samchain/econo-pairs-v1 huggingface dataset:
Øystein Olsen: Does Norway save too much? Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Peterson Institute for International Economics, Washington DC, 22 March 2018. * * * Accompanying slides of the speech. INTRODUCTION First, let me thank you for the opportunity to speak to you today. I am very happy to visit the Peterson Institute. Norway is a small, open economy which was transformed by the discovery of oil on our continental shelf almost 50 years ago. Back in 1970, the year after the first discovery, income levels were relatively low compared with other western countries. That picture has changed completely. Lower oil prices in recent years have reduced the relative income level somewhat, but measured by GDP per capita, Norway still ranks among the richest countries in the world. Graph: GDP per capita Natural resource discoveries have been identified as a curse for some countries. For Norway, it has been a blessing. We have managed to transform oil and gas resources into real and financial assets. Luck has been supplemented with what I dare claim is a sensible handling of the resources. At an early stage, it was concluded that the resources belong to the Norwegian people. Large savings in recent years means that also future generations will benefit from the revenues. Graph: The petroleum fund mechanism Direct government participation in the industry and an extraordinary tax rate for oil companies, currently at 78 percent, ensure that most of the resource rents flow into government coffers.

I trust that our product innovation will also promote the development of the bond market in Hong Kong. This creates a win-win situation for the investors, the placing banks and the Corporation. I like to thank the banking community for supporting our bond issuance. In particular, HSBC and Bank of China (Hong Kong) are underwriting a portion of the bond issue as well as placing the notes. My appreciation also goes to the other placing banks, namely, Bank of America (Asia), Bank of Communications, Bank of East Asia, Chiyu Bank, CITIC Ka Wah Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, ICBC (Asia), Liu Chong Hing Bank, Nanyang Commercial Bank, Shanghai Commercial Bank, Standard Chartered Bank (Hong Kong), Wing Hang Bank and Wing Lung Bank. With your support, I am sure we will have another successful retail bond issue that is welcome by the investors. Thank you. BIS Review 81/2006  1
“Running out of room: revisiting the 3D perspective on low interest rates," Speech by Gertjan Vlieghe at the London School of Economics. Woodford, M. (2003). “Interest and Prices: Foundations of a Theory of Monetary Policy  ”,  Princeton University Press, Princeton (2003). 1. This speech will use a variety of real interest rate estimates, all of which adjust nominal interest rates for expected inflation. 2. For example, some approaches take a ‘longer-run’ perspective, according to which the equilibrium interest rate is the real rate expected to prevail after the economy has adjusted to any cyclical fluctuations (Laubach and Williams, 2003). Other approaches allow for short-term fluctuations in the equilibrium interest rate, defining it as the real rate that would prevail if prices were flexible (Woodford, 2003). 3. See Bank of England (2018) and Bailey et al. (2022). 4. For example, the analysis in Bank of England (2018) assesses that during the global financial crisis, headwinds to demand (including heightened uncertainty and tighter financial conditions) prompted a large fall in the cyclical component that took many years to dissipate. 5. The focus of this speech is on the longer-term structural trends and what might be driving them, for which longer time series of data are preferred. To enable cross-country comparisons, the real rate data are constructed by adjusting market measures of nominal interest rates for inflation. Consistent with the structural model analysis below, the  Page 21 sample is truncated in 2015. Del Negro et al. (2019), Holston et al. (2017) and Hamilton et al.

[6] Understanding the underlying structural trends that drive this balance requires a structural model. Recent research by staff at the Bank has developed a model of the world economy that brings together several key structural factors that could account for the decline in Global R*. [7] These are productivity growth, population growth, longevity, the relative price of capital, and government debt. The structural model generates a path for Global R*, as well as a decomposition of the contribution of each of these factors. Some key results of this exercise are laid out in Table 1. This includes both the baseline model simulation, and a range of alternatives that vary some key underlying parameters and assumptions. It focuses on the period since 1985, given the attention it has received in much of the existing literature. The sample ends in 2015 due to the process used to extract the underlying trends in the structural factors and the timeliness of some of the data required for the simulation. [8] Given the focus on slow-moving structural drivers, omission of the most recent data is unlikely to have a material effect on the estimate of the trend real rate. And I will come on to consider the more recent period and the potential impact of the Covid pandemic later in the speech.
There are essentially two objectives here. So there is a missing set of instruments. And the big question is whether a set can be devised that stack up not only in theory but in practice; instruments that can be used in the real world. Having first flagged 18 months or so ago that the Bank would work on this general area, earlier this year I set out four questions which the debate would need to address; 7 objectives,  6  See, Bean C. R “The Great Moderation, the Great Panic and the Great Contraction”, Schumpeter Lecture at the Annual Congress of the European Economic Association, Barcelona, August 2009 and “Some Lessons for Monetary Policy from the Recent Financial Turmoil”, remarks at Conference on Globalisation, Inflation and Monetary Policy, Istanbul, November 2008. Also Dale S, “Inflation Targeting: Learning the Lessons from the Financial Crisis”, remarks at the Society of Business Economists’ Annual Conference, London, June 2009. 7  My remarks at the Institutional Money Market Funds Association Annual Dinner in London on 2 April 2008 included the following on macroprudential policy: “Looking ahead further, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst.

The outcome of these developments is that a new focus is being placed on deposit insurance in the post crisis period. Deposit insurance is now considered as an essential crisis management tool and an important instrument for orderly liquidation of an unsound financial institution. A well-designed deposit guarantee scheme largely supports financial stability and financial crisis resolution by mitigating risks of and maintaining trust in the 1/3  BIS central bankers' speeches  financial system. However, recalling one of the most important lessons we learned from the global financial crisis, despite the mandate given to any institution, no player can alone deal with a systemic crisis and the consequences of strong spillover effects and contagion risks. It is essential that each element of the safety net develops robust mechanisms that aim to resolve financial institutions and stabilize the financial system as smoothly as possible, minimizing the cost to the economy. Moreover, financial stability can only be preserved by a well-coordinated financial safety net, which is supported by a resilient legal framework, proper tools and instruments and careful contingency planning for each of its elements. The Bank of Albania has dedicated much of the past 10 years to integrating the lessons learned from the recent financial crises into a new regulatory framework. Our financial safety net is further aligned with international best practices, as we coordinate our roles as supervisory authority, lender of last resort and, recently, resolution authority as well.
The powers and governance of the three authorities could also be adjusted to further improve their efficiency, but I do not think it would be useful in the short term to radically change the existing architecture. Greater changes – which could also bring supervision and resolution closer together – could be considered once Brexit has occurred and the Banking Union and the Capital Markets Union are well established. With regard to Brexit, I would like to reiterate a requirement which, in our view, is obvious: clearing operations in euro, for all those of systemic importance, must be located where the supervision of the Eurosystem can be exercised effectively. And after Brexit, we do not see how this could be in London. 1/3  BIS central bankers' speeches  II. The 2016 results of the French banking and insurance sectors In 2016, in a context marked by the low level of interest rates, the major French banks showed solid performances and compared favourably with their European counterparts. Their profitability increased, with their net profit (group share) amounting to EUR 24.3 billion, up 3.1% over the year. Moreover, the French banking system was able to strengthen its higher quality capital, while maintaining the financing to the economy. The ratio of core capital now stands at 13.2% of riskweighted assets, up 60 bp from 2015; this represents a EUR 164 billion increase in capital since 2008 for the major banks, i.e. more than a two-fold increase: an increase of more than 120% in less than 10 years.

