samchain/econo-pairs-v1 huggingface dataset:
The Swedish market is too small for companies from other countries to find it profitable to manufacture products especially for us. There may therefore be reason to consider how competition legislation may have greater effects in practice. Increased competition benefits the economy in two ways: by initially contributing indirectly to lower inflation and by stimulating efficiency and new ways of thinking. I believe that one of the problems with the competition legislation may be that the incentives to follow the law are too weak. It is always individuals (company managers, owners) who prepare and make decisions on limiting competition against the provisions of the law, but there is little personal responsibility in the current legislation. Merely sentencing the companies to fines risks creating a situation where it is ultimately the consumers that have to pay a second time; first the cartels' higher prices and then the cost of the cartels' fines. In the USA, it is the responsible decision-makers that are penalised when breaches of the law come to light. The Swedish Competition Authority expresses the opinion in its response to the report by the committee on combating cartels (SOU 2001:74) that the possibility of personal penal responsibility should be considered in Sweden. It makes comparisons with other economic crimes that lead to prison sentences. Increased mobility for ideas, goods, services, work and capital during the 1990s, partly through our membership of the EU, has probably also had a positive effect on growth.

2  BIS central bankers’ speeches  Important to follow the international debate One aspect which has been debated a great deal both in Sweden and internationally, and which I do not intend to highlight here, is the level of the inflation target. That issue has recently been discussed quite thoroughly by some of my colleagues, and I do not have much more to add.5 I would just like to say briefly that if we are going to discuss a change in the target level, then I, like my colleagues, have greater sympathy for the argument in the international debate that central banks should raise their inflation targets than for the argument in the Swedish debate that the inflation target should be lowered. The main reason for this is the motive usually stated as the main justification for a rise – that if the target is too low, or if inflation expectations are permanently too low for some other reason, then the policy rate will hit its lower limit more often and for longer periods.6 This means that monetary policy in the future would find it harder to counteract a recession. However, it is too early today to draw the conclusion that 2 per cent is too low a level for the inflation target, and the discussion needs to continue.7 Nor do I intend to say anything about the issue debated both in Sweden and internationally as to whether monetary policy should be used to actively attempt to counteract the accumulation of financial imbalances.
Romania is a supporter of this initiative as adhering to the Banking Union will strengthen financial stability and further increase confidence in the national banking sector through the harmonisation of supervisory practices and deposit guarantee schemes and avoiding regulatory arbitrage. In the long run, Banking Union will foster sustainable lending and economic growth (by reducing the fragmentation of the European financial markets). In the particular case of Romania, it makes even more sense to support the project given the share of foreign capital in our banking system. Furthermore, it is always preferable to have a voice in the setup of a mechanism the existence of which will affect all EU Member States, especially since – irrespective of their current choice – all will eventually end up as members. Our central bank will obviously be a major player in successfully reaching these objectives – sustainable nominal convergence, preparedness for euro adoption and strengthening financial stability through participation in the Banking Union. By doing this, it should contribute to providing the stable business environment that is required from the perspective of micro level decisions. Czech companies are already present as investors in Romania, with names such as CEZ, Zentiva, Hamé, and hopefully following this Forum more companies will join them. This should work both ways, as investment opportunities identified during the Forum discussions may also prompt Romanian companies to invest in the Czech Republic. Having said all this, I wish you to turn this event to good account and start fruitful business ventures.

For instance, organising this forum in Bucharest might be an opportunity for us to persuade our guests to get a flavour of the Romanian wines. As far as the Czech beer is concerned, Romanians do not need much convincing – they are already into it. I do wish you all excellent and productive discussions. Thank you! 2  BIS central bankers’ speeches
3  Ibid. BIS central bankers’ speeches  1  As income increases and wealth accumulates, the demand for modern services is likely to grow faster, as they have higher income elasticities. Thus, we expect that demand for financial services in Asia – such as wealth management – will rise more than proportionately to the increase in household income. For instance, assets under management attributed to mass affluent and high net worth investors in Asia is expected to expand by 60% to reach USD 176 trillion by 2020. 4 7. These positive economic factors will continue to drive the growth of Asian financial institutions and Asian capital markets. Today, five of the top ten largest banks in the world by market capitalisation are Asian banks. 5 Primary market capital-raising in Asia via IPOs is the highest in the world. In the debt market, capital raised via Asian bond issuances have also doubled since 2009 after having achieved record sales in each of the past three years. II. Asia’s capital markets are ripe for closer integration  8. The strong growth of Asian economies and financial markets has created the conditions that are driving greater financial integration in the region. In China, home to the largest bank in the world by assets, banks and asset managers have acquired sufficient scale domestically to expand and look abroad to grow their businesses. Since 2012, the total amount of RQFII quota awarded by China has more than doubled for qualified foreign institutional investors to purchase mainland RMB-denominated securities.

This approach is quite unique to Singapore and it has served us well. 8  BIS central bankers’ speeches
But what, you might ask, does all this have to do with the UK or the Bank of England, when the centre of gravity for Islamic finance lies in the Middle East, North Africa, South and South East Asia? Well, the fact is that, outside those regions, the UK is the pre-eminent centre for Islamic finance. And that reflects its significant, well-established domestic Muslim population; its strong relationships with the wider Muslim world; and its deep expertise in financial market origination and distribution, embedded in a mature legal and regulatory framework.5 Indeed, Islamic finance in the UK goes back many decades (Table 2): from commodity-based short term liquidity management and trade finance in the 1970s, to the first UK Islamic bank, investment funds and takaful in the early 1980s.6  Defined by the Islamic Financial Services Board as countries where at least 15% of banking assets are (self-declared as) Shari’ah compliant. 4 Islamic financial instruments conferring direct partial ownership of underlying assets. 5 See for instance ‘Challenges and Opportunities for Islamic Banking and Finance in the West: the United Kingdom Experience’ by Rodney Wilson [1999, 2000] 7(1&2) Islamic Economic Studies 35-59; or ‘Islamic Finance in the United Kingdom: Factors Behind its Development and Growth’ by Ahmed Belouafi and Abdelkader Chachi [2014] 22(1) 37-78. 6 Al Barakah International Bank, Dar Al Mal Al Islami, and Takaful UK Ltd respectively.

As such, the global recovery will be based on trust and solidarity between nations. Is such cooperation possible? Europe is a case in point. Let´s take again the example of vaccines. When the prospect of a common vaccination pool and 2/4  BIS central bankers' speeches  the purchase of vaccines on an uncoordinated basis was aired, European institutions took the decision to cooperate. That has allowed vaccines to be provided at the same time for countries with very different production or vaccine-purchase capabilities. It is an example of cooperation worth exporting to global vaccination programmes. Another example is the case of the policies needed to tackle climate change. The European Union has pioneered a system of cross-country carbon emission rights. This mechanism, according to recent studies, has led to a reduction of more than 10% in the emissions of regulated companies.3This coordinated effort has seen the EU commit to a binding target of a net domestic reduction of at least 55% in greenhouse gas emissions by 2030 compared to 1990. It far exceeds the commitment to cut emissions by at least 40% under the Paris Agreement. Again let us view the European Union as a laboratory for what the multilateral effort can – ideally – achieve. European economic institutions: unfinished work However, in order for Europe to play this role properly, Europe should deepen its own integration project. Only by addressing the remaining challenges of our political and economic integration process, we – European – can aim to contribute decisively to global objectives.
A further possibility is to temporarily ease the State aid framework for the business sector and establish certain temporary limits on retail electricity prices. More broadly, the war has underlined the need to accelerate European integration so that the EU is an important player on the global stage, capable of deciding its own future and defending its values. A cornerstone of this integration is the creation of a common and permanent fiscal capacity in the euro area, which would facilitate the economic policy response to severe shocks. The design of this common fiscal capacity must be based precisely on the lessons learned from NGEU and the instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE), which were implemented to deal with the pandemic, and on any lessons we might draw now from our response to the war. The financial realm is a second area of economic integration. Pan-European bond issuances to fund NGEU, and any other potential issuances as part of the response to the invasion of Ukraine, are an important step towards creating a European safe asset. In addition, deeper capital market integration in the euro area would pave the way for greater risk-sharing in the face of asymmetric shocks. Lastly, a third necessary element to bolster the euro area’s institutional architecture is the completion of the banking union, establishing a European deposit insurance scheme and a common framework for resolving systemic crises.

