samchain/econo-pairs-v1 huggingface dataset:
In connection with this, a number of provisions of a compulsory nature were introduced to prevent the possibility of the state being placed in a blackmail situation. For instance, an act was introduced that meant in principle that the Swedish Bank Support Authority could make decisions in the bank through a state compulsory purchase of the shares if the bank’s capital adequacy fell below two per cent. But these temporary provisions, like the general bank guarantee, ceased to apply in 1996. The Bank Support Authority was transformed into the Deposit Guarantee Board, which was given the task of managing the deposit guarantee and investor protection. Since then it is in principle only the general regulations for competition and liquidation and the system for the deposit guarantee that are available for managing institutions with problems. Unfortunately it is not particularly appropriate – if even possible – to apply the general competition regulations to banks. The regulations on competition and liquidity are primarily to protect the interests of the creditors. They are not particularly well-adapted to take into account society’s interest in maintaining the stability of the financial system. The primary task of a receiver in a bankruptcy is to safeguard the interests of the creditors. He or she has neither the authority nor can be expected to have the skills required to take the measures needed to safeguard the stability of the financial system. Problems which threaten stability require immediate action. Bankruptcies usually take years to resolve.

And it must be possible to distribute the socioeconomic burdens in the wake of a cross-border crisis in a reasonable and preferably fairly predictable manner. Otherwise there is a risk that conflicts between national interests will make the management of a crisis more difficult and prolonged. Another aspect which has come to the fore in the recent financial turmoil is the banks’ increased dependence on liquidity in the securities markets for their risk management and financing. Central banks around the world need to examine whether they have the necessary tools to manage coming liquidity crises. The question of when and how liquidity support can be given and how such a decision should be communicated without having a stigmatising effect that counteracts its purpose may require new ways of thinking. 10  BIS Review 30/2008  Better regulations and increased cross-border cooperation are necessary Let me in conclusion observe that the financial turmoil currently prevailing bears a number of clear parallels to many other financial crises – not least the Swedish bank crisis of the 1990s. The bank crisis was in many ways the wake-up call that made the Riksbank and other authorities realise the serious consequences that a lack of stability in the financial system can have. It led to the Riksbank developing an analysis capacity in the field of financial stability. Ten years ago the Riksbank published the first of its now regular Financial Stability Reports. I can warmly recommend that you read them.
For instance, the Riksbank monitors and analyses the financial system, identifies potential risks and influences participants that are important to financial stability. We shall work to prevent financial crises from arising, but if they should nevertheless arise, it is our task to manage the situation. What does this mean? For instance, we must be prepared to act in situations where our assessment is that financial stability is threatened. Let us assume, for example, that a Swedish bank which is under the supervision of Finansinspektionen, the Swedish Financial Supervisory Authority, is solvent and has assets that are greater than its liabilities, but experiences serious problems with its liquidity and thereby difficulty in meeting its payments. If the Riksbank’s assessment in such a situation is that the stability of the financial system is at stake if the bank collapses, then we can intervene with measures to aid liquidity. The United States is currently in the midst of a financial crisis, the backwash of which is sweeping through the global financial system. Although financial turbulence has been included in our analyses ever since last summer, the way it has manifested itself and the intensity of the events has varied along the way. And in recent weeks the problems have escalated. The most recent wave of financial turbulence is the worst so far since the original US mortgage crisis broke out. So what has happened recently? For one thing, large agents in the US financial market have suffered acute problems.

