me to have the opportunity to speak at the Singapore Fintech Festival, and I wish to thank Ravi Menon and the Monetary Authority of Singapore for organizing it. Although I am joining from Paris today, I look forward to coming back to Singapore soon to continue exchanging. Innovation may not be the first thing that comes to mind about central banks. After all, our institutions have been around for quite some time: MAS just turned 50 – and I take this opportunity to congratulate this golden Jubilee –, and Banque de France is more than 2 centuries old. We are more associated with stability than disruption… Yet the blossoming of digital innovation has the potential to transform the financial system in its entirety. We have to embrace these changes, but there are also things that we need to preserve in this process: the stability of the financial system. Innovation and stability can appear as contradictory in the short run; but they are complementary through a common value; a keystone: trust. Trust of the public in money. To be implemented effectively, these dual principles of innovation and stability require a cooperative setting.