samchain/econo-pairs-v1 huggingface dataset:
The political debate is in a sense being taught to keep the long term in view. The public then knows from the national debate that fiscal discipline is good for the country and if “accountants” or other nations in Brussels criticise your budget policies, there is a greater chance of the criticism being interpreted as a help towards fiscal soundness. The Swedish trade unions, for example, are among the most vocal defenders of our budget target. However, the framework might still not be strong enough - the 2 per cent over-the-cycle target has been slipping somewhat out of view given that the government, as I mentioned, is focusing more on the short term recently. Sweden would perhaps need an even more formal external fiscal evaluation. This leads to an important conclusion for the Pact. Perhaps the solution to regain credibility is neither to water down the Pact, nor to impose even stricter rules centrally. The solution is perhaps to build from below - to complement the European level with national frameworks in the respective European nations so that they come to internalise the need to balance their budget over the cycle and to ensure that the same transparency exists on the fiscal side as on the monetary side. While pressure from fellow finance ministers has apparently not worked well enough, the present attempts at national processes with transparent targets have a better track record.

The recent developments were triggered by a perception of higher credit risk originating from a perceived deterioration of the credit quality of assets held both by banks and by special  BIS Review 130/2007  3  investment vehicles, with which banks were associated either through liquidity commitments or reputation issues. The situation deteriorated when liquidity buffers of banks were put under stress by the need to meet their liquidity commitments and to take on their balance sheet assets which had become illiquid. Then, banks also became unwilling to provide unsecured lending to other banks, in particular at longer maturities, because of uncertainty whether they would themselves obtain liquidity if needed. Once this stage was reached, the deterioration of liquidity conditions became self-reinforcing, and turned out to be painfully durable, as can be seen for instance from the still exceptional three-month EURIBOR spread relative to three-month repo rates. What could central banks do about this? First, they provided extra liquidity through open market operations. This not only contributed to bringing down short-term interbank rates to target levels again, fulfilling monetary policy implementation purposes, but may also have contributed to supporting the willingness of banks to lend. Second, accepting that availability of central bank eligible collateral is the ultimate line of defence against illiquidity for banks, many central banks widened the set of eligible collateral. For instance, the central banks of Canada and Australia took such actions, and also the US Fed clarified that it would accept certain instruments in its discount window.
16 It becomes difficult to attract labour to the major cities when it is impossible to find a home for a reasonable price. 17 I am concerned about this social development, as it is creating problems for economic growth and economic distribution, and is increasing the likelihood of financial crises. It is of great importance that reforms are carried out to slow this development down. Measures affecting all mortgage borrowers are absent Like the Riksbank, Finansinspektionen has drawn attention to households’ high indebtedness and has taken measures to reduce the risks and increase resilience among households. This has also contributed towards slowing down price growth for housing, although this was not the primary purpose of the measures. 18 However, these macroprudential policy measures, such as a loan-to-value limit and amortisation requirements, are only aimed at new borrowers. Consequently, they mainly affect the conditions for the people I refer to as outsiders and, to some extent, could make it more difficult for them to enter the housing market. 19 On the other hand, there are few measures affecting the stock of already existing loans, which means that the new rules affect insiders and outsiders differently. In a study, the Riksbank has demonstrated that an amortisation requirement aimed at all borrowers could reduce household debt over the long run and that this would also mean a redistribution of resources from lenders to borrowers.

Thanks to financial engineering and innovative products, only a small portion of financial institutions’ assets is in government securities. Therefore, asking for government securities as collateral in open market operations would no longer provide enough liquidity to the financial system. In the meantime, as banks have lost their dominance in the financial system, corporations and non-bank financial institutions have joined the conventional banks as the counter parties of central banks in market transactions. The question in this context is (1) whether the innovative policies we have seen in the last year will lead to longer-term changes in central banking doctrine and behavior, (2) whether in parallel to new developments in financial structure central banks will adopt a more flexible approach in operational practices, and (3) maybe more importantly whether central banks will maintain their influence in the financial markets, which has grown rapidly due to extraordinary actions during current crisis? These are important questions to discuss and I hope this conference would provide new insights to policy makers as we sail through uncharted waters. While concluding my remarks, I would like to extend my thanks to the members of the Forum Istanbul, who have contributed to the constitution of constructive criticism environment that I perceive as an important element in building the future of Turkey. Thank you for your attention. 4  BIS Review 73/2010
The predicted values are from a regression of daily changes in UK 3-year nominal spot interest rates on near-term surprises in economic data, from the UK and a range of other countries. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  That uncertainty about wage formation may have been one thing that tempered the market’s reaction to stronger-than-expected economic data. But I suspect there was something else at work as well – and that’s Brexit. There’s been a persistent strain of opinion that EU withdrawal is something that necessarily means lower interest rates, or at least that it’s a reason to avoid putting them up. If so, then I think the belief has been overdone. It’s not that the opposite is true. I’m certainly not going to argue here that interest rates will inevitably rise as Brexit proceeds. Apart from anything else, it isn’t the only show in town. Economic shocks come along all the time, in both directions. For example, one of the things that has sustained the UK economy over the past year or so, and to that extent contributed to the recent decision on interest rates, is the strength of the global recovery. On a UK-weighted basis, the world economy looks to have grown by almost 3% in the year to Q3, faster than for many years. This has nothing to do with Brexit and, if global growth were to falter, that too would have implications for the UK.

In countries where the use of the euro as a medium of exchange is highly significant, such as the Central and Eastern European Countries, 60% to 80% of exports and imports were settled in euro. B  The euro contributes to the stabilization of exchange rate regimes and financial systems  The euro is an instrument for the diversification of foreign exchange reserves •  According to the latest available data from the Bank for International Settlements (BIS), the euro is the second reserve currency after the US dollar (19.7% of the total amount in 2003 compared with 63.8% for the dollar) but the share of the euro has increased significantly (it stood at 12.6% in 1999). This is an important factor of protection for many countries with regard to strong exchange rate fluctuations because it allows public investors to diversify their reserves assets. Moreover, it constitutes a stabilizing factor for the international monetary and financial system as a whole. The euro is a factor of stability for exchange rate regimes •  In 52 countries or territories, the euro serves as the anchor of exchange rate policies or as the sole reference currency or as part of a currency basket. This mainly concerns the countries that have trade or institutional arrangements with the euro area (acceding countries, accession countries, the Balkans, North Africa and the Franc zone). These exchange rate regimes are the result of unilateral decisions that do not involve the Eurosystem.
So, although inflation is expected to be slightly higher than previously anticipated, our assessment is that it will be in line with the Riksbank’s target towards the end of the forecast period. Some questions One could say that the Inflation Report revolves around some questions, which I intend to touch upon briefly: •  One question is to what extent the high oil price will significantly hamper international economic activity. Although we, like most other forecasters, still assume that the oil price will fall again over the coming years, our assessment is that the price will be higher during the forecast period than we estimated in May. However, there are indications that the effects of the high oil price on growth will be relatively limited. For instance, the rise in the oil price appears to be largely a result of the fact that the world economy is expanding, although concern over terrorist acts and other factors also appears to have played a role. In addition, western world economies are today much less dependent on oil than they were in the 1970s, while monetary policy is now conducted in a way that makes it difficult for inflationary impulses from oil price rises to gain a foothold. Our current assessment is therefore that the high oil price will dampen, but not derail, the international economic upswing and that the effects on global inflation will be fairly modest. •  Another question is how inflation could be so low thus far this year, despite growth being relatively high.

Depending on the precise timing of the steps that will occur in the exit sequence, there will likely be opportunities to do so. For example, there is a good chance that the Desk will still be selling MBS at the time when the SOMA portfolio gets back to its normal size. 11 In such circumstances, the Federal Reserve would have to then engage in sizable Treasury purchases to offset the ongoing sales of MBS and to expand the SOMA portfolio as needed to meet currency demand and other factors. This period of Treasury purchases would allow the FOMC to rebuild its Treasury portfolio with the maturity structure that it sees as optimal. 9  This view was expressed by Chairman Bernanke in the press conference following the April 2011 FOMC meeting. 10  Of course, the minutes also noted that the path of sales could also be adjusted up or down in response to material changes in the economic outlook or financial conditions. 11  In this scenario, the Treasury portfolio, through redemptions of maturing assets, would have fallen below the levels that will be required once the SOMA portfolio has been fully normalized. This outcome would be intended to get the overall size of the balance sheet down more quickly, with a view that Treasury redemptions are an effective tool for doing so relative to more rapid sales of MBS.
Hence, according to the IDEAS- RePEc citation Index, when our entire research activity is considered, the Banco de España currently ranks second among Spanish economic research centres. And among our central bank peers worldwide our research production ranks very high as well as within the Eurosystem. Our collaboration with other researchers and institutions is also very strong. For example, the Banco de España has been organising an annual research conference since 2017, assembling leading scholars and policymakers to discuss cutting-edge research on relevant topics at the global level. Past editions of this conference have covered topics such as the way forward for EMU architecture, tax and transfers systems (jointly with the Institute of Fiscal Studies), and the measurement, causes, and consequences of market power in the digital era. Our ties with CEMFI are also crucial in this regard, not only as we provide the financing for this top-ranked institution but also as they ensure close contact among the researchers at both our institutions. A third dimension of our research activities is based on our conviction that high-level research relies critically on the availability of detailed and accurate statistics. In this regard, the Banco de España has made a significant effort to provide researchers with various microdata bases, most recently through the Banco de España data Laboratory (BELab).

