samchain/econo-pairs-v1 huggingface dataset:
I trust that this agreement, once it is finally approved by the ECB, may be implemented in the opening months of 2016 and that, in any event, future revisions of European legislation will envisage less room for discretion on the part of the Member States, so that the singleness of the relevant legal framework for banking activity throughout the EU may become firmly anchored. To wrap up this first part of my speech, allow me to highlight certain relevant decisions taken by the Supervisory Board during this first year. Among the most important are those relating to the Supervisory Review and Evaluation Process (SREP), which has for the first time been carried out with a common methodology for all SSM banks. This process, which includes both quantitative and qualitative aspects, determines the risk profile of each significant institution, the sufficiency of its liquidity and solvency in terms of this profile and, finally, it sets the minimum capital levels to be maintained. The decisions on capital, the adoption of which for 2016 will be shortly formalised, will, for all the SSM’s significant institutions, entail average capital requirements somewhat higher than those of the previous year: around 30 basis points (bp), rising to 50 bp if the impact of the phasing-in of the capital buffers envisaged in European legislation is taken into account.

Likewise, to achieve greater consistency in the regulatory framework, it has also been necessary to review the national application of the various options permitted under European regulations. European solvency regulations – namely the Directive and Regulation on capital requirements – confer some degree of discretion upon Member States and national supervisors in the implementation of specific regulatory aspects. Such aspects include the timetable for the progressive adoption of new solvency standards and the granting of exceptions in respect of compliance with certain prudential requirements. This degree of national flexibility had to be accepted at the time by European legislators in the complex Directive and Regulation negotiations. Naturally, the fact such a diversity of rules are in place hampers supervisory action and prevents the homogenous treatment of banks based on their objective position. Accordingly, in recent months, the SSM Supervisory Board has worked intensely in this field. Their efforts have seen a preliminary agreement allowing a common approach to be adopted in relation to the application of these “national options and discretions” in the hands of the supervisory authorities. The terms of this agreement are now being subjected to public consultation, a process which will finalise on 16 December.
With interest rates close to zero and a high Swiss franc, the minimum exchange rate is still the key monetary policy instrument for the SNB. Our monetary policy decisions have caused the SNB balance sheet to increase considerably. Due to the size of the balance sheet and the uncertainty on the capital markets, annual results are expected to be volatile in the foreseeable future. That is why we cannot provide you with any forecasts of the SNB’s future annual results. We are certainly very aware that the lack of a dividend is painful for many shareholders. However, as you know, the SNB is obliged by constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of the development of the economy. The SNB is required to gear its  1  Overall, illiquid assets totalling USD 38.7 billion were taken over. The funding was as follows: The SNB granted a loan of USD 25.8 billion and UBS provided 10% or USD 3.9 billion in the form of the purchase price for the option to repurchase the stabilisation fund at a later date. The difference between the funds paid into the stabilisation fund and the total sum of transferred assets was made up of contingent liabilities which, at that point, did not require any financing. 2  In 2009, the Confederation sold the equities arising out of the conversion of these notes to institutional investors, thereby ceasing its involvement.