This means that the credit granter is more protected than in the case of ordinary bonds. Covered bonds are therefore good collateral and many other central banks accept these bonds on a larger scale than the Riksbank. In our case the permitted share was raised from 25 per cent to 75 per cent. This measure means, put in very simple terms, that participants in the RIX system can use more collateral to borrow against if necessary. Another measure is that, for instance, the Riksbank and the central banks of Denmark and Norway, together with the US Federal Reserve, have reached an agreement for the purpose of increasing access to dollars in the Scandinavian financial markets, if necessary. For the Riksbank this involves the possibility to obtain access to US dollars in addition to the foreign currency reserve. This is what is known as a swap facility and amounts to a total sum corresponding to USD 10 billion. Our assessment is that it will probably not be necessary to use the money. It is nevertheless important to demonstrate that we are prepared to act if it should prove necessary. The agreement can be quickly put into operation if it should actually become necessary. Financial stability is satisfactory What is happening now has not come as a bolt from the blue. And it is not a question of the central banks sitting with their arms folded ignoring the risks taken by the commercial banks.
3  See Chancellor of the Exchequer: A Plan for Jobs 2020 See speech by Jon Cunliffe (2020): Financial System Resilience: Lessons from a real stress 5 See letter from FSB Chair Randal Quarles to G20 Finance Ministers and Central Bank Governors: July 2020 4  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  Since central banks acted, markets have opened up again, allowing companies to raise finance. Britain’s companies issued more than £ of new bonds since March. A second response was also needed. The seizure of corporate debt markets meant that larger companies that normally enjoy market access were suddenly faced with uncertainty about access to that finance when it was most needed. They turned, as a precaution, to banks to bolster their cash positions. What followed was not a run on the banks driven by fear about the banks, but a run to the banks driven by fear on the part of businesses about their own access to finance. In a complete contrast to what happened in the 2008 financial crisis, bank lending shot up. Net of repayments, banks lent £ in March – more than 30 times their normal monthly net lending flow as large companies drew on committed credit lines. That threatened to overwhelm the capacity banks have to lend to the wider population of businesses. The Covid Corporate Financing Facility (CCFF), owned by the Treasury and operated by the Bank of England, was designed to alleviate that pressure.

Those losses could far outweigh the small gains they might enjoy from protecting their balance sheets in the short run.8 So lend they have. Businesses have now raised – net of repayments – more than £ from banks since February. More than £ of new lending has occurred through the 100% government guaranteed Bounce Back Loan Scheme. These 1 million loans are vital for many of the smallest businesses to bridge the disruption. But they do not help to finance the cash-flow deficit of medium and large sized companies that I described earlier. Banks have lent £ has been lent to these companies, net of repayments. Within that, there has been £ of lending approved through 55,000 loans under the CBILS scheme; a further £ through 428 loans under the CLBILS scheme. Add to that at least £ of new bond issuance and £ lent through the CCFF and these companies have raised at least £ of new debt. 6  See May 2020 interim Financial Stability Report On 11 March, the FPC reduced the UK countercyclical capital buffer rate to 0% with immediate effect, and set out its expectation that it would maintain this rate for at least 12 months.
This calls for increased innovation on the part of the financial sector in developing products to support a growing economy. Ladies and Gentlemen, in conclusion, may I simply state that as we consolidate macro-economic stability, we are committed to achieving the necessary economic growth that will have a bearing on poverty levels in the country. In this regard, we see the future of the Zambian economy as one which  BIS Review 72/2006  5  is highly diversified through resuscitating the industrial base to enable increased value addition and employment creation. We strongly believe that increased value addition is key to sustained development. I would like to urge you all and those in the private sector that are not with us to take advantage of the immense investment opportunities in our country. Let me once again thank you for inviting me to share my thoughts on this important topic. I thank you for your attention. 6  BIS Review 72/2006

Thomas Jordan: Current monetary policy and its significance for the real economy Summary of a speech by Mr Thomas Jordan, Vice-Chairman of the Governing Board of the Swiss National Bank, at the General Meeting of the Aargauische Industrie- und Handelskammer, Wettingen, 20 May 2010. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  In the current situation, the challenges for the SNB’s monetary policy remain formidable. On the one hand, against the backdrop of the economic recovery we have witnessed since mid2009, there is a danger of inflationary tendencies and the renewed formation of a bubble. This is because the current monetary policy is too expansionary in the long term. On the other hand, downside risks are still present or are again reappearing, and should not be underestimated. They relate, in particular, to the further development of the debt crisis in Europe. A deterioration of this situation entails the danger for Switzerland of renewed deflation and recession as well as the risk of another destabilisation of the global financial system. Between these opposing risks the SNB must walk a fine line, moving in terrain that is constantly and rapidly changing, depending on which risk gains the upper hand. With a monetary policy strategy aimed at maintaining price stability, the SNB is well equipped to face these challenges. What are the short and medium-term consequences for the real economy of addressing these challenges?
I should mention here that though copper mining has again become prominent in terms of exports and to some extent employment, Government strategies and policies are focusing on reducing the country’s dependence on copper mining through economic diversification as articulated in the FNDP (2006-2010). In our diversification efforts, due attention will be paid to those that have high potential for creating employment. This will make our economy resilient to future external shocks and ensure sustained development, and have a required impact on the quality of life of the Zambian people. Manufacturing Ladies and Gentlemen, the Zambian Government has demonstrated its commitment to the development of a vibrant but competitive manufacturing sector in this year’s national budget. This is in line with its commitment to facilitate increased value addition which is one of the key ingredients in achieving sustainable development in the country. To this effect, several measures and incentives aimed at enhancing the competitiveness of the sector will be provided in conformity with the future growth objectives. One such example is the Government’s move to implement a new initiative called the Multi-Facility Economic Zone (MFEZ). This will replace the Export Processing Zones (EPZ), as special industrial zones for both export-oriented and domestic-oriented industries. The zones will have all the necessary infrastructure for the easy commencement and conduct of manufacturing activities. In addition, several concessions will be provided for those companies that will operate in the MFEZ.

