samchain/econo-pairs-v1 huggingface dataset:
This assumption is important from the point of view of monetary policy because, combined with other elements, it allows to estimate the size of capacity gaps and the resulting inflationary pressures. After assessing all the data at hand, we estimate that Chile’s medium-term growth is in the 4 to 4.5 percent range, less than we previously thought. The slower growth foreseen in investment and total factor productivity explain a large part of this revision. Medium-term growth declines are a natural process as the economy attains higher per capita income levels. Still, we believe that Chile has available some measures that could moderate this phenomenon. As I said, part of the revision has to do with the expected slowdown in investment. One argument that is usually put forward to explain the lower investment is rising energy costs and difficulties to materialize investments, despite having all permits required by the relevant institutions. From the Central Bank we have stressed time and again how important it is for the country’s development to have well-defined policies that will allow over time to cut down the cost of such an important input. The Government recently launched an energy agenda with certainly ambitious goals, and hopefully we will see advances in that direction, which should translate into further development of our country. Another way to raise our potential output is by investing in infrastructure works. BIS central bankers’ speeches  3  In the past few years, our economy has shown a decline in total factor productivity.

It is worth referring here to Regulation No 2560/2001 of the European Commission, which established the principle of equal charges for cross-border payments and comparable domestic payments within the EU, which in turn has created an imbalance between bank fees and costs of cross-border payments. This imbalance can only be overcome if the handling of cross-border payments is reorganised to become as efficient and inexpensive as the handling of national payments, which is the primary goal of SEPA. An aspect which deserves particular attention in the discussion on SEPA is the harmonisation of the law within the payment area. The proposed Payment Services Directive (PSD) establishes the necessary legal framework for SEPA payments and will also apply to existing national payment products. The aim of the Directive is to harmonise the market access requirements for non-bank payment service providers. This will create a level playing field with enhanced competition in national markets. The Directive will provide clarity and certainty with regard to the core rights and obligations of users and providers of payment services. It will also provide the necessary legal framework for SEPA, as it will harmonise existing, and differing, national legal requirements.
For instance, the weighted average lending base rate dropped to 29.8% in June 2004 from 39.6% in August 2003. This action was consistent with Government’s objective to ensure increased credit to priority sectors such as agriculture. I am glad to inform the conference participants that a noticeable increase in credit to key growth sectors namely agriculture, tourism, manufacturing and mining has been recorded since this policy action by the Bank. This process has been greatly assisted by a significant reduction in Government borrowing from the banking sector. In its continued effort to develop a fully functional foreign exchange market, in July last year the Bank established a broad-based inter-bank foreign exchange management (IFEM) system as the new mechanism for determining the exchange rate in Zambia. Under this system market making has been transferred to commercial banks with the Bank performing mainly an oversight role. Coupled with favourable developments in exports, the IFEM has to-date yielded encouraging results as evidenced in the relative stability of the Kwacha against currencies of most major trading partners. Mr President, Ladies and Gentlemen, one area that has seen remarkable reforms is that of the payment systems in Zambia, for which the Bank has been actively involved. These reforms include the establishment in September 1999 of the Zambia Electronic Clearing House Limited which provides a speedier mechanism of clearing funds to customers. It also reduces the risk of errors during processing of payments.

To the contrary, during the current liberalization period, which commenced with vigor in 1992, the Bank, in conformity with market reforms, has steadily moved towards the use of market-based structures and systems as opposed to direct instruments in the conduct of its monetary policy. In this  BIS Review 48/2004  1  regard, and beginning 1993, deregulation of interest rates, removal of capital controls and freeing of the foreign exchange market were implemented as part of the broader financial sector reforms. As a result, through the use of mainly market-based instruments of monetary policy, the Bank has made several notable achievements. Amongst these, has been its contribution to the reduction of annual inflation to 17.2% in December 2003 from 197.0% at the end of December 1992. Further, inflation has remained just under 20% in the first half of 2004 and it is the Bank’s desire to see single digit inflation within the foreseeable future. The benefits of lower inflation in single digits can not be over-emphasized, especially with regard to the fight against poverty. Madam Chairperson, last October the Bank took a bold stand of effecting a down-ward adjustment in the statutory reserve ratio to 14.0% from 17.5 % on both Kwacha and foreign currency deposit liabilities. This was intended to release funds to commercial banks. The outcome of this policy action has been increased loanable funds being available to commercial banks. This in turn has greatly contributed to the downward trend in lending rates in the economy.
We are very satisfied with our strategy and with the fact that it has given appropriate and effective guidance to monetary policy decisions. Let me also assure you that there will be no change in our firm commitment to our overriding objective of maintaining price stability over the medium term, i.e. avoiding both inflation and deflation. Indeed, this could not be otherwise, since the achievement of the price stability objective is at the core of our mandate in the Treaty. 2. The ECB Recommendation on the adjustment of voting modalities in the Governing Council  On 3 February 2003, the Governing Council adopted a recommendation on the adjustment of its voting modalities, which will prepare the Governing Council for a future expansion of the euro area. With the timely submission of this recommendation, and a hopefully rapid completion of the overall procedure, we hope to preclude any uncertainty about the continued effectiveness of the ECB's governance structures in view of a future expansion of the euro area. In this context, I should like to emphasise how much I appreciate your Committee's efforts to respect an ambitious timetable in order to present in good time the Opinion of the European Parliament as foreseen by the Treaty. As you are aware, the task of coming up with a new voting system presented the Governing Council with a formidable challenge.