Any agreements concerning wage increases should take their lead from the underlying inflation. These recommendations apply to both wage increases and, where applicable, to potential wage guarantee clauses. Arrangements such as these have already been used by the social partners in the past and have proven a useful tool for protecting jobs, making firms more competitive and spurring economic growth.10 Fifth, these guidelines on wage developments should be accompanied by explicit commitments to moderate profit margins. Only then will such wage restraint actually make firms more competitive, while, in turn, limiting the extent to which rising energy input costs are passed through to other goods and services in the economy. And some sort of mechanism would have to be set in place to ensure this restraint in profit margins can be verified. The simulations performed using the Quarterly Macroeconometric Model of the Banco de España (MTBE) underscore the benefits of a successful incomes policy. The MTBE  8  The weight of energy inputs in production and exposure to international competition vary considerably across sectors and firms. 9  To varying degrees, these types of clauses mean that, regardless of the type of underlying shock, any potential future price rises automatically pass through to wage increases, thereby triggering the second-round effects we hope to avoid.
Central banks have needed to find new ways to support a financial system under great stress and to buttress economic activity. Moreover, the crisis also revealed a major hole in our framework for managing the economic and credit cycles. So tonight I want to discuss some of the actions we have taken in dealing with the crisis and subsequent recession, as well as explaining some of the attendant reforms to the policy framework. Let me begin by rewinding the clock five years to August 2007 when financial markets first seized up. UK GDP had grown continuously and at a steady pace for the preceding 64 quarters. And consumer price inflation had been within a percentage point of the Government’s inflation target for every month bar one since the Bank was given operational responsibility for monetary policy in 1997. Such stability was historically unprecedented. But the United Kingdom was not unique: other advanced economies also experienced a long period of unusually benign macroeconomic outcomes. The period of unusual stability led households, businesses and especially financial institutions to underestimate the risks they were exposed to. Together with historically low interest rates, at both the short and long end of the yield curve, that encouraged a debt-fuelled “search for yield”. The associated expansion in credit is shown for this country in Chart 1.

These  BIS central bankers’ speeches  1  estimations conditioned the retaining of the stimulating nature of monetary policy during the second quarter of 2012. The key rate stood at the lowest historical level, providing eased monetary conditions in order to meet our inflation target and support the Albania’s economic activity. Also, the Bank of Albania has continued to inject sufficient liquidity demanded by the banking system, against an expanded collateral base and at adequate maturity terms. According to recent data from INSTAT, the Albanian economy recorded an annual fall of 0.2% in the first quarter of 2012. Industry contracted 19.3% y-o-y, mainly due to the significant decrease in electrical energy output. Also, Construction decreased its activity in real terms, by 17.6%, thus providing a negative contribution to the performance of the gross domestic product. By contrast, Services contributed positively to the economic activity, pointing to an annual growth of 6.0%. Agricultural sector grew 4.5%, y-o-y during this period, providing a positive contribution to the growth of the gross domestic product. Estimations on the aggregate demand in the first quarter of 2012 suggest a continuing weak domestic demand. The consolidated fiscal policy determined the lack of fiscal stimulus in this period and a downturn in public sector’s demand for goods and services. Private consumption remains slow, thus reflecting the prudent consumer’s behaviour and the increasing tendency for saving. Private investments also remained low.
Opting for the central bank as a national macroprudential authority can be warranted by the experience accumulated in the field, especially in the case of a dominant position of the banking sector, and by the possibility of a quick implementation of adopted measures (since the institution is responsible for identifying systemic risks and, at the same time, has available the macroprudential tools to put into practice the measures considered adequate). Some disadvantages of having supervision integrated in the central bank are manifest in this case as well, such as the backfiring of potential errors in the area (be they real or merely perceived as such by the public) on monetary policy credibility or a keener interest in politically capturing the institution as a result of the substantial rise in central bank powers. As Klaas Knot has showed more than once, the key argument in favour of creating a board is that it enables the pooling of the expertise of all financial market supervisors and of the government; the drawbacks would be more diffused accountability and the risk of delayed implementation of recommendations, given the involvement of several institutions. A prominent role of the central bank in the board (either by chairing it or through the number of members assigned) might mitigate the risk of inaction.