I am positive that with improved macroeconomic stability there will be more investment in such productive activities. Tourism Distinguished guests, tourism is another of Government’s priority sectors from which growth and employment are expected to be generated. One of the key aspects of Zambian tourism is the  4  BIS Review 72/2006  increasing participation of locals in the sector through among other activities establishment of lodges that are complimenting the traditional hotels and offering services with a Zambian touch. It is worth mentioning that tourism, more than any other sector, is labour intensive and provides jobs for local people in both rural and urban areas. In order to stimulate the potential of this sector, there will be need to facilitate access to affordable and sufficient credit, entrepreneurship (private sector capacity building) training, improved marketing and provision of the necessary support infrastructure. Access to most of these tenets will enable the local small scale investors to provide competitive tourist services. Ladies and Gentlemen, may I also add that tourism should not be based on wild life (visiting national game parks) alone. Here on the Copperbelt, you have a unique opportunity to develop a tourism industry based on copper mining - e.g. going underground. Collectively, we can also encourage and promote eco-tourism in much of rural Zambia. Energy sector Mr. Chairman, a growing economy needs sufficient, stable and affordable energy supply. I have here in mind the electricity sector.
That is for the Pensions Commission next year, and the Government in its turn. But I do want to show that risk is at the heart of the issue. 2. The nature of risk  “In this world nothing can be said to be certain, except death and taxes” wrote Benjamin Franklin in 1789. Great man though Franklin was, it is clear that there is indeed substantial uncertainty both about death, or at least its timing, and the contributions or taxes required to pay for our pensions. When thinking of how much to save for retirement, there are three main risks to consider. First, how much will we be earning in the future? Second, what will be the rate of return on our savings? Third, how long are we likely to live? Tonight I shall focus exclusively on longevity risk - the uncertainty about how long we shall live - in order to focus on my two propositions about probabilistic thinking and public policy.4 None of us know how long we shall live. But we can assess our chances by looking at the experience of others. A key distinction is between individual and collective risk. Chart 1 plots the observed mortality rates at different ages for women in England and Wales in 2002, the most recent year for which detailed data are available. (A similar story can be told for men). The most common age of death for women was 87, but many died at very different ages. Mortality among individuals varies greatly - individual risk.

On the Bank of England’s Monetary Policy Committee the nine members debate among themselves our current state of knowledge of the  7  The data in Chart 5 are for occupational pension holders of Actuarial Profession member institutions. These individuals are typically wealthier than the rest of the population, and for that reason tend to live longer. 8  Peterman et. al. (1988) found that the probability of infecting a partner was unrelated to the number of sexual acts with that partner. 9  The large models made the further simplifying assumption that the rate took one of only two values. In fact, it varies widely among the population. Robert May, and his colleague Roy Anderson, showed that a key driver of the proportion of the population eventually infected was the “variance of the rate of acquisition of new sexual partners”. Simulations of the proportion of the population ultimately infected with AIDS are sensitive to that variance, and plausible differences in the number of their partners among different people changed the estimate of the proportion likely to be infected from 25% to 90%. 10  Many non-economists believe that economists use a single “model” to explain all economic phenomena. Hence the interest of many commentators in “the model” that is alleged to generate the forecasts of inflation and economic growth published by the Bank of England. But, as we never cease pointing out, the Bank uses not one but many models to help us understand particular aspects of economic behaviour.
I therefore wish to implore Bank of China to continue playing an effective role and stimulate economic activity by providing well structured financial products and services, especially those aimed at boosting growth in key sectors such as mining, energy, tourism, manufacturing and agriculture. However, in order to achieve this, there is need for Bank of China and other commercial banks to do more in terms of reducing lending interest rates and influence the safe expansion of private sector credit and at the same time contribute to the reduction of the cost of doing business in Zambia. The current environment of relatively low inflation and stable exchange rate offer a good opportunity for lowering commercial banks’ lending interest rates. Ladies and Gentlemen, let me conclude by further challenging Bank of China (Zambia) Limited to expand beyond one branch and broaden its customer base and operations swiftly in order to consolidate the gains that have been achieved over the last 10 years. I thank you. 2  BIS Review 36/2007