The Governing Council supports the steps taken by the Commission to maintain the functioning of the framework, including the implementation of excessive deficit procedures and the issuing of early warnings, where required. Furthermore, I should also like to stress that it is the implementation of structural reforms at the micro level that ultimately raises the production potential in the euro area. By improving flexibility in the economy and making the euro area more resilient to external shocks, structural reforms will also reduce the high level of unemployment. The slow progress in structural reform is one of the key factors currently hampering a recovery in confidence. Against this background, the Governing Council welcomes the recent communication by the Commission on the implementation of the Broad Economic Policy Guidelines. Renewed momentum in the process of structural reform will not only be crucial to foster confidence among consumers and investors in long-term growth and employment opportunities in the euro area, but it should also have a positive effect on spending and investment decisions in the short and medium term. Finally, I should like to mention that after four years of practice with our monetary policy strategy, the Governing Council has considered that it is the appropriate point in time to take stock of our experience so far and to reflect on the various elements of the strategy. All this does not necessarily imply that we see a need for any changes.
Moreover, it is important to recognize that there are also significant risks from waiting longer to lift off. Upside forecast errors are also certainly possible. For example, while the pace of growth has generally been weaker than expected in recent years, the pace of labor market improvement has generally been stronger. By waiting, we would increase the risk that we would need to raise rates more aggressively in the future. This could unduly threaten the economic expansion. In balancing these risks, relatively “early and slow” seems like a better strategy than “late and fast” – especially when one is uncertain both about the degree of accommodation being provided by monetary policy and the level of unemployment consistent with our price stability mandate. Because monetary policy works with a lag, policy normalization needs to begin before the economy reaches its employment and inflation objectives. That is, if we are to get to a neutral monetary policy setting before inflation materially overshoots our 2 percent objective, then we need to get started. Once underway, the pace of policy tightening can be calibrated to how the economy and financial market conditions are responding. A particular risk of late and fast is that the unemployment rate could significantly undershoot the level consistent with price stability. If this occurred, then inflation would likely rise above our objective. At that point, history shows it is very difficult to push the unemployment rate back up just a little bit in order to contain inflation pressures.

That stance combines an exceptionally low policy interest rate – the federal funds rate in a range of 0 to 25 basis points – with forward guidance indicating that this range would be appropriate at least as long as the unemployment rate remains above 6½ percent, inflation is projected to be no more than 2½ percent between one and two years in the future, and inflation expectations remain well anchored. Moreover, to support a stronger economic recovery, the FOMC is purchasing Treasury securities at a rate of $ billion per month and agency mortgage-backed securities (MBS) at a rate of $ billion per month, and has stated its intention to continue purchasing assets until it sees substantial improvement in the outlook for the labor market, conditional on ongoing assessment of benefits and costs. Combined, these actions are intended to ease financial conditions and thereby help to establish a selfsustaining economic expansion. Turning to recent developments, incoming data on the U.S. economy have been mixed of late. Based on the advance estimate, real GDP declined slightly in the final quarter of 2012, which was below the consensus expectations of an increase of around one percent. In addition, in January payroll employment rose by just 157,000, below the 200,000 average monthly gain in the fourth quarter, and the unemployment rate edged up to 7.9 percent. Offsetting these soft indicators, we see evidence beneath the surface that private demand firmed in the final months of 2012 and has been reasonably well maintained thus far this year.
The growing importance of transparency and corporate responsibility is not restricted to the accounting realm. Indeed, corporate governance is a key aspect in all financial systems. This is acknowledged by the Basel Committee on Banking Supervision, which has approved a specific guide for deposit institutions. The guide seeks to complement other codes, placing particular emphasis on organisational, risk-control and transparency aspects. Growing cross-industry and cross-country integration also has consequences for supervisors, who can increasingly less exercise their powers in isolation. Accordingly, national supervisory activity should  10  BIS Review 60/2006  best form part of the set of initiatives and activities at the international level, especially the activities of the Basel Committee on Banking Supervision and the Committee of European Banking Supervisors, which were both chaired in 2005 by the Banco de España. Once the chapter dedicated to the capital framework and the trading book was concluded in July 2005, both Committees directed their efforts at supervisory co-operation and at enhancing consistency of implementation, thus supporting the idea that a regulatory pause might improve the quality of implementation of this regulation. The call for regulatory convergence to be accompanied by a convergence of supervisory practices is particularly intense in the EU. Fora such as the Basel Committee’s AIG (Accord Implementation Group) or the CEBS (Committee of European Banking Supervisors) in the EU are a response to this call.

Nevertheless, the intent of the Central Bank to maintain inflation at mid-single digit levels, which was made clear through action as well as through communication, enabled the Central Bank to change the mindset of the people that Sri Lanka is typically an economy with double digit inflation. The change in the mindset was visible in improving inflation expectations. Since February 2009, inflation has remained in single digits, and 105 consecutive months of single digit inflation is considered an achievement in the recent history of Central Banking in Sri Lanka. 14  Infeasibility of Monetary Aggregate Targeting However, Sri Lanka’s achievement of single digit inflation for 105 consecutive months had little to do with monetary aggregate targeting. From July 2009 to September 2017, the year-on-year broad money growth was, on average, 17.1 per cent. Year-on-year inflation during the same period averaged 5.2 per cent. Based on the earlier discussed Fisher’s Quantity Theory of Money, the gap between these two figures, that is 11.9 per cent, must reflect average real economic growth during this period. However, real economic growth averaged only 6.0 per cent during this period. If the argument is reversed, there is a gap of 11.1 per cent between broad money growth and real economic growth. According to the Quantity Theory, this should reflect average inflation during the period, which was not the case.
Fernando Restoy: The Banking Union – achievements and challenges Speech by Mr Fernando Restoy, Deputy Governor of the Bank of Spain, at the closure of the presentation of the third report on the Banking Union “La Unión Bancaria: suma y sigue”, organised by Centro de Sector Financiero PwC and IE Business School, Madrid, 2 December 2015. * 1. *  *  Introduction  Let me begin by thanking the organisers, both PWC and the Instituto de Empresa, for their kind invitation to participate in the closure of this presentation of the third report on the Banking Union. We can hardly overstate the importance of the Banking Union for the European construction project and, in particular, for ensuring the sound working of Economic and Monetary Union (EMU). A true monetary union among sovereign States is not confined to the use of the same banknotes and coins in each country, nor to the denomination of trade transactions with the same metric. Monetary union requires the conditions in which liquidity is exchanged to be homogeneous across the entire area. Insofar as these exchanges are typically intermediated by financial institutions, by means of whose liabilities trade and financial transactions are settled, the appropriate flow of liquidity within a monetary union demands that the risk associated with these liabilities should not depend on the location of the institution issuing them.

I trust that this agreement, once it is finally approved by the ECB, may be implemented in the opening months of 2016 and that, in any event, future revisions of European legislation will envisage less room for discretion on the part of the Member States, so that the singleness of the relevant legal framework for banking activity throughout the EU may become firmly anchored. To wrap up this first part of my speech, allow me to highlight certain relevant decisions taken by the Supervisory Board during this first year. Among the most important are those relating to the Supervisory Review and Evaluation Process (SREP), which has for the first time been carried out with a common methodology for all SSM banks. This process, which includes both quantitative and qualitative aspects, determines the risk profile of each significant institution, the sufficiency of its liquidity and solvency in terms of this profile and, finally, it sets the minimum capital levels to be maintained. The decisions on capital, the adoption of which for 2016 will be shortly formalised, will, for all the SSM’s significant institutions, entail average capital requirements somewhat higher than those of the previous year: around 30 basis points (bp), rising to 50 bp if the impact of the phasing-in of the capital buffers envisaged in European legislation is taken into account.
For some of the banks, the sources of financing of the credit activity were limited, acting as drag on their credit activity. Hence, the exploration of the individual bank data indicated that there are various reasons why the monetary measures do not yield the expected results and that different solutions are relevant for different banks. Lending survey has been widely recognized as an important source of relevant data on the credit market. In the midstream of the crisis, in particular, not only central banks, but also some international institutions started to conduct lending surveys to tackle the potential structural rigidities, precluding more rapid credit growth. In the case of Macedonia, we are running lending surveys since 2006. Ever since these alternative “soft” data have been an auxiliary, but at the same time a very important information source allowing us to detect the paths of the demand and supply of credits, the main determinants driving the two, but also the banks’ vision on the future developments. Very often, as policymakers, we go beyond the aggregate results and screen the results of the survey either by observing individual banks data, or data by group of banks (large, medium, small), as their behavior might differ significantly and can “be lost under the mask of the average”. This helps in better understanding the monetary policy shocks of different types of financial institutions (small/large, foreign/domestic, across different business models).

Anita Angelovska-Bezoska: Statistical implications of the new financial landscape Remarks by Ms Anita Angelovska-Bezoska, Vice-Governor of the National Bank of the Republic of Macedonia, at a panel discussion at the 8th IFC Conference “Statistical implications of the new financial landscape”, Bank for International Settlements, Basel, 8–9 September 2016. *  *  *  Contributors to the note: Ana Mitreska and Maja Andreevska. Since the burst of the crisis, central banking community has been providing unprecedented monetary stimulus with a view of influencing financial conditions and thus reviving the growth. The measures have gone far beyond the pre-crisis mode of operation. If conducting a monetary policy in the pre-crisis period seemed like steering a ship with rudder being enough powerful to protect against the waves, the waves that emerged in 2007–2008 were too strong and reliance only on the traditional instrument posed a risk of sinking. Thus, when the central banks approached/reached zero-lower bound, they were compelled to start experimenting with new policy tools such as balance sheet policies, forward guidance and in more recent period, even more extremely, with negative policy interest rate. Has this monetary accommodation served the purpose of influencing the financial and economic conditions? While there is ample evidence that the measures have succeeded in influencing financing conditions, so far there is not strong empirical evidence on their impact on output and inflation. In fact, despite the ample liquid and ultra-low interest rates, the output growth remains weak and inflation stubbornly low pointing to a weak monetary transmission mechanism.
Monetary policy, by contrast, is strengthened by this. Acting through the expectations channel, it can have a lasting effect on the expected flows of financial revenue. Affecting the real rate of intertemporal discount, it can deeply affect decisions on savings and consumption. The definition of the objective is now wider. Price stability has become an essential parameter in defining and measuring prosperity. From taking a relaxed approach to inflation and considering it secondary, nowadays low and predictable inflation is a pre-eminent criterion of economic performance. Why? High inflation hits savings – and therefore investment and future consumption – with a tax on real returns that rewards the risk of uncertain inflation. Low inflation, however, frees up resources that individual choices can allocate to increasing the fixed capital. A policy that neglects inflation gradually destabilises the economy. The costs of uncertainty about the value of the money, initially unimportant, then overlooked, subsequently become evident, and then are judged intolerable. At that point, voters express a strong preference for policies that promise rapid disinflation. But such policies impose high costs in terms of job losses, which have to be included in the dynamic calculation of the costs of inflation. Also, it should not be forgotten that inflation affects the poor more than the rich, and is therefore a tax on the weaker members of society.

Although we have seen significant improvements in the macroeconomic indicators, the levels of interest rates still remain high. This is a major concern to the Bank of Zambia and we have continued to engage banks through the Bankers Association of Zambia on this issue. Ladies and Gentlemen, it is worth mentioning here that one of the challenges that banks continue to face is the high levels of non-performing loans due to poor credit culture amongst some borrowers. It is therefore important that credit worthy customers are distinguished from  BIS Review 30/2010  1  high risky borrowers in the banking sector. The Bank of Zambia through the Financial Sector Development Plan has in this regard established the credit reference bureau. The credit reference bureau will enable lenders to make decision based on information specific to each borrower ensuring that risk assessments of potential borrowers are not affected by the habits of other borrowers. Therefore, the pricing of risk will be more reflective of borrower’s particular circumstances. Further, the Bank of Zambia has made it mandatory for banks and other financial service providers to use the credit reference bureau before a loan is provided to any customer. Consequently any loans approved without passing through the Credit Reference Bureau will attract regulatory action. The Bank of Zambia also places great importance on the need to have knowledgeable consumers who play a key role in creating a competitive and fair business environment.