Coming to the current NBR governance framework, I would like to start by pointing out that it ensures a complete separation as regards the coordination of the relevant departments: while the Governor is in charge of the monetary policy area, the First Deputy Governor coordinates the Supervision Department; one Deputy Governor takes care of financial stability and the other, of bank resolution. The nine-strong Board of Directors runs the central bank, but the process of preparing its decisions in the areas of monetary policy and prudential supervision takes place in two distinct structures: the Monetary Policy Committee and the Supervisory Committee, respectively, which comprise members of the executive management and experts in the relevant areas. As separation is not the same thing as complete isolation, I have to add that both committees are chaired by the Governor... Pursuant to the NBR Statute, the Board is tasked to act as a first appellate forum for sanctions on credit institutions. In order to avoid conflicts of interest that may appear, the following institutional arrangements are in place: separate Board meetings, a certain degree of autonomy of the Supervision Department and recusal from the proceedings of the First Deputy Governor, in his capacity as coordinator of the Supervision Department. 2  BIS central bankers’ speeches  I would like to add a special remark regarding the new role of the NBR as the resolution authority, arising from the provisions of the Bank Recovery and Resolution Directive.
Without these measures we would probably have faced a financial meltdown. One sign that the crisis is no longer as acute is that what are known as TED spreads have fallen in Sweden, as well as the United States and the euro area. The TED spread is the difference between a three-month interbank rate and a three-month treasury bill rate. The spreads are now back at around the levels prevailing immediately prior to the worsening of the crisis in autumn 2008. But the financial markets are still functioning much less efficiently than normal. It is also still difficult for companies to finance themselves in the capital market. Moreover, the liquidity injection from the central banks does not solve the banks’ capital problems. For this reason it is not surprising that the international discussion is currently aimed more at solvency than liquidity. It would be very much appreciated if many countries could begin to distinguish bad banks from good ones in an effective and transparent manner. In Sweden, too, we have implemented a large number of unconventional measures to safeguard financial stability and mitigate the negative effects of the financial crisis. During the second half of 2008 the Riksbank increased its lending to the banks by more than SEK 450 billion. Almost SEK 200 billion of this was comprised of loans in US dollars. This has largely been financed by means of swap agreements with the Federal Reserve in the United States.

These countries have sought a return on their financial capital abroad by investing, for instance, in US treasuries. The increased demand for US treasury bonds has for a long time been pushing down long-term interest rates in the United States. In addition, the US central bank conducted expansionary monetary policy in connection with the recession at the beginning of the 2000s and in the years immediately following. The low interest rates have stimulated consumption and investment in the United States. They contributed in particular to house prices rising more quickly than household incomes. The rising stock market and house prices contributed to a reduction in household saving, which largely explains the rising current account deficit until the housing market bubble burst. However, the problems of a previously overheated housing market are not limited to the United States, they can also be found in a number of other countries. New forms of borrowing, including subprime loans, contributed to overheating in the US housing market During the years 2004 and 2005 new loan forms became increasingly common in the housing market in the United States, not least subprime loans. Subprime loans are loans aimed at households with low incomes. Often the lenders used very low interest rates during the first two years of the loan as an enticement. However, after this period the interest rates rose substantially. It is likely that the credit assessment of the households was not too comprehensive.
A crucial factor affecting the success or otherwise of the CFI is the availability of qualified and competent practitioners who can help the banks and the HKMA in the areas of risk assessment, design and implementation of the defence mechanism and the day-to-day management of cybersecurity. Unfortunately, there is a general shortage, globally, in the supply of qualified professionals in the field of cybersecurity and Hong Kong is of no exception. So the second pillar of our CFI is to develop a training and certification programme in Hong Kong so that we may have an increased supply of qualified professionals in cybersecurity going forward. I am very pleased to announce that, in collaboration with the Hong Kong Institute of Bankers (HKIB) and the Hong Kong Applied Science and Technology Research Institute (ASTRI), a new training and certification programme in cybersecurity will be launched. I am also very pleased to say that we are collaborating closely with CREST, the UK cybersecurity certification body, to ensure that the programme in Hong Kong is designed and benchmarked against the latest international standards in this field. I understand that Mr Ian Glover, President of CREST International, is with us today and he and Carrie Leung of HKIB will talk more about this professional development programme later on. What I would say here is that the training and certification programme in Hong Kong will offer three levels of competence: “foundation”, “practitioner” and “expert”.

Regardless of whether we conclude that the repo rate must be increased soon or that it can be left unchanged for somewhat longer, the Riksbank’s commitment to price stability is intended to make a contribution to a path for output and employment in Sweden that remains stable. 5  BIS Review 84/2000