samchain/econo-pairs-v1 huggingface dataset:
All told, we spoke to firms accounting for about three-quarters of current reserves balances. What did we find? Unsurprisingly, different firms thought about their reserves holdings in quite different ways – and no-one used the term ‘demand curve’! Nevertheless, we can build up a picture of demand for reserves by understanding three core drivers of demand, common to all firms. First, at the most basic level, firms hold reserves to meet both expected and unexpected sterling payments during each day. The shape of this demand depends on firms’ business models. Calendar effects are important for retail banks, for example; whereas wholesale banks and gilt-edged market makers are more affected by the ebb and flow of capital markets activity. And access to (and efficiency of) payment and settlement systems can have important implications for the reserves that firms need to hold. So innovations such as the Bank’s RTGS renewal programme14 have the potential to transform demand levels. Second, reserves are an important form of insurance against liquidity outflows over short, but multi-day, horizons. Regulatory rules require firms to hold liquid assets to cover projected outflows over a  14  https://www.bankofengland.co.uk/payment-and-settlement/rtgs-renewal-programme 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  thirty day period. This doesn’t have to mean reserves – firms could instead hold liquid government bonds, mortgage backed securities or even equities. But, unlike reserves, such assets have to be liquidated in the market before they can be used to meet outflows.

An important question is whether this increased relative attractiveness of alternative liquid assets would also reduce the PMRR. Few of the firms we spoke to expected a big effect on their minimum holdings. That’s consistent with more detailed surveys carried out by the Federal Reserve, which suggested little response  15  In practice, of course, asset prices are jointly determined with reserves demand: they will have adjusted to ensure that the aggregate supply of reserves, determined by asset purchases, is willingly held. 10  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  10  even to quite large changes in the opportunity cost of holding US dollar reserves.16 But we should be cautious of these findings when alternative rates of return have been so low for so long. Bringing all this together, our conversations with firms suggest the current sterling PMRR is of the order of £ Table 1 breaks this down into a base estimate of firms’ ‘true minimum’ demand to meet payments and liquidity outflow needs, and an additional estimate of the buffers held above these minima.17 These estimates draw on firms’ descriptions of their preferred holdings and their management of fluctuations in reserves levels, cross-referenced with our own analysis of historic reserves account activity.
High uncertainty persists over the intensity of the recovery in the closing months of the year, given how the pandemic has recently evolved in Europe. The across-the-board roll-out of new containment measures to counter the health crisis might lead to a significant slowdown in the rate of growth of activity, and even to a contraction, at least in some countries or sectors. For the year as a whole, the baseline scenario of the ECB’s latest forecasts points to an 8% reduction in euro area GDP in 2020, followed by a 5% increase in 2021. The estimated contraction for this year widens to 10% in the harshest scenario (based on a greater impact of the pandemic, with more severe restrictions and a delay in any possible health-related solution), which would moreover entail a very slight recovery, of 0.5%, in 2021. As to the inflation outlook for the area, the ECB augurs a very weak increase this year, of only 0.3%, rising in 2021 to 1%, a figure nevertheless some distance off the medium-term price stability objective. 2  1.2  Recent developments in the Spanish economy  In Spain, the impact of the pandemic on economic activity has been particularly marked, and much more acute than in past recessions. GDP duly posted historical quarter-onquarter contractions in the first half of this year (5.2% in Q1 and 17.8% in Q2), essentially as a result of the rapid spread of the virus and of the measures of confinement and restriction of activity adopted to contain the pandemic.