Management of the gold and FX reserves shall also help to safeguard the Riksbank’s financial independence, which means rates of return must be healthy. The Riksbank has decided to consider how much the assets contribute to the FX reserves’ overall climate footprint.32 This follows the view of the NGFS on climate risks as a source of financial risk. In our most recent analysis of the FX reserves’ composition, the greenhouse gas intensity of the assets was, for the first time, a factor in the calculations together with rates of return and risk. Chart 3 shows how greenhouse gas emissions vary in different countries. The Riksbank has elected to only invest in Australian states and Canadian provinces with the same or lower greenhouse gas intensities than the respective country as a whole. For this reason, bonds issued by certain Australian states and Canadian provinces were sold off in 2019, see Chart 4. 30  This is the market valuation as of 31 December 2019, see the Riksbank (2020). See Mauderer (2020) for a discussion of this. 32 See also Flodén (2019) for a discussion of this. 31  13 [18]  Chart 3. Emissions of greenhouse gases in different countries. Emissions as a share of GDP 0,5  0,5 In the foreign exchange reserves  0,4  Potential holdings  0,4  0,3  0,3  0,2  0,2  0,1  0,1  0  0  Note.
However, in the interests of the Swiss economy as a whole, it is important that the negative interest rate be allowed to function as effectively as possible, by applying it broadly and keeping exceptions to a minimum. The aim of the negative interest rate is to reduce the relative attractiveness of Swiss franc investments, and to counter upward pressure on the exchange rate. Hence, it is primarily directed at the external contributions to monetary conditions in Switzerland. As such, the negative interest rate is not an ordinary policy instrument. It is a consequence of the fragile international environment and its exceptionally low interest rates. Historically, Swiss interest rates have been lower than those of our main trading partners. This interest rate differential is a reflection of our country’s long-standing strengths, including political stability, sound institutions, a resilient economy, and a first-class financial sector. My first chart shows the interest rates of German and Swiss ten-year government bonds. The orange area indicates the interest rate differential. As central banks around the world fought to mitigate the worst effects of the global financial crisis, short-term interest rates in many advanced economies fell towards zero. Importantly, foreign interest rates, including those in Germany, have fallen more sharply than those in Switzerland. As a result, Switzerland’s interest rate differential had practically disappeared, making Swiss franc investments more attractive than comparable investments in other currencies.

Similarly, we hope that this MAS office can also cater to the needs of the larger Chinese financial community by enhancing understanding and contacts with Singapore and the regional markets, as thereby contribute in our own small way to the continued development of China’s financial sector. 2  BIS central bankers’ speeches  Concluding Remarks 18 On behalf of all my colleagues in MAS, I would like to express our strongest appreciation to the People’s Bank of China for their approval and support for MAS’ representative office in Beijing. 19 We look forward to taking full advantage of this milestone collaboration to deepen our financial and economic cooperation and take our bilateral relations to new heights. 20  Thank you. BIS central bankers’ speeches  3
In this respect, a regulatory and supervisory framework based on high international standards is already in place. Maltese legislation in this area in fact incorporates almost all the features of the corresponding EU directives, and the legislative  4  BIS Review 70/2002  amendments I have just referred to have brought about almost total harmonisation. Institutional responsibilities are divided between the Malta Financial Services Authority, which is responsible for the regulation and supervision of banking, insurance and investment services; and the Central Bank, which is charged with ensuring the stability of the system as a whole. The Bank is also responsible for the domestic payments system, which is being upgraded in line with developments in the euro area. According to a recent background paper prepared by the ECB , Malta already has a financial intermediation mechanism that broadly mirrors the composition of different market segments in the euro area member states. Despite the growth of non-bank financial intermediaries and the development of money and capital markets, the banks remain the key financial institutions. Total bank assets amount to more than double GDP, whereas the ratio of domestic credit to GDP is broadly in line with the EU average. More importantly, the banking system is generally healthy, enjoying ample liquidity and a broad capital base, with the ratio between own funds and risk-weighted assets standing close to 14%. Some institutional aspects of EMU preparations I shall conclude with some remarks on preparations of a more operational nature for eventual integration within the ESCB.

