samchain/econo-pairs-v1 huggingface dataset:
This process can probably be most easily understood in the light of the economic policy conducted during the decades prior to the crisis so let me therefore begin with a brief look back. The economic policy conducted during the 1970s and 1980s meant that nominal wages and prices rose more rapidly in Sweden than in other countries. At the same time, our aim was to maintain a fixed exchange rate, which assumed that inflation in Sweden had developed at roughly the same rate as in the countries that were our most important trading partners. Price and wage trends led time and time again to cost crises that finally forced Sweden to make devaluations of the krona and undermined the credibility of the fixed exchange rate regime. The exchange rate adjustments were also one of the reasons behind a failure to implement necessary rationalisations and streamlining. Although the devaluations strengthened our competitiveness temporarily, they provided the economy with new inflation impulses and by the time the price and wage spiral had turned around a few times, a new cost crisis had arisen. The fact that developments did not favour real growth in Sweden or real wages becomes clear in comparisons with both other time periods and other countries, such as the Nordic countries, Germany and Austria (Figure 1).

Our forecast is that economic activity will strengthen in the near future, a development which is supported by the fact that economic policy remains expansionary. There are some causes for concern; primarily the high oil price and global imbalances, which contribute to the uncertainty over international economic developments. Our assessment in the October Inflation Report was that the risks for inflation were balanced, that is, the risks of weaker price development were balanced by the risks of higher inflation. As before, there is also reason to take into account the fact that household borrowing and house prices are continuing to rise at a rapid rate. I agree with the analysis in the Inflation Report and with the decision to hold the repo rate unchanged. At the same time, in my opinion there is reason for some concern with regard to the sustainability of the current economic trend. There are already signs of a slowdown in the United States, which are probably linked to the severe storms the country has suffered, as well as to the fact that inflation appears to be accelerating and to the Federal Reserve’s interest rate increases. It has long been clear that a slowdown in domestic demand is necessary in the United States in order to correct global imbalances. However, there is a risk that the adjustment of the imbalances will occur too rapidly and will be combined with a rapid fall in property prices. This type of development could in turn lead to a rapid braking of consumption.
When global economic activity improves, global export prices are expected to rise. Initially, the krona is expected to strengthen somewhat in trade-weighted terms, which will dampen the impact on Swedish import prices in the near term. However, from the beginning of next year, we assess that the krona will no longer contribute to holding down import prices and they will then rise faster. As economic activity in Sweden strengthens, the rate of wage increase will also rise. At the same time, we have assessed that labour productivity is increasing, which means that unit labour costs will continue to grow by around 2 per cent a year in the coming years. The fact that import prices rise faster, at the same time as unit labour costs continue to increase at a normal rate, will lead to companies’ total marginal costs gradually beginning to grow at a more normal pace. We also predicted in July that the demand situation would improve during the forecast period, partly thanks to higher demand from abroad and a continued expansionary monetary policy in Sweden. We are expecting that it will become easier for companies to raise their prices when demand increases. Companies’ profit shares will also increase towards more normal levels then. All in all, these factors – increasing unit labour costs, rising import prices and higher price mark-ups – lead to the assumption that inflation will rise in the coming period.

Such a rise in prices cannot and may not be corrected with monetary policy measures as long as no wage-price spiral is set in motion. First, we do not know whether this price rise is a permanent or merely a temporary phenomenon. Second, the change in oil prices impacts directly on the price level, whereas monetary policy changes act only indirectly and after a considerable time lag. Third, higher oil prices constitute a cost shock that cannot be countered by means of monetary policy. Experience shows that a monetary policy which attempts to counteract the effects of a one-off increase in oil prices on the price level can cause considerable damage to the national economy. Furthermore, it must be noted that the present price increase is modest in a historical comparison. For example, during the second oil price shock at the end of the 1970s, oil cost approximately twice as much as today calculated at current prices. Our interest rate decision of today is thus not aimed at combating the effects of the oil price rise on inflation. The increase in oil prices nevertheless casts a shadow over the prospects for the economy, which are optimistic overall. We are not of the opinion, however, that the upswing is threatened by this. Model calculations have shown that higher oil prices would slow growth in Switzerland only moderately.
The UK is the exception: since the mid-1990s, the country has emerged as the growth model for Europe. For Switzerland, the sluggish development in Europe is especially regrettable, as the Swiss export sector usually serves as the engine for economic recovery. All in all, Switzerland's export industry is well positioned to benefit from higher demand from abroad. Switzerland has been able to reduce its production costs per unit in the past few years, and the Swiss franc even depreciated slightly versus the euro since the launch of the single currency. As regards domestic demand, consumer sentiment remains satisfactory overall, but this should not be expected to stimulate growth decisively. While construction activity is robust, it has lost some of its momentum. Investment in equipment is still brisk, and the recent modest slowdown should not last too long. On the whole, the Swiss economy is still on its growth trajectory, but it lacks stimuli from abroad. This situation is the same as the one underlying the National Bank's interest rate decision of December 2004. Even though Switzerland is particularly affected by the lacklustre performance of the European economy, overall prospects are not gloomy. Growth in the rest of the world remains dynamic, and this is expected to benefit Europe in due course. For Switzerland, a growth rate of 1.5-2% is still realistic. With the Swiss economy thus continuing to grow below its potential, the labour market will not see any sustained improvement. BIS Review 11/2005  1

