samchain/econo-pairs-v1 huggingface dataset:
Fritz Zurbrügg: Financial markets, the management of Swiss currency reserves and interest rate benchmark reforms Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 12 December 2013. *  *  *  I will begin today by looking at the situation on the financial markets. Then I will talk briefly about developments in our foreign exchange holdings. I will close with a few comments on the progress that has been made in reforming interest rate benchmarks at both international and national level. Situation on financial markets Since our last media news conference in June, the positive risk sentiment on financial markets has been largely maintained, as is evident from the soaring share prices, among other things. In the past few weeks, the key US indices Dow Jones and S&P 500 have reached new record levels, thereby exceeding the peaks attained prior to the global financial crisis. In addition, Japan’s Nikkei Index and the most important western European stock exchange indices, including the Swiss SMI, have again recorded significant gains in recent months. Despite all the euphoria on the stock exchanges, we must not forget that it is not only the improvement in the economic outlook but also the continuation of the very expansionary monetary policy around the world which is behind this positive risk sentiment.

Mr Nyberg comments on how EMU may affect the Swedish housing loan market and its financing  Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at Föreningssparbanken in Warsaw on 14 October 1999. *  *  *  Thank you for giving me the opportunity to come here and give some points of view on how EMU may affect the Swedish housing loan market and its financing. This is undeniably an issue which we have every reason to take an interest in whether we take part in the monetary union or not. One of the ideas with EMU is to create a more efficient market for goods and services where competition is increasing and consumers obtain better products at lower prices. In the housing loan market, this should mean that borrowers expect a greater range of products, more suppliers and lower interest rates. How should the Swedish housing loan institutions handle this challenge? Competition for customers As we know, the national housing loan markets in Europe look rather different, which is illustrated by the following diagram (figure 1). In countries such as Germany, Denmark, Sweden, the Netherlands and the United Kingdom, the total outstanding stock of loans with mortgages in property totalled over 50% of GDP. In other countries, including Greece and Italy, the equivalent figure is under 10%. The differences depend on factors such as the systems of rules, tax legislation and market structure which vary from country to country.
The implementation of quick and concrete measures, which guarantee the long-term stability of public debt, seems that shall condition considerably the future development. World financial markets have reacted tensely against these developments, being characterised by a high volatility and an increase of risk primes throughout the instruments variety, markets and financial agents. Turning to the domestic economy, the latest qualitative and quantitative indicators show a slow performance of economy in the early months of 2010. The deceleration of domestic demand is compensated by a positive and growing performance of the Albanian exports. The domestic inflationary pressures were low and the consumer price inflation declining. Monetary markets revealed more calm, characterised by a dropping trend of interest rates, liquidity situation improvement of the banking system and a more stable performance of the exchange rate. However, lending to economy continues to maintain low growth paces. Indirect and prior estimates suggest that the paces of private consumption have been controlled, conditioned by restricted sources of its financing and by the higher tendency of consumers regarding savings. The low level of capacities utilisation in economy, the low paces of loan for investments and the fall of capital and intermediate goods import, signal a contraction of private investments even during the first three months of this year. The demand for monetary assets of private sector continues to be low, thus reflecting a deceleration of the economic activity. The annual pace of lending growth, excluding the exchange rate effect, for this sector slowed down onwards, at 4.8 percent in March.

Ardian Fullani: Economy and key interest rate in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on monetary policy decision-making of the Supervisory Council of the Bank of Albania, Tirana, 26 May 2010. *  *  *  The Supervisory Council of the Bank of Albania on its meeting of 26 May, 2010 reviewed and approved the Monetary Policy Monthly Report. Taking into account all the latest economic and financial development at home and their projections on the future, at the conclusion of discussions, the Supervisory Council of the Bank of Albania decided to leave the key interest rate unchanged, at 5.25 percent. *** The improvement of the world economic activity, as shown by the sharp growth of the emerging countries’ economies and by the moderate rise of the major part of developed countries’ economies, has characterised the early months of 2010. Economic recovery is accompanied by the increase of trade activity, in the meantime central banks and fiscal authorities have pursued to support the aggregate demand through easing policies. Notwithstanding the climbing trend of commodities prices, the inflationary pressures continue to be still low owing to the negative gap of production. However, the events occurring in the last weeks have revealed that both euro area and world economies are characterised by high uncertainties as regard the future. The economic and political discussions are particularly focused on the fiscal situation.
This leads me to another point mentioned in the draft resolution, namely the importance for a central bank to take account of asset prices when assessing risks to price stability, while not introducing moral hazard in financial markets through inappropriate reactions to excessive asset price developments. The ECB fully shares this view. It closely monitors asset price developments as indicators for monetary policy but it does not target them or react to them mechanically. As regards the proposed endorsement of macroeconomic projections by the Governing Council of the ECB, allow me to clarify once again the role of those projections in the process of monetary policymaking at the ECB. These projections play an important role for us, but they have by no means an all-encompassing role. They are an important technical input by ECB and national central bank staff in summarising and assessing the implications of a large body of information for future inflation in a consistent way. However, we are also fully aware of the difficulties of making projections. In particular, we recognise that it is impossible to summarise all the relevant information for assessing the maintenance of price stability in one single projection. Given the difficulties of forecasting over the longer term and the uncertainty regarding the appropriate economic model, we do not advocate the use of a single projection to analyse the risks to price stability.