This diversity of exchange rate regimes can be explained in terms of the progress made thus far by these countries in disinflating their economies; their degree of openness; the extent of capital account liberalisation; and the adequacy of their reserves. Generally speaking, during the early phase of transition when many accession countries were faced with the task of disinflating their economies and restoring the credibility of monetary policy, fixed exchange rate regimes were the norm. Then, a credible anchor in the form of the currency of a low-inflation trading partner was viewed as the best strategy for meeting these objectives. The rationale is not difficult to understand. The persistence of inflation differentials under a fixed exchange rate regime would lead to an appreciation of the real exchange rate, undermining a country’s external competitiveness. The mere adoption of a fixed exchange rate indeed signals the intention to subordinate monetary policy to exchange rate policy, adding to the credibility of anti-inflationary monetary decisions. As these countries progressed with disinflation and as the emphasis shifted towards integration with the EU, the continuation of structural reforms and attracting sufficient capital flows to enhance real convergence, a gradual move to more flexible regimes become feasible. At first sight, such a shift would also seem to be indicated for Malta, particularly as the capital liberalisation programme approaches full implementation.
CMH is expected to unlock a vast potential of opportunities for the Islamic financial industry. It can provide a wider range of new instruments not only for liquidity management and risk management purposes but players can derive additional linkages by utilising CMH to facilitate issuance of sukuk and in the creation of financing and deposit products. Besides having the potential of providing wider product selections, CMH could create a more transparent and streamlined commodity transaction practices based on the concept of murabahah or tawarruq. Leveraging on the experience of Bursa Malaysia in the area of exchange traded products, CMH is able to eliminate uncertainty in the transactions and could mitigate risks such as legal risk, market risk and counter-party risk. We are most grateful to the CPO suppliers for participating in this initiative. For CMH to be successful, it requires the cooperation of the players in the CPO market. With greater involvement of players in the commodity industries, CMH would be able to unlock the potential of your business operation by enabling the stocks to be exploited for this exchanged traded mechanism. The success of the CMH depends on the continuous support of the CPO suppliers. The CMH could also explore the possibility of sourcing CPO supplies from abroad. This innovative effort which has been endorsed by the Shariah Advisory Council of Bank Negara Malaysia and the Securities Commission has the potential to appeal to a wider market audience in and outside of Malaysia.

Going forward the long term viability of BCH will depend on its ability to create a wide range of innovative product offerings that are endorsed by globally renowned Shariah scholars and on the continuous strong support from the key stakeholders. On that note, allow me to congratulate the parties involved in today's signing of Memorandum of Participation – the Commodity Murabahah House, participating Islamic banks and the CPO suppliers – for showing and giving your commitment to making the CMH a reality. Also I wish to take this opportunity to extend my deepest appreciation to the team at Bursa Malaysia, Bank Negara and SC who had conceptualised the idea and all other stakeholders who have worked hard to make this noble initiative come true, insyaAllah. 2  BIS Review 93/2009
For a start, each year’s deficit translates into higher debt and debt-servicing burdens, which already stand at 67 per cent and 3.4 per cent of GDP, respectively. 5 Put differently, the 196 million euro in interest due on the debt next year is equivalent to what the Government would spend on medicines  2  Structural Issues Report 2010, which focuses on the impact of the energy markets on the macroeconomy. A detailed report is to be published next year in the form of an ECB Occasional Paper. 3  Weathering the challenges, in Ernst & Young’s 2009 Malta Attractiveness Survey. 4  Paul Krugman, The Age of Diminished Expectations: US Economic Policy in the 1980s, MIT Press, 1992  5  Estimates taken from the Budget speech 2010. 4  BIS Review 154/2009  in three years at today’s prices. To complete this perspective, despite the reduction planned from 2011, the general government deficit in that year is still expected to remain just above the 3 per cent benchmark, and the forecast reduction to 2.9 per cent in 2012 is contingent on seemingly optimistic nominal growth assumptions. What are the options for reducing the deficit? Since any increase in the tax burden, already high at around 40 per cent of GDP, would have a negative impact on competitiveness, expenditure restraint seems to be the only possibility. This option is more complex than it might seem, however, because of the structure of recurrent government spending.

Combined with the growth differential the Spanish economy still enjoys, this has allowed Spanish institutions to negotiate the difficulties thrown up last year with a limited impact on their earnings, and this despite the difficulties in Latin American markets. In turn, historically low default levels in the domestic market, despite the strong expansion of credit in recent years, and the strength of own funds mean that, on the financial side, there are no constraints on the process of economic recovery. In this setting, rising to the challenge of a complex international financial situation underscores the importance for institutions of continuing to strive to improve the efficiency and solvency of our system. They must apply greater rigour to the analysis, extension and monitoring of credit transactions and  BIS Review 31/2003  7  make recovery procedures more flexible. The heightened competition in the Spanish banking industry, with the subsequent benefits in terms of efficiency for borrowers and depositors, will - combined with historically low interest rates - require of banks a major drive to cut costs so as to increase efficiency. The challenges posed by the current cyclical juncture should not see us forget other more structural and medium-term challenges affecting financial institutions and, specifically, banks, savings banks and co-operatives. Given the far-reaching consequences for banking, such challenges include most notably the New Capital Accord and the implementation of International Accounting Standards (IAS). It should be clear that these new regulatory aspects go beyond a mere alteration of laws, decrees or Banco de España circulars.