Over the last 10 years, MoneySENSE has reached out to Singaporeans through many  2  Prelec and Simester, “Always Leave Home Without It: A Further Investigation of the Credit Card Effect on Willingness to Pay”, Marketing Letters 12, no. 1, February 2001. 2  BIS central bankers’ speeches  channels – schools, community events, workplace talks, newspapers, TV, radio, and now increasingly the internet – to reach out in every way we can to as many Singaporeans as possible. 12. We set up a new institute last year called the Institute for Financial Literacy (IFL) which was set up jointly by MoneySENSE and the Singapore Polytechnic. This institute has helped to bring financial education to working adults, who don’t have much time, but they can attend lunchtime talks and workshops free of charge at their workplace. To date, IFL had reached out to 12,000 people. Translating knowledge into action 13. What will be our focus for the next 10 years? First, we have to recognise that financial education is not just about knowledge, but also about inculcating the right values from young, and encouraging everyone to be pro-active rather than passive about their finances. At every income level and for every family, it really pays to prepare for the future. 14. Many think that they don’t have enough time, or just say they are not interested, or that there’s too much to plan for because it’s too uncertain. But it’s precisely because life has uncertainties that we need to make plans for the future.
For example, if an entrepreneur wants to start a new business in Spain, he or she has to go through 10 separate procedures, while doing so in Slovenia requires only two.14 In Latvia, incidentally, the figure is 4 procedures. Our economic structures in Europe also tend to be less conducive to technology adoption than in the US, a channel which has been found to be highly favourable for productivity growth.15 Indeed, an important explanation why, from the 1990s onwards, Europe has lagged behind the US in terms of productivity growth is the slower adoption of information and communication technology, in particular in the services sector.16 The reasons for this are several, but two themes are worth highlighting for the current policy debate. One is the relatively closed nature of services markets within Europe, which slows down the diffusion of new technologies. Given the relative importance of services in our economies, this weighs on aggregate productivity growth, as well trickling down to other sectors.17 This calls for the completion of the single market in services. A second theme is the relative rigidity of national labour markets. Reaping the productivity gains from adopting new technology tends to require fundamental organisational restructuring – for instance, due to the automation of certain tasks. This means that firms need to have the flexibility to reallocate workers to different tasks, which in turn requires them  13  Bartelsman, E.J., J. Haltiwanger and S. Scarpetta (2013), “Cross-Country Differences in Productivity: The Role of Allocation and Selection”, American Economic Review, vol. 103(1).

From the position of the BNB and in view of the goals for controlling inflation, it is very important that the country does not assume significant additional permanent expenditures, which are not backed by permanent revenues. There are two groups of risks associated with such an approach: (i) the risk of an inflationary spiral and (ii) the need for painful fiscal adjustments in the near future, whether in terms of revenue, i.e. by increasing taxes, or by cutting costs. Along with external factors, this would lead to a significantly more complicated macroeconomic environment for the Bulgarian banks. In terms of the external factors and their further complication and deterioration because of the war in Ukraine, most important will be the decisions of the big leading central banks, primarily the ECB in our case. There are already clear statements about three things that will happen during the third quarter of this year: (i) the ECB will effectively end net asset purchases from the beginning of July; (ii) subsequently the ECB intends to raise its key interest rates; and (iii) will do it again in September so that by the end of the quarter we will move away from negative interest rates. Obviously, in the following months and at least a year ahead we will be facing the challenge to find the very difficult balance between the measures to control inflation and the measures to prevent recession. How is our banking sector meeting the new challenges? Our starting position remains very good.
Under this scheme, the time required to issue in multiple markets will be the same as that for issuing in one market, reaping both cost and time savings for issuers. The cross border RMB channels with SIP and TEC, which I mentioned earlier, would also allow corporates in these locations to issue RMB bonds in Singapore. These initiatives in the debt and equity markets will allow companies to diversify their sources of funding abroad, more easily tap investors in overseas markets as well as broaden the array of debt investment choices in local markets. d.  Fund Management. There are two similar initiatives for mutual recognition of collective investment schemes in Asia. The first, among Singapore, Malaysia and Thailand, led by the ASEAN securities regulators. The second, involving Singapore, Korea, Australia and New Zealand, called the Asian Region Funds Passport under the auspices of APEC. These initiatives will widen the opportunities for investors and fund managers abroad. 13. In addition, we see evidence of partnerships among market participants, especially in the area of OTC derivatives which has been typically a fragmented market: a. Collateral Management. The global reforms for OTC derivatives have drastically increased the demand for collateral. To date, Asian collateral is not widely traded or commonly accepted outside of their home market. This has created inefficiencies as financial institutions can neither obtain specific, nor deploy excess, Asian collateral outside of their home market. Two developments have helped.