His paper "Monetary Policy Today: Sixteen Questions and About Twelve Answers" followed up on a previous assignment he discharged in the form of a key-note dinner speech in Frankfurt in 1999, at what was the first research conference organised by the then brand-new European Central Bank. What I found noticeable from Professor Blinder’s 2006 presentation was that the list of issues had grown longer rather than shorter since 1999 (from 15 to 16), although he noted that this should not be misinterpreted as lack of progress. It was the result of dropping four issues from his list – because, in his view, they were either resolved or had moved out of the radar screen – and  BIS Review 132/2007  1  adding five. Most remarkably, among the issues that had been dropped were low and stable inflation as the central goal of monetary policy, and central bank independence. I think Professor Blinder was right to remove these issues from his list. There is a broad agreement among academic economists and policy makers alike that maintaining price stability is the best contribution that monetary policy can make to support sustainable growth and job creation. This consensus reflects the fundamental tenet that, as the rational expectations literature has helped us understand 1 , there is no trade-off between growth and inflation at horizons longer than the short run, and that the real effects of monetary policy are short-lived and uncertain.
Admati and Hellwig (2013) provide a comprehensive and lucid account of the case for higher capital standards. Their argument centres on the fact that the impact of higher capital standards on banks’ overall cost of capital needs to take account of the lower risk that arises from this shift - the Modigliani-Miller offset (Modigliani and Miller (1958)). It needs also to distinguish between any private costs to banks from tighter regulation and the social benefits this confers, with the latter the key public policy yardstick. When it came to re-calibrating regulatory standards for capital and liquidity after the crisis, international regulators engaged in a detailed, quantitative exercise which sought to weigh these social costs and benefits of tighter regulation, drawing on existing empirical evidence. The Long-Term Economic Impact (LEI) study, published by the Basel Committee in 2010, is a useful starting point for discussion of the appropriate calibration of regulatory standards (BCBS (2010b)). The main conclusion from this work was that, under conservative assumptions about likely economic costs, there were positive economic benefits to society from a sizeable increase in the capital banks were required to maintain. The study did not settle on an optimal level of bank capital. But the results presented were consistent with societal benefits peaking at a Tier 1 risk-weighted capital ratio of between 16-19%.11 This is north of most global banks’ current capital ratios.

So to summarise... I welcome the amendments to the regulations regarding the banks’ capital requirements being discussed by the Basel Committee. Even if the final pieces of the  10 [12]  puzzle are not yet in place, the changes will most likely lead to more robust banks and an increased confidence and transparency in the banking system. They will also reduce the risks linked to internal models and lead to increased international harmonisation. This in turn will benefit the major Swedish banks, which compete in a global market. However, it is much too early to say yet exactly how the new regulatory framework will affect the real economy in Sweden. The effects will mainly depend on how Sweden's special national requirements change in the future and not on the Basel Committee’s global minimum standards. The time is now right to start a review our special Swedish requirements and this is work I welcome and to which the Riksbank would gladly contribute going forward. Thank you for listening.
For instance, a large proportion of new  2  BIS central bankers’ speeches  mortgages granted for owner-occupied residential property still have a loan-to-value ratio of over 80%. Furthermore, the share of new loans with stretched affordability has also remained at a high level. At the same time, the interest rate margin of domestically focused banks narrowed further in 2012, while interest rate risk remained historically high. In view of the persistently low level of interest rates, there is the risk that, despite the measures already implemented, imbalances on the Swiss mortgage and real estate markets will continue to build up. This would increase both the likelihood and the consequences of a price correction in the medium term. Such a price correction could be triggered, for example, by a sharp increase in interest rates. Against this background, domestically focused banks should therefore continue to ensure that their resilience is sufficiently high, irrespective of the regulatory requirements, and make adjustments where necessary. They should be able to maintain their economically important functions, even if real estate prices were to fall sharply and interest rates were to simultaneously rise. In particular, domestically focused banks should make sure that the currently high direct interest rate risk is assessed and managed using conservative assumptions. In this context, the assumptions applied by banks with regard to savings and sight deposits are especially important. In an environment of historically low interest rates, these deposits have proven to be very stable sources of financing in recent years.

22 The more worrying possibility is that the duration of time spent away from the zero bound will be considerably shorter than the average remaining duration of assets on the central banks’ balance sheet after moving away from the zero bound. Such a scenario seems to make the objective of a lean balance sheet difficult to achieve and raises a number of important questions we should think about carefully. For example, is there a size of the central bank’s balance sheet beyond which further asset purchases become difficult or perhaps less  20  Ulrich also spends considerable time discussing market neutrality and its implications for the assets central banks should hold against currency. As he notes, there is a large difference in approach between the Federal Reserve and the Bundesbank in this regard. 21  A central bank that does not hold the assets it has purchased as long as market participants anticipate could lose credibility, making future asset purchases less effective. 22  In 2006, the Bank of Japan ended its Quantitative Easing Policy and returned to a lean balance sheet within a few months. This speedy return was facilitated by the short duration of the assets on their balance sheet. Of course, their motivation for such a speedy return was to reduce reserves quickly to regain control of overnight rates. This motivation no longer seems necessary, at least in the U.S., given the Fed’s successful liftoff. 6  BIS central bankers’ speeches  effective?
In case that sounds odd given that Bank Rate has been at 0.5% for over two years, I should underline that, even in normal circumstances, monetary policy works through the expected path of our policy rate. The markets now expect us to keep Bank Rate low for longer. Two-year risk free money market rates are over 100bp lower than in the late spring. That has helped to offset the rise in credit spreads, and so means lower borrowing costs in the real world. I place weight on that, as my MPC colleagues know. Above that, we have decided to add £ to our programme of Quantitative Easing (QE). The degree of monetary stimulus will slowly increase as the agreed QE is executed. That money does not, as is sometimes suggested, get stuck with the banks. The whole point of the Bank’s operating framework for QE has been to avoid that. All central bank money is ultimately held by banks: that is what a banking system is. But by buying bonds from insurance companies, pension funds and others, we put the money into their hands. It is money that, by construction, provides a meagre return – negative in real terms – and so money that they will want to get rid of by purchasing other higher-yielding assets. Policy still works through asset prices, increasing wealth and reducing the cost of capital relative to where they would be otherwise.

We could have chosen instead to offset the price level shocks by running a much tighter monetary policy. Had we done so, spending in the economy, activity and employment would all have been squeezed. Conditions have anyway been difficult for many households due to the squeeze on real incomes, but I think it would have been worse if we had tightened policy. Our ability to sustain exceptional monetary stimulus has, I should reiterate, depended on the credibility of our commitment to low inflation over the medium term being preserved. I worried that chatter in the markets in late 2010/early 2011 marked incipient signs of fragility in that credibility. That was one of the reasons why, at the beginning of this year, I had expected to vote for an increase in Bank Rate at our February meeting. The weak output data for Q4 2010 published shortly before that meeting changed my mind, and the Committee’s course, as they revealed that the economy was softer than I had thought. Escape velocity In the months that followed, I made clear that, with inflation well above our 2% target, I would be looking for an opportunity to begin the process of withdrawing the exceptional monetary stimulus once the economy had achieved “escape velocity”. By that, I meant that the economy would need to be growing, and be set to continue to grow, at a rate that would gradually absorb the slack in the economy. “Escape velocity” has not yet been achieved.
I can also mention that the Governor of the Riksbank appears before the Riksdag Committee on Finance twice a year for a discussion on monetary policy. In addition, we Executive Board members hold around thirty speeches a year, in which we present our own views of the economic situation. All this means that there is ample opportunity for the general public to obtain an understanding of how monetary policy decisions are made and it creates conditions for a serious debate. In the long term, this reinforces the Riksbank’s credibility and legitimacy. How do we work with financial stability? As I said earlier, the Sveriges Riksbank Act states that we shall also promote a safe and efficient payment system. In other words, we are to safeguard financial stability. The Riksbank was the first central bank to publish a report containing a coherent analysis of financial stability in 1997, and we have published these reports twice a year since then. Other countries were more hesitant in speaking openly about the stability of the financial system. Some considered it impossible to be open on such issues if a crisis were to occur, while the Riksbank’s attitude was that openness also benefits financial stability. By discussing risks and vulnerabilities at an early stage, crises could be avoided. In addition, we had positive experiences of openness in the price stability field. It appears as though our method of working with financial stability has set a good example. Today around thirty countries have followed.

This is the first time we intervened in the foreign exchange market since 1999. Relatively quickly after the interventions, the market began to function more normally. 1/4  BIS central bankers' speeches  Later in spring, the krone appreciated on the back of a rise in oil prices and reduced uncertainty in global financial markets. Recently, oil prices have been broadly at the same level as at the beginning of 2020, and the krone is somewhat stronger than prior to the Covid-19 outbreak. In spring 2020, risk premiums in the Norwegian money market rose considerably. Norges Bank took a range of measures to improve market liquidity and ensure pass-through of a lower policy rate to money market rates and bank lending rates. Among other things, Norges Bank offered banks extraordinary liquidity in both NOK and USD. In advance of the monetary policy meeting in May, financial market stress subsided and premiums in both the money and bond markets fell. The normalisation of liquidity policy is well underway. By the end of August 2021, all extraordinary loans from Norges Bank to banks will have been repaid, and the relaxation of collateral requirements for loans from Norges Bank will be reversed. Downturn in the Norwegian economy Activity in the Norwegian economy fell abruptly in 2020 Q2. The Covid-19 outbreak and extensive containment measures led to production halts and lower activity across a range of businesses. Mainland GDP was around 11 percent lower in April 2020 than in February the same year. Many employees were furloughed or made redundant.
In my mind, there are three key imperatives that can facilitate ihsan in Islamic finance to ensure that it continues to provide strong support for "value-based growth" – one that is balanced, progressive, sustainable and inclusive. The first is the need for a whole-of-ecosystem alignment to the values of Islamic finance. In a beautiful hadith narrated by Abu Musa in the Sahih al-Bukhari, Prophet Muhammad (peace be upon him) said, "A faithful believer to a faithful believer is like the bricks of a wall, enforcing each other." This hadith reminds us that it is not going to be the work of one, but the work of many to reap the positive outcomes of Islamic finance. This would involve not only Islamic financial institutions, but also shareholders, investors, businesses, households, regulators and all players in the ecosystem. All stakeholders must understand and accept the fundamental goals of Islamic finance to fully harness its "beyond profit" proposition. The Shariah Advisory Council of Bank Negara Malaysia has identified seven fundamental values of Islamic finance. These are: (1) prevention of harm and attainment of benefit; (2) money only as a store of value or medium of exchange; (3) attainment of profit from accepting or sharing risk; (4) balanced wealth creation with wealth transfer and circulation; (5) assurance of transparency and traceability; (6) Shariah compliance, and (7) fairness and attainment of excellence.

MAS and SGX will no longer vet prospectuses with a view to determining if they contain inaccuracies in information or factual  BIS Review 14/2001  5  errors. Issuers and their advisers have to bear greater responsibility for ensuring accurate and adequate disclosure. After a prospectus has been registered, it is proposed that MAS be empowered to issue a stop order and prevent further issues of securities if a prospectus is found to contain misleading or incorrect statements, or to have omitted material information. Investors who have subscribed for securities on the basis of the deficient prospectus can withdraw their applications and have their monies refunded. The new prospectus registration regime is aimed at placing greater responsibility on issuers and their advisers to meet the high standards of disclosure necessary for the development of more effective market discipline, and a more mature capital market environment. MAS will be seeking feedback on the proposed prospectus registration regime shortly, as part of our public consultation on the draft SFA. Conclusion Approaches to regulation worldwide are evolving with the times. An effective system of market discipline is necessary to sustain and promote the growth of open, transparent and competitive markets. Singapore is making substantial changes to its laws, rules and standards to support enhanced market discipline. It will be a process of evolution, but we have made good progress. Succeeding in this endeavour will require effort by both the regulator and all market participants, including issuers, their advisers and investors themselves.