If reserve losses are sterilized and the underlying cause of capital outflows is not addressed, reserves losses can be persistent. Macroprudential policy provides an additional tool that can add degrees of freedom and help soften the tradeoffs of the trilemma. Macroprudential policy can potentially temper spillovers by modulating the type of buildup of financial imbalances that contributed to the Asian crisis of 1997, countless other emerging market crisis, the global financial crisis of 2008 and the subsequent euro area crisis of 2011. Progress continues to be made in designing macroprudential policy frameworks, in definition of objectives, and in developing appropriate instruments, calibration and communication. Capital flow management can be viewed as the part of the macroprudential toolkit that operates across borders. Over the last five years, capital flow management has received increased attention, first in managing inflows and, more recently, in managing outflows.6 A consensus has emerged that capital flow management can be useful as part of a broader set of policy tools. In fact, the effectiveness of capital flow management may be limited if not appropriately supported by monetary, fiscal, exchange rate and prudential policies, or the  5  Obstfeld, Shambaugh and Taylor (2005), Goldberg (2013), Klein and Shambaugh (2015) and Obstfeld (2015). 6  G20 (2010), IMF (2012), Farhi and Werning (2014) and IMF (2015). 2  BIS central bankers’ speeches  warranted macroeconomic adjustment. Also, capital flow management practices that are transparent, temporary, and targeted seem to work best.
The banks, on the other hand, were funded by deposits and short-term bonds, but were not allowed to issue long-term 2  BIS central bankers’ speeches  mortgages. However, the mortgages were indirectly funded by the general public’s savings in that the banks were forced to invest in housing bonds. In the 1960s, the general pension fund (AP fund) was established, which meant that the state gained further control over savings in the economy and over the conditions for the banks’ funding. When pension allocations began to be deposited with the AP fund, it quickly grew to become the largest investor in mortgage bonds, among others. Developments accelerated when the credit and currency markets were deregulated in the mid-1980s at the same time as technological developments were beginning in the financial markets. New participants entered the markets and began to offer new financial products, such as saving in unit trusts. The Swedish banks were not slow in following the trend and began to offer their customers their own unit trusts. Saving in unit trusts involved gains for both the banks and households. The banks gained a new source of income and households were given the opportunity to actively invest their savings and spread risk. State initiatives have since continued to push household saving towards the securities market. “Allemansfonder” (national public saving funds), investment savings accounts, unitlinked insurances and individual pension savings are all examples of savings forms that are under certain circumstances taxed at a lower rate than savings in traditional bank accounts.

As I said at the start, developments in the real economy and developments on the financial markets are interlinked and problems with financial stability thus risk having a negative effect on growth in the real economy. Problems on the housing and mortgage markets thus risk intensifying an economic slowdown by means of the financial markets and resulting in rising unemployment. As such a situation would affect demand in the economy, and thereby monetary policy, we cannot close our eyes to the risks linked to high household indebtedness. This is the case even though the Riksbank has limited opportunities to do anything about the underlying factors that are pushing up household debt. Many people believe that macroprudential policy, which is now becoming established in Sweden, will resolve the problems of high household indebtedness all on its own. I do not think it is that simple. I believe that macroprudential policy is at present only able to alleviate the problems by increasing the banks’ resilience to these risks and hopefully also dampening the indebtedness to some extent. What do we need to do to obtain a better balance in the long run and to attain a development that is sustainable in the long run? I believe that we need input from several areas. In recent years, a number of measures have been taken to dampen household indebtedness. For instance, Finansinspektionen (the Swedish Financial Supervisory Authority) has introduced a mortgage ceiling that limits how much a household can borrow in relation to the value of the property.