These often stem from sensitivity to fast swings in capital flows, and break out when economic policy lacks credibility. They can also be caused by a combination of domestic problems and contagion from other countries that are considered to be in similar economic situations. At the same time as the free movement of capital increases the potential welfare effects of globalisation, it entails risks that can only be managed through disciplined economic policy. IMF financing for capital account crises should principally aim to quickly restore confidence in the affected countries’ economic policies. The intention should be that the loans be paid back to the IMF after a relatively short period of time. When a serious crisis is at hand, it is hard to say no to a loan request. At the same time, it is important to counter tendencies towards moral hazard, which in the longer term could result in both riskier economic policies and irresponsible lending from private creditors. This is a genuinely difficult issue. There are no easy solutions. The Nordic-Baltic constituency has argued that the use of the IMF's loan instrument must be based on unambiguous, predictable rules. And that the rules be applied. This has not always been the case, e.g. as regards certain decisions concerning exceptional access, i.e. where the IMF has granted substantial loans without requiring sufficient conditionality. In a number of instances the result has been a longer-term dependence on loans and in several cases recurrent crises as well.
In most cases this was at a very respectable level; all figures fall in the range 22-38% of GDP on average for the period; by way of comparison, 1997 figures for USA, Japan and Germany were 18%, 26% and 19% respectively. Also shown is the level of total domestic savings; this is the sum of savings by the household, corporate and government sectors (and may of course include dissaving by one or more of those). For certain purposes I would have liked to show the household component of the total, but sufficient data are not available. The third column displays second minus the first - i.e. the excess of savings over investment on these measures. For all but two of the economies, domestic saving has outstripped fixed capital investment - in some cases by a substantial margin. But these figures tell us nothing about the intermediation process between saving and investment or about the role of financial institutions and markets. Much of the investment may take place within the same economic unit as where the savings arise, or be directed by government, without any requirement for third-party intermediation. Of course, if domestic saving is channelled into domestic investment mainly through government or other routes which are not subject to market discipline, allocative efficiency within the economy is likely to be impaired.

This market has progressed considerably in recent years, with the evolution of the markets for Exchange Fund bills and notes, borrowing programmes by public sector bodies, fundraising by multinational agencies and sizeable funding programmes - mainly at the short end - by Hong Kong financial institutions. But, except for Exchange Fund bills, the secondary markets are not greatly active and there has been little activity by local private sector corporate entities to raise longer-term funds directly from the debt market. Perhaps the difficulty is simply that market conditions are seldom regarded as propitious on all fronts simultaneously - at present, for instance, the general level of interest rates may tend to discourage issuance at term. And there is definitely a chicken-and-egg problem in that prospective investors would like prior evidence of a liquid market, but liquidity cannot be tested until there has been issuance. Dilemmas such as these are certainly not unique to Hong Kong. I acknowledge also that there are perceived obstacles concerning the tax regime, but it is worth noting that Hong Kong does have a low overall tax environment. It is hard to find solutions which fully satisfy all parties in such matters. It is also worth noting that, in normal market conditions, there is perhaps less incentive to exploit the potential of the local currency debt market than there might be in other centres, because of our pegged exchange rate: some borrowers may consider the US dollar 3  BIS Review 52/1999  market a satisfactory surrogate, especially given its established liquidity.
It wants to explain better why it is aiming for an inflation rate of 3%. The communication strategy of the Bank of Albania is to explain the working of the monetary policy issues and its own tasks, to you all. The understanding of the public is needed for a good conduct of Inflation Targeting. Credibility has to be gained. As said before, a solid statistical framework is also indispensable. Reliable statistics can tell us about the past and the present. On the basis of this, the Bank of Albania can use its econometric models to forecast the future. The Bank of Albania can conduct monetary policy, and can target inflation better, in case of better forecasts. We can stress the preconditions. But the fulfillment of all preconditions for Inflation Targeting depends also on others in the Albanian economy. Under Inflation Targeting, the monetary policy aims at a precise inflation target in the medium term. The Bank of Albania can only reach this target in case the interest rate setting affects the deposits, credits, private consumption and business investment, GDP, like in a developed market economy. Only in this case can monetary policy be effective. Therefore, some preconditions for putting full fletched Inflation Targeting in place can not be met ONLY by the Bank of Albania. They depend upon the development of the Albanian economy, they depend upon the provision of statistics by INSTAT and others, they depend upon the understanding of the public.

These certifications will reduce costs and increase efficiency of our banking system operation. Complete re-scanning of our financial system – in collaboration with the World Bank and the IMF – (financial Sector Assessment Program) – to enable the identification and correction of its weak points in a timely manner. I consider that special attention will be paid on: the activity of non-bank financial institutions and convergence of their practices and regulations with those of the banking system. This will boost the effectiveness of financial system and fair competition within and among various segments of this system; fully efficient operation of the supervisory architecture of our financial system, starting from the Financial Stability Advisory Group (FSAG) and continuing with the practices on information share and collaboration amid its regulatory institutions; continuing the work for the reduction of foreign currency use in Albania, aiming at increasing awareness of both public and private actors on the risk it bears, thus by strengthening the response of the Albanian institutions. Third priority relates to encouraging formalisation, and increasing both financial education and inclusion. The relatively high level of informality in the Albanian economy stems serious negative consequences, through putting in threat competition, increasing uncertainty in commercial and financial relationships, and reducing public revenues. In this view, the Bank of Albania will continue to work to strengthen formalisation of the economy.
115  11  110  10  105  9  100  8  95  7  90  6  85  5  80  4  75  3 2000  70 2003  2006  2009  2012  2015  2018  1) Figures for 2019 are based on the projections in Monetary Policy Report 4/19. Sources: Norwegian Technical Calculation Committee for Wage Settlements (TBU), Statistics Norway and Norges Bank  Despite a more than 15 percent reduction in labour costs in a common currency since 2014, the tradable sector has shown fairly weak growth, as reflected in recent trade balance developments. The non-oil trade deficit has continued to widen, which must be seen in the light of the decline in oil service exports owing to the sharp fall in global offshore oil investment. Seafood exports have recently set new records in krone terms, but exports have remained flat for several years in volume terms, partly because of salmon lice problems. Capacity constraints have also hampered exports of metals and other capital-intensive manufactured goods. Profitability has clearly improved, but a considerable increase in production requires substantial investment, and it is only in the past few years that manufacturing investment has shown a pronounced pick-up. The large foreign assets that we have accumulated mean that we can run a trade deficit when oil and gas revenues eventually decline.

1) Percent 10 9  10  Equities Fixed income  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1 0  0 1999-2009  2010-2019  1) At 30 September 2019. Source: Norges Bank  The rise in equity prices has largely been driven by a fairly small number of companies. US corporate profit margins have increased markedly. The big earners have been the tech giants, which typically operate in markets where there are substantial profits to be gained as the dominant company. Their profits have drawn growing attention from competition authorities and higher taxation is under discussion internationally. Current valuations are based on expectations of sustained profit growth. This entails a downward potential. 6  Developments in the fund’s value over the past decade must also be seen in the context of the decline in global interest rates over time. The interest rate decline reflects the expansionary monetary stance prevailing since the financial crisis. Central bank policy rates were reduced to very low levels in many countries in order to stimulate economic activity. Several central banks have also engaged in substantial asset purchases, which has pushed down long-term interest rates further. NORGES BANK ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  But low interest rates also reflect other driving forces such as population ageing, high saving in emerging economies, growing inequality and a general decline in productivity growth.
The overheating changed into a severe setback at the beginning of the 1990s. Between 1990 and 1994 the Swedish GDP fell by a total of 4.7 per cent. In Finland the fall experienced during the same period amounted to 10.4 per cent. Finland was hard hit by the large decline in export brought about by the collapse of the then Soviet Union. Open unemployment in Sweden rapidly soared from a level of around 3 per cent in 1991 to 8.2 per cent in 1993. In Finland, the number of unemployed increased from just over 6 per cent to 16 per cent. Some of this difference can, however, be due to the slightly different form taken by labour market policy in the two countries and to how unemployment is defined. The deficit in public finances increased considerably; in Sweden it was at worst 12 per cent of GDP in 1993 and the borrowing requirement amounted to almost 17 per cent. The deficit in Finland in the same year was 7.3 per cent of GDP. The crisis in the banking system at the beginning of the 1990s hit both Swedish and Finnish banks hard. Sveriges Riksbank, like the Bank of Finland, found itself in a difficult situation at the end of 1992, following the currency crisis. The decision on a new monetary policy strategy was taken in an environment where confidence in monetary and foreign exchange policy was low.

In the context of these fundamental and far reaching changes, less attention has however been accorded to the necessary changes to the human capital development that is required for the effective participation and performance in this new financial landscape. Indeed, the talent required also needs to be transformed. These changes have also precipitated a revisit and review of education systems around the world over to address the current discontent that the education has not kept up with the changing human capital requirements of the financial services industry. The World Economic Forum has projected that “staggering” talent gaps will arise in large parts of the world by 2020, and this will have a bearing on national competitiveness while organisations compete for talent on an unprecedented scale. Managing talent has consequently become significantly more challenging and needs to be addressed with talent development. The objective is to harness the full potential of the workforce. This is particularly urgent for Asia as it emerges as an important growth centre in the global economy. With Asia’s financial services industry poised to grow rapidly, this growth must be supported by the development of capabilities among the financial industry professionals. Going forward, the investment in this core pillar will be a defining factor in the performance and the capacity of the industry to reinvent and transform and thus enhance its resilience and sustainability. The path forward needs to be guided by a strategic response to the forces that are shaping the new talent landscape.
Page 1  Inflation persistence and monetary policy − speech by Huw Pill ICMB Lecture, Graduate Institute, Geneva  Page 2  Published on 04 April 2023  In this speech Huw Pill discusses the outlook for the economy, including how lower energy prices might push down on inflation in the short term, but could also boost demand and therefore impact inflation in the medium term. He stresses that the MPC must continue to monitor how these external shocks to inflation might become embedded in the economy, and therefore risk persistently high domestically driven inflation. He goes into detail about the Monetary Policy Committee’s role in controlling inflation, and the potential impact of its recent significant increases to interest rates. He outlines how the Monetary Policy Committee carefully assesses the impact of interest rate rises that have yet to feed through, with the need to address current inflationary pressures. Speech Good evening everyone. It is a great pleasure to talk under the auspices of the International Centre for Monetary and Banking Studies (ICMB) this evening. Thanks in particular to Professor Panizza for extending the invitation. I look forward to a stimulating debate. Let me start with some stark and uncomfortable facts. Annual UK CPI inflation was 10.4% in February. That is unacceptably high. The Bank of England’s Monetary Policy Committee (MPC) is committed to returning inflation to its 2% target on a sustainable basis.

Its significant similarities to the principles in ethical finance and socially responsible investment has been a further factor that has drawn  BIS Review 136/2008  1  interest in Islamic Finance. Islamic finance does not only involve the avoidance of riba (usury) but also extends to issues relating to ethical values, such as fair trade and environmental protection. This has prompted participation from conventional global players in Islamic financial activities and in the acquisition of strategic stakes in Islamic financial institutions. There is also a growing number of established international financial centres such as London, Tokyo, Hong Kong and Singapore that have initiated plans for the integration of Islamic finance into their financial systems. Islamic finance has now become one of the fastest growing segments in the global financial system. The total Islamic assets under management by Islamic banks and conventional banks offering Islamic banking services is reported to exceed USD500 billion. This growth has also been in the other major components of the Islamic financial system. Islamic mutual funds are estimated to be about USD300 billion, while global takaful or Shariah-compliant insurance contributions are estimated to be about USD5 billion. Strengthening the international infrastructure Integral to the efforts in the development of Islamic finance has been the development of the supporting international Islamic financial architecture.
C)  new (non-bank) market entrants  •  the digitalisation of financial services opened the doors for a wave of new market entrants;  •  there are two categories of new market entrants;  •  first, there are start-ups making use of new information technology applied to financial services (“FinTech” companies);  •  second, there are established internet companies (large US social media or ecommerce platforms);  •  In most cases, they do not offer banking services other than the initiation of payments or access to account information;  •  these new product and service providers might present a challenge to the traditional market incumbents’ revenue streams;  •  their impact on the underlying financial market infrastructure will be more limited as the clearing and settlement of payments and securities transactions still take place between the account-holding entities.

To this end, it is prepared to purchase foreign exchange in unlimited quantities and to take further measures immediately if required. Once monetary policy requirements have been met, our foreign exchange investments are guided by three criteria: security, liquidity and return. In order to ensure that we meet the first two criteria – security and liquidity – we hold a substantial portion of our foreign exchange reserves in liquid government bonds, in the most important global currencies; almost threequarters of our foreign exchange reserves are currently invested in such instruments. When it comes to our third criterion – return – equities play an important role as they generally have a higher return potential than the government bonds of the major advanced economies. Currently, 16% of our foreign exchange reserves are invested in equities. BIS central bankers’ speeches  1  Given how substantial our foreign exchange reserves are, doing justice to all three of these criteria simultaneously is no simple matter. On the one hand, the considerable growth of our foreign exchange reserves has increased the concentration risk associated with conventional government bonds; on the other hand, there is the risk that we may overuse certain markets, thereby potentially triggering undesired price fluctuations. We therefore evaluate investment possibilities on a continual basis. As part of our search for diversification, Asia-Pacific markets in particular have become increasingly important for the SNB’s investment policy in recent years.