The credit easing package and expanded APP has been effective too in reducing wholesale funding costs for banks, allowing banks to pass on better funding conditions to their customers. Since summer last year the average cost of borrowing for euro area non-financial corporations has fallen by around 70 bps, and by 90 bps and 110 bps for NFCs in Spain and Italy, respectively. The latest evidence from the July Bank Lending Survey confirms the improvement in credit conditions. During the second quarter of 2015 credit standards continued to ease for firms, and even more so for households. Reflecting the endogenous relationship between credit supply and demand, credit demand also increased among both groups driven mostly by the low level of interest rates. The impact of the expanded APP on bank funding costs has been partially reversed by the recent market repricing. Here, however, the credit easing package and our broader asset purchases could act as complements, in particular the Targeted Long-Term Refinancing Operations. For the APP, the ECB defines the volume of liquidity it would like to inject, but cannot determine the price; for TLTROs, we define the price of the liquidity, but banks determine the volume. One tool can therefore act as an automatic stabiliser for the other. Indeed, as wholesale funding costs for banks have risen, so has the attractiveness of the TLTRO. This substitution effect accounts in particular for the higher participation in the fourth operation by banks in less vulnerable countries.
90  percent  70 75  60 50  60  40  54  69  72  51  45  30  65  61  57  48 47  65  64  60  44  20 30  *) other than those to the banking sector  15  total general government  suppliers other creditors  *) other than those to the banking sector Source: MPF, NBR 25  2016  2015  2014  2013  2012  2011  0 2010  2016  Private companies  other creditors general government suppliers; for more than 1 year suppliers; between 90 days and 1 year suppliers; between 30 and 90 days  Source: MPF, NBR  2015  2009  State-owned companies  2014  2008  2016  2007  2015  2006  2014  2005  0  2004  10  Figure 35. Annual dynamics of residential property prices 15  percent; 2010=100  Figure 36.

It was deemed necessary to be emphasised as a distinct risk that is on the rise on account of three reasons which make it more dangerous today than previously: (i) the reduction in the vulnerabilities in banks’ balance sheets (through the clean-up of the non-performing loan portfolio) does not translate into a corresponding decrease in the vulnerabilities in firms’ balance sheets, which reveals the persistence of structural issues economy-wide; (ii) the vulnerabilities in firms’ balance sheets have persisted even in an environment of above-potential economic growth; and (iii) after the conclusion of the arrangement with the International Monetary Fund and the European Union, part of the reforms carried out during the period covered by the agreement with regard to strengthening payment discipline in the economy (cutting arrears, in particular) were reversed. 7  In fact, the reversal of structural reforms seems to have started shortly after the completion of the arrangement with the IMF and the EU, being manifest in the case of at least two of the highlighted risks: the tensions surrounding macroeconomic equilibria (as a result of giving up fiscal consolidation) and the weakening payment discipline in the economy. A risk of lower magnitude, yet related to the increase in household indebtedness, refers to property prices. The faster increase in property prices further poses a risk to the banking sector, as credit institutions’ exposures to the real estate market are substantial.
Key rates and rise in labour costs Per cent Interest rates 8  New Zealand Australia Canada UK US Denmark Euro area  6  Norway  4  Sweden 2  Japan 0 0  2  4  6  8  Rise in labour costs, 1998-2000  Norwegian key rates are currently 1½ percentage points higher than in the US, 2¼ percentage points higher than in the euro area, and 3 percentage points higher than in Sweden. In some countries, short-term interest rates are now moving down and in other countries expectations of interest rate increases have receded. Norges Bank has a neutral bias with regard to interest rates developments, partly reflecting price and cost developments in Norway, as illustrated in the chart. In general, it can be argued that when wage and cost inflation is expected to rise and deviate from the rate of increase in the euro area, or when unexpected upwards shifts in labour costs occur, interest rates must be raised to avoid rising inflation and a weaker krone. In our open economy, with a floating exchange rate, it can be assumed that an increase in wage growth of one percentage point will gradually translate into a corresponding increase in price inflation unless the wage increases are anchored in higher productivity. The magnitude of the increase in interest rates must be consistent with this. First, nominal interest rates must be increased in order to maintain real interest rates.