It has been increasing by an annual rate of about 20 percent and it accounts for about 56 percent of the outstanding bond market in Malaysia. Several foreign multilateral development banks, quasi sovereign agencies and MNCs have received the approval of the authorities for the issuance of sukuks in our domestic sukuk market. The Malaysian foreign exchange administration rules have been extensively liberalised to enable non-resident corporations to raise ringgit and foreign currency denominated funds from our market. International issuers may thus issue multi-currency sukuks in addition to having the flexibility to swap domestic currency funding into other currencies. Pillar 2: Islamic fund and wealth management The sukuk market has been an important source of financing for productive investment activities, while for investors it provides potential for diversification into new asset classes. The second pillar in the Malaysia Islamic financial hub is the Islamic fund and wealth management industry. Malaysia is centrally located in the ASEAN region that has a population of 570 million. It is also positioned centrally between the major Asian economies of India, China, Japan and Korea. Malaysia has always been a highly open economy in trade and investment activities and has been a major recipient of foreign direct investment for more than a hundred years. As a destination for financial investment, the Malaysian capital market offers a wide range of world class financial products. More than 85 percent of the listed companies in the equity market are Shariah compliant, representing about 60 percent of total market capitalisation.
Trade in various assets entails large economic gains, among other reasons because consumption in different countries can be evened out over time. Other advantages are the transfer of technology that often accompanies foreign investments and the increased competitiveness in the domestic market that results when foreign companies are allowed to invest locally. A better complement to monetary policy is thus formed by measures restricting supply and demand for credit, which is to say primarily macroprudential policy measures. Measures for reducing the risks are needed now Having low interest rates for a long time entails risks for the financial system. Low real interest rates are contributing to the growing trends of rising housing prices and increasing household debt. Investors with predetermined nominal required rates of return, such as fund managers, insurance companies and pension funds, are finding it more difficult to reach their targets. This risks leading to an excessive increase in risk-taking, the overvaluation of assets and the accumulation of financial imbalances. In several of the countries worst impacted by the global financial crisis of 2008– 2009, the crisis had been preceded by rapidly-rising debts and housing prices. The downturn after a crisis also risks being deeper and more prolonged if indebtedness has risen rapidly before the crisis. The risks of household indebtedness therefore need to be managed and the longer this is put off, the more expensive it risks becoming. Measures thus need to be applied now to reduce the risks in the financial system. Household demand for loans needs to be dampened.

To illustrate this uncertainty, the Riksbank is considering the use of a so-called variation band for the CPIF outcomes in its future communication. The variation band is +/- 1 percentage point around the target of 2 per cent, which captures almost three -quarters of CPIF outcomes since 1995. The design of the variation band is thus linked to the historical development of inflation and should therefore be reviewed as necessary. As I see it, the changes now being considered do not entail any change to the monetary policy being conducted. For some time, the CPIF has functioned as the Riksbank’s operational target variable. We are now considering formalising this practice by allowing the inflation target to be defined as an annual change in the CPIF of 2 per cent. The aim of monetary policy will continue to be the stabilisation of inflation at 2 per cent. In other words, the proposed variation band is not a socalled target range. 1 This means that the Riksbank will always strive towards 2 per cent inflation, regardless of whether inflation is inside or outside the variation band. Our deliberations are now being referred for consultation. If we adopt a new target variable and variation band, these changes are expected to be applied as from the autumn. Unusual times create new challenges The Swedish economy is going through unusual times. We have good growth, high resource utilisation and inflation is rising and approaching the target of 2 per cent. But despite good economic activity, monetary policy is still expansionary.
Indeed, the current gloomy mood about the US economy does not seem to be borne out by the most recent economic data – with the value of retail sales up by 7.3% on a year ago in October and manufacturing output up by 6.1% over the same period. Within Europe, a strong performance from the “core” European economies is outweighing the drag from the fiscal and banking problems of some countries on the periphery. The German economy has been particularly resilient, with GDP up nearly 4% on a year ago in the third quarter and unemployment down to its lowest level since 1992. 2  In the year to 1982Q1, GDP in the United Kingdom grew by 2% and in the year to 1993Q2, it grew by 2.1%. In this and subsequent reference to the latest GDP growth data, the figures quoted in the text do not take account of any revisions published in the second GDP release on Wednesday 24th November. 2  BIS Review 158/2010  This strong performance in overseas markets, coupled with a competitive exchange rate, has lifted the volumes of UK non-oil goods exports by close to 15% over the past year and is supporting the rebound we are seeing in the manufacturing industry. Chart 1 shows that overseas markets account for nearly a quarter of the demand for the output of UK businesses, with domestic demand from the private sector – consumer spending and investment – accounting for a further two-thirds.

Andrew Sentance: Getting back to business Speech by Mr Andrew Sentance, Member of the Monetary Policy Committee of the Bank of England, at the lunch hosted by the Bank of England and the Confederation of British Industry (CBI), Belfast, 24 November 2010. *  *  *  I would like to thank Tomasz Wieladek and Matt Corder for research assistance and I am also grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. It is a great pleasure to be back here in Northern Ireland for the fourth time in my capacity as a member of the Monetary Policy Committee. As a former business economist, I greatly value the opportunity to visit individual businesses and meet with business groups in different parts of the UK, as I am doing on this two-day visit to Northern Ireland. And I would like to thank Frances Hill and her colleagues at the Bank’s Northern Ireland Agency for all the work they do with the business community here and for organising this visit. It is over twenty years since I first came to Belfast when I was working for the CBI in the late 1980s. It was so long ago that Nigel Smyth was not yet then the CBI Director here in Northern Ireland! And it may even have been before Nigel joined the CBI as Deputy Director to Alasdair MacLaughlin, over twenty years ago.
It needs to be structured in a way that is subordinate to general creditors, allowing for debt to be bailed in without the disruption of also having to bail in general depositors, or the operational difficulty of having to unpick a large derivatives book. And, for the large, complex international groups, the GLAC needs to be held in the right place so that the resolution plans drawn up in advance can be implemented. Where it is intended that the bank should be resolved at group level, the GLAC needs to be held in the holding company with a mechanism for transferring the loss absorbing capacity it provides to  BIS central bankers’ speeches  5  subsidiaries in other jurisdictions. Where the bank is to be resolved at a local level, the necessary GLAC needs to be held in each jurisdiction, either in subsidiaries or intermediate holding companies. The effectiveness of the legal framework for resolution relies not only on bail-in powers and having something that can be quickly and easily bailed in. It also requires contracts that recognise resolution powers across different jurisdictions. Though domestic and European law will create powers for the resolution authority to adjust the terms of local contracts, the law does not automatically provide for recognition of powers for contracts issued in different jurisdictions. Derivative contracts, in their current form, are a potential show-stopper here.

Faced with such swings in sentiment, I want even more to stress today two ideas that are constant and consistent: (A) the ECB has been an innovative and efficient inflation-targeter, including in the Covid-crisis; (B) beyond Covid, the ECB has a powerful “quartet of tools” to keep its monetary policy as accommodative, and for as long as necessary. A. The ECB as an innovative and efficient inflation targeter In the first part of my remarks, let me try to answer three questions: is the ECB clear in its objective? is it consistent in its instruments? and is it efficient in its results? Page 2 sur 9 I. Is the ECB clear in its objective? For the ECB, like all other major central banks, our inflation objective is our lodestar. That means our definition of price stability should be simple, symmetric, and medium-term oriented. However, not everyone may perceive it this way. Hence, in the context of the Strategy Review launched by Christine Lagarde, we are currently reflecting on whether it can be communicated more clearly. To make it even simpler, we should reexamine the overly sophisticated qualifiers attached to the 2 % figure (“close to but below”). There is no benefit in appearing ambiguous about what we are aiming at. “Symmetric” refers to the fact that our objective is a target and cannot be a ceiling. Looking backwards, a central bank that has been successful in achieving its target on average will have had roughly as many episodes of inflation above its target as below.