Economic policy arena: fiscal policy and the employment markets The success of Monetary Union and the future of Europe will also depend on fiscal and structural policies in the Member States significantly improving the structural conditions for further economic development and, in particular, employment developments. As is evident from the waning  BIS Review 99/1999  4  consolidation efforts following the beginning of Monetary Union and the continuing high level of unemployment, in general, the initial experiences in this area were rather disappointing. Most Member States are currently still very far from meeting the medium-term requirement for a balanced budget laid down in the Stability and Growth Pact. The measures currently planned are, for the most part, insufficient to achieve a sustained reduction in the long-term structural deficits. This problem is becoming particularly obvious given the current low interest rates in the euro area, which have, in themselves, tended to increase the scope for fiscal consolidation. In view of the relatively positive economic outlook for the euro area, fiscal policy should be taking advantage of this opportunity to make cuts in expenditure in order to achieve a more sound fiscal policy in the medium term. The high level of unemployment in Europe is primarily of a structural nature, which is evident when a comparison is made with the United States.
By now all persons, goods, services and capital can move freely from one country to another. This is the case for France and Germany. Trade is a good example of this integration. The share of French imports coming from Germany is currently about 19%, while the share of German imports coming from France is about 15%. Each country is the other's first trading partner. Beyond these gross figures, it is interesting to note that this trade is largely made of complementary goods as opposed to substitutable goods, thus increasing interdependence. This interdependence is not only commercial, it is more generally macroeconomic. Econometric work has indeed shown that French and German GDPs are closely correlated. This means that national economic policies cannot deviate excessively from each other. These foundations progressively convinced France and Germany that they needed a common monetary destiny As I said earlier, the collapse of the Bretton Woods system led European Governements to organize monetary relations between each other. France and Germany were among the most prominent actors in this strategy. I personally see two main elements in this common destiny: the creation of the European monetary system (EMS) in 1979 and the emergence of a conceptual convergence between our two countries as regards monetary issues. The creation of the European Monetary System in March 1979 highlights best the cooperation between France and Germany.

We must push for building a forward-looking approach of the impacts of climate risks through the development of comprehensive climate stress tests. Third, green finance should mature and upgrade its professional standards. Financing needs for energy transition are huge; in Europe alone, it is estimated that an additional EUR 177 billion per year will be necessary over the period 2021-2030 to reach the EU’s energy and climate objectives for 2030. i The European Green Bond Standard proposed by the TEG should ultimately help to further develop the green bond market and channel more investments towards green projects. Let me add that France has strengthened its role as leader in green finance. Last week, Paris Financial Centre players have committed themselves to adopt a carbon exit strategy by mid-2020. ** To conclude, let me quote John F. Kennedy: “the New Frontier of which I speak is not a set of promises – it is a set of challenges. […] I believe the times demand new invention, innovation, imagination, decision. I am asking each of you to be pioneers on that New Frontier.ii” Today, almost 60 years later, we face other challenges. But let us keep the same energy. Let us not think that the battles have already been lost. Let us break limits and invent new practices taking into account both digitalisation and climate change. Thank you for your attention.
Overly stringent regulation normally leads to more expensive financial services, which affects resource utilisation. The stringent regulation of financial markets in the 1960s and 1970s gave us a relatively stable financial system, but at the expense of efficiency. On the other hand, deregulation brought about developments on financial markets which created a “seemingly efficient” system, but which gave rise to major risks to stability. The development over recent years has shown just how closely interlinked the tasks of the central banks are. For example, the emergence of a situation of financial instability also has  BIS central bankers’ speeches  1  repercussions for both inflation and resource utilisation. This illustrates that it is not possible to conduct monetary policy and financial stability policy completely separately. Differences in time horizons give rise to trade-offs We can also describe the central banks’ conflicting objectives in terms of different time horizons. For monetary policy, the time horizon is usually two to three years, which is reasonable in light of how the business cycle usually varies. However, we know from experience that financial imbalances and risks in the financial system are built up over a much longer period of time, which can include several business cycles. These longer periods are usually described in terms of so-called financial cycles. There is no established method of measuring the financial cycle, but lending rates, credit terms and asset prices are common indicators.1 So, the financial cycle has its up- and downturns just like the regular business cycle, but is often more protracted.