The government’s five largest stakes in Norwegian companies can be roughly estimated at NOK 300 billion. In general, concentrated ownership requires a more strategic ownership approach and gives rise to higher risk than diversified ownership. 10  BIS Review14?/2001  Risk associated with state ownership NOK bn 300  The five largest state enterprises Petroleum Fund's bonds Petroleum Fund's equities  200  100  National Insurance Fund's private bonds  National Insurance Fund's equities  0 0  10  20  Return risk  This is illustrated further in the chart. The composition of government assets is broken down into equities and bonds in the Petroleum Fund and the National Insurance Fund and government ownership interests in the five largest companies. The horizontal axis provides a normal measure of risk, in other words the standard deviation of the return. The risk is estimated on the basis of the historical performance of the companies’ share prices. For unlisted companies, we have used share price performance for comparable international companies. Higher risk means that the assets are more exposed to fluctuations in return. As a whole, the return on the Petroleum Fund and the return on private bond holdings in the National Insurance Fund feature a moderate risk profile. The risk is higher for both the National Insurance Fund’s equities and the state’s ownership interests in the five largest companies. For a given expected return, the owner should aim at reducing risk because future income will then be more secure.
Sweden’s Riksbank and the SNB, however, lowered their reference interest rates almost to the 0% bound,3 thereby de facto exhausting their room for manoeuvre using conventional monetary policy measures. Movements in nominal exchange rates in Europe, which will play an important role in the second and third phases, varied from one country to another during this first phase. There was already upward pressure on the Swiss franc (cf. chart 5), due to the currency’s traditional role as a safe haven. In times of substantial global uncertainty, investors take refuge in such currencies, which subjects them to upward pressure. 1  Chart 3 shows consumer price indices in the Czech Republic, Denmark, the euro area and Switzerland. For Sweden, the CPIF, of relevance for the Riksbank, is shown; this is a consumer price index that assumes fixed mortgage rates and thereby excludes the effects that interest rate changes have on households servicing mortgage debts. In this chart and those that follow, data is shown only until the end of 2015. 2  Chart 4 shows the following reference interest rates: for Switzerland, the middle of the target range for the threemonth Libor; for Denmark, the central bank’s lending rate; and for the Czech Republic, the euro area and Sweden, the repo rate for monetary policy operations. 3  In Sweden, the overnight deposit rate was lowered into negative territory in 2009. This facility, however, was and is almost never used – rather, the intraday deposit facility is used, and its rate remained positive in 2009.

Demand slump following the onset of the financial crisis (2008–2011) The key event following the onset of the financial crisis was the collapse of the Lehman Brothers investment bank in September 2008. The subsequent weeks and months saw a sudden, substantial slump in demand for goods and services. Between 2008 and 2009, global imports and exports fell by some 25% in nominal terms, the sharpest decline since records began in 1948. The euro area, and the neighbouring countries examined here, slipped into recession (cf. chart 2). GDP in the euro area plunged by around 5% in 2008 and 2009, at the height of the crisis. The drop in the neighbouring countries ranged from 3.4% in Switzerland to 7.2% in Denmark, whose economy had experienced a phase of overheating in pre-crisis years. Inflation rates fell sharply due to lower demand and falling oil prices (cf. chart 3).1 Inflation in the euro area declined to −0.6% in the course of 2009. The lowest inflation recorded during this period was −1% in Switzerland. In the Czech Republic, too, inflation was negative for a short period in 2009. In Denmark and Sweden, it remained in positive territory. Central banks reacted to the global slump in demand with drastic interest rate cuts – the conventional monetary policy instrument (cf. chart 4).2 In addition, markets were provided with large amounts of liquidity. In the Czech Republic, Denmark and the euro area, there was still leeway for further steps even after these interest rate cuts.
Since joining the IMF, