samchain/econo-pairs-v1 huggingface dataset:
If developments were to prove much more negative, there is a possibility to proceed with more unconventional measures. 8  BIS Review 66/2009  Figure 1. GDP gap SEK million and percentage deviation from HP-trend respectively, seasonally-adjusted data 1 000 000  5  GDP (left scale) HP trend (left scale) GDP gap (right scale)  900 000  4  800 000  3  700 000  2  600 000  1  500 000  0  400 000  -1  300 000  -2  200 000  -3  100 000  -4 -5  0 80  85  90  95  00  05  10  Note. Trend calculated using the Hodrick-Prescott filter. Broken lines refer to the Riksbank's forecasts. Sources: Statistics Sweden and the Riksbank  Figure 2. Flexprice gap Percentage deviation from HP trend and flexprice output respectively, seasonally-adjusted data 5  5 GDP gap  4  4  Flexprice gap  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3  -3  -4  -4  -5  -5 94  96  98  00  02  04  06  08  Note. Trend calculated using the Hodrick-Prescott filter. Flexprice gap calculated using the Riksbank’s macro model RAM SES. Broken lines refer to the Riksbank's forecasts. Sources: Statistics Sweden and the Riksbank  BIS Review 66/2009  9  Figure 3.

Svante Öberg: Monetary policy and the elusive resource utilisation Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Handelsbanken, Stockholm, 25 May 2009. The original speech, which contains various links to the documents mentioned, can be found on the Sveriges Riksbank’s website. *  *  *  Resource utilisation is falling rapidly and is unusually low. But it is difficult to determine exactly how low it is. And it is difficult to ascertain what consequences the low resource utilisation will have for inflation and monetary policy. These are the questions I intend to discuss in my speech today. I have divided my speech into four parts. I shall begin by discussing the importance of resource utilisation for monetary policy and pointing out the differences as to how the targets for inflation and resource utilisation can be expressed. After that I shall discuss different measures of resource utilisation. I shall go on to describe monetary policy and resource utilisation at present and I shall conclude with a few summarising comments. I wish to make clear from the start that I will not make any new assessment today of the appropriate direction for monetary policy in relation to the Monetary Policy Update that was published at the end of April. I also want to point out that the picture I paint of resource utilisation and monetary policy here is not necessarily shared completely by my colleagues on the Executive Board of the Riksbank.
Through 2006 and into 2007, inflation was lower than expected, but output and employment were higher than expected. Norges Bank has increased its key policy rate by 1½ percentage points in six increments over the past 12 months. By way of introduction, I will take a closer look at the assessments underlying the interest rate decisions. Monetary policy in Norway is oriented towards low and stable inflation. The operational target of monetary policy is annual consumer price inflation of approximately 2½ per cent over time. The objective of low and stable inflation provides the economy with a nominal anchor. In a small, open and decentralised market economy like Norway, and with our particular industry structure, cyclical fluctuations will occur in periods. When economic agents are confident that inflation will be low and stable over time, the interest rate can also be set with a view to dampening fluctuations to some extent. BIS Review 47/2007  1  In Norway, inflation fell sharply as from the latter half of the 1980s. As a 10-year average, inflation is now 2.1 per cent, which is somewhat lower than, but fairly close the target of 2.5 per cent. Annual variability in inflation is considerably lower than in the 1970s and 1980s. Consumer prices vary from one month to the next, partly reflecting wide variations in electricity prices.

The Bank considered that this was due to temporary factors such as the direct effect of earlier reductions in the interest rate on housing costs and some adjustments of indirect taxes and subsidies. The temporary factors were considered to correspond to 0.5 per cent inflation in 1999 and 1 per cent in 2000. However, even taking into consideration the temporary transitional factors, inflation was expected to be less than two per cent in one or two years’ time. The interest rate was therefore reduced to 2.9 per cent, a bit less than the European Central Bank’s repo rate. This illustrates how the Riksbank works. Painstaking inflation forecasts are worked out. The adjustment of monetary policy to reach the inflation target takes place successively without the Bank glancing at monetary policy in other countries, except to the extent that their policies affect the Riksbank’s own inflation forecast. By publication of forecasts, minutes from meetings and taking into account the Riksbank’s explicitly declared objectives, the clients, the Swedish people, through the Riksdag, can evaluate the policies carried out. BIS Review 59/1999  8
Likewise savings in the Middle East have been rising over the past decade and are expected to average about 32% of GDP in coming years. (In 2004, the current account surpluses as percentage of GDP for Asia and the Middle East were about 6% and 14% respectively.) With Asian official foreign currency reserves exceeding $ 2 trillion, and Middle East oil revenues topping $ 180 billion in 2004 alone, the management of surplus savings and reserves in both regions will offer large business opportunities. It will also offer scope for sharing of experience between government investment agencies and central banks in both regions. Besides official savings, there is also a growing number of wealthy individuals in the two regions. Asia alone now has an estimated 2.3 million high net worth individuals (HNWI; people with at least $ 1 million in financial assets), not far behind the US with 2.7 million and Europe with 2.6 million. Asian HNWIs control an estimated $ 7.2 trillion in financial assets. The size of this group in Asia is growing at 7% per year, second only to the Middle Eastern HNWI, now 300,000 which is growing at 9% per year. Traditionally, Asian and Middle Eastern investors have looked to the developed, Western markets to meet their investment needs. But increasingly, they are looking to diversifying their assets globally. It is a interesting new story, that is only beginning to unfold in Asian markets. This is not just a post-9/11 story.

But as we have said time and again in the past, we are not and cannot be immune to what happens outside our borders. We can mitigate its effects, but we cannot avoid them altogether. Therefore, the external situation is likely to have repercussions on our economy and, consequently, on our monetary policy conduct. As I just mentioned, at the August meeting the Board withdrew the tightening bias on the MPR it had communicated in previous minutes, which has reflected in the behavior of market interest rates. The baseline scenario I will be presenting in a moment assumes that the world economy will grow less than we anticipated just three months ago. First-half output figures were pretty  BIS central bankers’ speeches  1  weak in the developed world. Recent financial turmoil could aggravate in the second half of the year. Developed economies’ households continue to tighten their belts in order to reduce their massive debts, but, in turn, this deleveraging process is restraining growth in domestic demand and employment, prolonging balance sheet vulnerability. In addition, the fiscal position of these economies has deteriorated after several years of fiscal deficit. Remedying this situation will call for substantial adjustments in their public finances. Some of them could be done in the medium term, for instance in the United States, while others need immediate action, as is the case in some emerging European economies. In moments of weak private demand, these adjustments could postpone the much expected recovery even further.
Some of the firms that encountered difficulties in 2008 paid out large bonuses early in 2008 despite the deterioration in market conditions and in their own financial performance. There is an opportunity to rethink capital preservation policies to ensure that banks’ incentives are consistent with the supervisory objectives of a safe and sound banking system. Such capital conservation rules could operate on both sides of an economic downturn – conserving capital going into the downturn and rebuilding capital coming out. One example would be the imposition of constraints on the ability of banks to reinstate or increase dividends prematurely or to undertake share buybacks during a downturn or during the early stages of an economic recovery. Higher capital requirement for systemically important institutions Currently, some large systemically important institutions may have a competitive advantage because they are perceived to be “too big to fail.” Unless we address this disparity, we will have an ongoing moral hazard problem and inevitable market structure distortions as institutions take steps to become systemically important in order to gain a competitive advantage. The regulatory regime could lean against this in two ways. First, we could improve the resolution mechanisms for large, complex institutions and thereby reduce the costs associated with failure. A more robust resolution regime would make it more feasible to allow the failure of a large financial institution without that failure threatening the stability of the entire financial system.

The economy is probably approaching a normal rate of capacity utilisation. When inflation increases from a very low level, this will provide a basis for gradually moving towards a more normal short- term interest rate level in Norway. This may counter excessive credit growth and excessive pressures on domestic resources in the medium term. Interest rate developments abroad may have a considerable influence on movements in the krone exchange rate. The inflation outlook in Norway implies that Norway will not be the frontrunner when other countries increase interest rates. Interest rates were left unchanged at Norges Bank’s Executive Board meeting on 26 May 2004. Norges Bank’s key interest rate, the sight deposit rate, therefore remains at 1.75 per cent. According to Norges Bank’s assessment, with a sight deposit rate of 1.75 per cent at present, the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher. 3  Adjusted for the effect of the interest rate’s direct impact on house rents, changes in parental payments to day-care centres and for special factors relating to indirect tax changes earlier in the year. 4  Seasonally adjusted, three-month moving average recalculated as an annual rate. 6  BIS Review 34/2004
Given the restrictions on mobility, the latter have not only been unable to do business as usual, but have also been unable to fulfill their traditional role of cushioning this type of situation and probably explain a significant part of the unusual increase in inactivity (Figure 6). By sector, the fall has been widespread, especially in retail, construction and housing, and food services. What we see in Chile is replicated in many countries, although with varying intensity. Depending on countryspecific conditions, there have been sharp falls in employment, significant decreases in hours worked and 2  increased inactivity (Figure 7). According to the International Labor Organization (ILO), compared to the last quarter of 2019, in the second quarter of this year hours worked fell 14% globally—the equivalent to 400 million full-time jobs. The decline has been led by South America (-20.6%), where inactivity has grown substantially. For the remainder of 2020, the ILO anticipates that, globally, hours worked will continue to remain below prepandemic levels. In Chile, the reduction in labor income has continued to be reflected in the evolution of nominal wages and total hours worked (National Statistics Institute, INE), both remaining around their historical lows.

Table 5  CBC’s exceptional measures to address (current and potential) high-volatility episodes (*)  PROGRAMS  (weekly follow-up)  SPOT NDF SWAP REPO REPURCHASE BANK BONDS 1 BANK BONDS 2 CC-VP DP FCIC 1 FCIC 2  November 2 3 4  December 1 2 3 4  1  January 2 3 4  5  February 1 2 3 4  Lowest value of the series (in CLP)  1  March 2 3  4  1  2  April 3 4  50th percentile of the series  5  1  May 2 3  4  1  2  June 3 4  5  1  July 2 3  4  August 1 2  Highest value of the series (in CLP)  (*) Each measure (row) is an independent sample to code the colors and shows the intensity of each measure by itself calculated using all the available numbers of the series. 23
If inflation falls, central banks will have even less room to maneuver when faced with a slowdown.4  A Fresh Approach All this begs the question: what can we do to prepare ourselves and our economies for the next 2/3  BIS central bankers' speeches  crisis? There’s no single silver bullet that can solve these challenges. But changes to monetary, fiscal, and other economic policies could all help us become more resilient. Starting with monetary policy, central banks should reassess their strategies, goals, and the tools they use to achieve them.5 This might include things like reassessing how we achieve our 2 percent goal. Outside of monetary policy, there are a number of ways fiscal policy can support an economy. One is to strengthen the “automatic stabilizers,” which, in a downturn, reduce taxes without legislation to stimulate growth. Another is to use regulation to enhance financial stability. Finally, fiscal and other economic policies can attack the sources of slow growth and low r-star directly. Demographics are not an area where most economists, or policy makers, want to meddle—and I’m certainly not going to stand here and say people should stop living so long! But there are things we can do to improve long-run growth. These include raising public and private investment in human and physical capital, infrastructure, and science and technology, as well as removing barriers to participation in the labor force and the economy more broadly. It’s impossible to predict the future. But we can deal with the present.

Rekha Chifuwe Mhango: 2021 findings of the private sector foreign investment and investor perception survey Speech by Mrs Rekha Chifuwe Mhango, Deputy Governor (Administration) of the Bank of Zambia, at the virtual dissemination workshop of the 2021 findings of the private sector foreign investment and investor perception survey, Lusaka, 15 December 2021. * * * It is my great pleasure to welcome you all to this virtual dissemination workshop of the results of the private sector foreign investment and investor perception survey undertaken in 2021. The ongoing global health crisis has demonstrated the crucial contribution of technology and innovation to addressing challenges brought about by covid-19. In this regard, this workshop is being held virtually to allow participants follow deliberations from the safety of their own space. We are grateful to you all for finding time to join this virtual meeting. In light of the covid-19 pandemic, we considered alternative ways of using remote methods to undertake the survey and I am pleased to inform you that the 2021 survey was conducted virtually. The Bank of Zambia, Zambia Development Agency, Zambia Statistics Agency and other collaborating institutions are greatly indebted to the respondents who participated in the survey. We truly appreciate your dedication and support. Let me take this opportunity to thank the balance of payments technical committee comprising the Zambia Statistics Agency, Zambia Development Agency, Bank of Zambia, and other collaborating institutions for successfully conducting the 2021 survey.
The exceptionally accommodative monetary policy seen internationally, which has intentionally increased the amount of cash available for the purchase of risky assets, may have masked the underlying liquidity risk characteristics in a number of markets, including advanced economy high-yield and emerging market economy bonds. This is almost certainly one factor behind the apparent disconnect between market participants’ concerns about the fragility of liquidity and the current low level of liquidity premia. Second, financial intermediaries and financial engineering can make a very important contribution to liquidity – but they cannot turn lead into gold. The underlying risk characteristics of an asset cannot be changed. They can be separated out, combined with other risks, repackaged. And that is important. Because although the liquidity risks generated by the underlying characteristics of an asset cannot be changed, they can be structured to enable the risk to be held by those most able to bear it. This doesn’t change the underlying risks but it does change the impact if they crystallise. 4  BIS central bankers’ speeches  However, if the effect of financial intermediation and financial engineering to increase liquidity is not to distribute liquidity risk to those most willing and able to bear it but rather to obscure it, then it contributes only to the illusion of liquidity that can evaporate very quickly and painfully. Market making, securitisation and exchange traded funds (ETFs) illustrate the balance to be struck. 1. Securitisation technology allows securities to be much more easily tradable than the assets underlying them.

But as we know, in the crisis, a sizeable proportion of these assets turned out to be complex, opaque and exposed to tail risk – so under stress, these markets broke down catastrophically and have yet to fully recover. This has prompted the regulatory authorities to develop new criteria around securitisation that, among other things, may bolster their liquidity in the future. 2. ETFs are another form of financial engineering that have grown rapidly over the past decade or so – from a small base in the early 2000s to more than $ trillion today. Equity funds still comprise the majority of ETFs. But the share of fixed income ETFs, in which the underlying assets are much less liquid, has grown substantially – in Europe, from around 5% in the early 2000s to around 25% today. ETFs are exchange traded, they offer investors liquidity. Prices of ETFs are usually kept in line with the assets they track by market participants being willing and able to transact in the shares they issue and the underlying securities. But in times of stress not only can their liquidity characteristics revert back to that of their underlying assets, they can also trade at a discount to the value of these assets. We saw some of this effect in the market turmoil last summer. We need to understand better why these effects happened and the circumstances in which they could reoccur. 3. And market making itself is another example.
Another benefit that this initiative entailed, was that it paved the way for several banks and corporates to also issue international bonds, thereby accessing savings from outside the country. By doing that, we had also been able to bridge the chronic savings/investment gap that has been regularly referred to by a never ending stream of experts since independence, as a major deficiency that was hampering growth in our economy. Case Study 3: Intervention to stabilize a systemically important bank The third case study that I would like to illustrate is the instance where the Central Bank and the Ministry of Finance teamed up to stabilize a systemically important bank that was facing a liquidity crisis in late 2008/early 2009. Mr. Chairman, If we take our minds back to that period, in late 2008, we would recollect that the external environment, internationally and locally, had become even more hostile and highly uncertain. Internationally, the global financial crisis had taken a major toll, with hundreds of banks collapsing across the world. Each day, we were hearing about the collapse or the imminent failure of many big names in the global financial landscape. In many countries, the Ministers of Finance and the Governors of the Central Banks were huddled in endless discussions as to what should be done to arrest the crises, or how to stop the bleeding. Businesses were going bankrupt by the thousands. Business confidence level was at rock bottom. People in all parts of the world were in panic.

Case Study 4: The creation of our present day “virtuous cycle” Mr. Chairman, I would like to now place before you, yet another significant example of harmonization between the Monetary and Fiscal policies, which led to the creation of a new “virtuous cycle” in relation to inflation, interest rates, investor confidence and sustained growth, in our country. As we are all aware, Sri Lanka had been long trapped in a “vicious cycle” of high fiscal deficits leading to high inflation; high inflation leading to high interest rates; high interest rates leading to low investor confidence; low investor confidence leading to sluggish investment; sluggish investment leading to low growth; low growth leading to high debt; and high debt once again leading to high fiscal deficits. This was the vicious cycle that we had been trapped, for more than 5 decades since independence. It is true that we have had one-off spurts of high growth or short periods of low inflation at various times in our history. However, we have to acknowledge that, other than in 2010 and 2011, we have never had over 8% growth in consecutive years, or, for that matter, been even able to record an average growth of over 5% over a 5 year period, prior to 2006! At the same time, other than the period February 2009, till now, Sri Lanka had never enjoyed a period of even two continuous years of single digit inflation, and, believe it or not, our level of average inflation was over 12% prior to that!
The challenge will be deciding on the best option, not in finding a workable approach. Thank you for your attention. I am happy to take any questions. BIS Review 48/2009  5

And lastly, by mobilising our financial resources: Europe has the largest pool of private savings in the world, with more than EUR 300 billion of excess savings invested outside the region each year, but our venture capital market, and more broadly our equity financing market, are underdeveloped compared with the United States. In the financial sector, the bigtechs have the potential to cause a genuine “Big Bang”: they have a strong brand image, a global client base and privileged access to new technologies. Of course, financial regulation needs to remain neutral vis-à-vis technology: the principle of “same activity, same rules” needs to be applied to maintain a level playing field for all players. But we need to increase international cooperation in four key areas of the regulation of digital finance: (i) cyber-security; (ii) data protection; (iii) preserving competition in the face of the risk of ultra-dominant networks and private monopolies; and (iv) fair cross-border taxation. Facebook’s Libra is a prime example of a case where cooperation is imperative. The G7 under the French presidency underlined the challenge this poses for sovereignty, and wants to address some “serious regulatory and systemic concerns” vi before such projects can be implemented. II. Boldly seizing the opportunity of a social, environmental and multilateral model. I now come to my provocation, or rather what should be our boldness. To this uncertain, troubled, disruptive, and uncooperative world, does Europe have nothing to offer?