However, such time-varying regulation also contributes to stability by increasing the costs of borrowing when credit growth and other financial variables suggest that systemic risk has increased, and reducing the interest rate margin in financial crisis situations when the buffer can be used. We can illustrate the time-varying part by adding a time index also for the regulation variable ( z ):  itlending  it   t ( zt ) . If time-varying regulation is introduced, the variations of the interest rate margin will be different over time, which can affect the monetary policy transmission mechanism. At the same time, a central bank must, irrespective of macroprudential policy, understand how the financial sector determines various financial prices in order to understand how monetary policy affects the economy through the lending rate. Credit markets are often not entirely homogeneous, but consist of several different segments or sectors. The development within different sectors can vary tremendously. Although many other factors affecting the lending rate and other credit terms are of an aggregate nature, sector-specific factors are often important too. It is therefore important to have a macroprudential policy tool focusing on individual sectors. This is not least important in attempting to reduce the costs of leaning into the wind.
The first relates to the institutional relationship between the central bank and the government and the second to the multiple objectives assigned to the central banks. All the evidence points to improved long-term inflation performance when monetary policymakers are freed from institutional constraints that hamper their freedom of maneuver and given full operational independence. Such independence is best achieved by enshrining it in an institutional framework that provides for legal independence from the government, with accountability for achieving a clearly defined mandate focused on price stability. Few Asian central banks yet enjoy full legal independence, though most now have greater de facto independence than they once had. Fixed, or partially fixed exchange rate regimes, of course, also constrain the independence of monetary policy. As capital accounts become progressively more open, few countries can sustain over time a commitment to exchange rate stability without risking price stability. Eventually central banks will run up against limits on their capacity to sterilize the effects of exchange market intervention designed to limit the pace and extent of appreciation of the exchange rate. Although measured inflation in emerging Asian economies remains relatively low, the pace of credit growth and the behavior of asset prices provide some evidence of a growing tension among competing objectives. The longer this policy conflict persists, the greater the distortions building up in the economy, the greater the risk of future inflation and the greater the risk of a bumpy future.

Peter Pang: Developing critical financial infrastructure between Hong Kong and Thailand Opening remarks by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the HKMA-BOT Joint Press Conference on the Launch of US Dollar – Thai Baht PvP Link, Hong Kong, 28 July 2014. *  *  *  Deputy Governor, ladies and gentlemen, 1. Good afternoon. It is my great pleasure to welcome you all to this press conference jointly organised by the Hong Kong Monetary Authority (HKMA) and Bank of Thailand (BOT). I would like to thank Deputy Governor Mr. Krirk Vanikkul for joining me here to announce the launch of the payment-versus-payment (PvP) link between BAHTNET, the Thai Baht Real Time Gross Settlement (RTGS) system in Thailand, and the US dollar RTGS system in Hong Kong. 2. Time flies. About a year ago the HKMA and BOT announced in Bangkok to build this PvP link. With the concerted effort of colleagues on both sides, the link went live today as scheduled, after completion of the system development and meticulous testing with the users. The banks in both jurisdictions have been fully engaged to ensure maximum readiness, on both technical and business fronts, for the launch of the link. 3. This PvP link is an iconic project that symbolises the determination of the HKMA and BOT to work together to promote financial integration and financial stability in the region through the linkage of critical financial infrastructure. It will bring significant benefits in three areas. 4.
In addition, the Bank of Albania has supplied and continues to supply the interbank market with the required amount of liquidity. BIS Review 148/2008  1  As I have mentioned in my previous statements: There’s no such thing as a free lunch! Meaning that emphasis should be put on the far-sighted perspective characterizing the Bank of Albania in the recent years. I do not refer here only to price stability, but also to the greatest challenge: banking system stability. The Supervisory Council of the Bank of Albania has constantly amended the regulatory basis creating incentives for more qualitative lending, while other decisions have aimed at providing more banking system transparency to the public, more efficient internal control and better management and governing structures. Regardless of what has been stated above, the future is of prime importance. For many reasons that I have also mentioned in my previous statements, end-year 2008 and almost the entire year 2009 will in a global context be hard, full of challenges and we will be walking through unknown paths. Overcoming this economic crisis requires time. Its solution will materialize through the resetting of a number of internal and external economic balances, the re-arrangement of many supervisory institutions and the re-design of the regulatory framework on many financial market segments. Put in this general setting, the idea that our small economy would resist this global economic tsunami with no consequences at all sounds as unrealistic. However, this issue is even more intricate.

Zeti Akhtar Aziz: Malaysia’s fast-changing financial landscape Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 26th Annual Dinner 2005 of The Association of Merchant Banks, Kuala Lumpur, 3 December 2005. *  *  *  I am pleased to be here tonight on this special occasion of the 26th Annual Dinner of the Association of Merchant Banks in Malaysia. The year 2005 is a particularly significant year for the merchant banking industry in particular and for the financial sector more generally. While this decade has seen significant changes taking place in our financial landscape that followed from the restructuring, consolidation, greater investment in technology, deregulation, liberalisation and changes in the regulatory environment, the year 2005 has seen an intensification of the pace of change in the financial sector. Let me take this opportunity to discuss the macroeconomic environment which these changes are occurring, and discuss further some of the more recent changes that are taking place in the financial system. Our economy has been able to continue to benefit from the favourable external environment as the global economy demonstrates its robustness in an environment of high oil prices and rising global interest rates. On the domestic front, our overall performance was further reinforced with the expanding domestic demand. Latest indicators suggest that the growth momentum remains firmly on track, with an improved growth of 5.3% in the third quarter.
In addition to the above-mentioned factors, the lower economic growth rate also attributes to the sluggish activity in some industries, which, until two years ago, generated a considerable portion of the economic growth. These industries operate in the non-tradable sector, implying that the created product remains in the domestic economy, that is, it cannot be traded in the global markets. To be clearer, I refer to the construction sector and the entire chain of economic activities fuelling it. The sluggish economic activity, or the presence of the negative output gap, leads to the conclusion that there are spare production capacities in the economy. According to the latest analyses, these spare capacities have led to lower inflationary pressures in the economy. Against this background, the Bank of Albania has pursued an accommodative policy, trying to lower the financial intermediation costs (and affecting the cost of credit indirectly), in order to boost investment and consumption and, subsequently, economic activity. We have also supplied the banking system and the Albanian economy with the necessary monetary liquidity, in view of meeting the needs of commercial and economic activity. In addition, through our successful monetary policy, we have accomplished our low inflation objective and have guaranteed a stable macroeconomic and financial environment. This stability, which is the core mission of a modern central bank, allows households, businesses and financial institutions to make financial decisions and take business initiatives amid higher future certainty.

The framework for interest rate control during normalization Now I’d like to talk in more detail about the plans and tools for influencing short-term interest rates that the FOMC will use when it becomes appropriate to raise rates. A target range for the fed funds rate As I noted, during normalization the Committee will continue to communicate the stance of policy through a target for the federal funds rate. The fed funds rate is an overnight, unsecured interest rate in the market for reserves – the rate at which banks and certain other eligible entities borrow or lend balances held at the Fed. 1 The Committee also agreed that it would continue to set a target range for the federal funds rate during normalization. When the FOMC begins to remove accommodation, the level of reserves in the banking system will be very high and the Federal Reserve will be employing new tools to implement policy. Against this backdrop, the Committee has chosen to establish a target range, rather than a point target, in order to provide an appropriate degree of flexibility in policy implementation. A key advantage to targeting the fed funds rate is that the Committee has done so successfully for many decades. As a result, it’s a familiar rate for the public in judging the stance of monetary policy, and its continued use simplifies the Fed’s communications. While the Committee has targeted the fed funds rate for many decades, activity in the fed funds market has changed considerably in recent years.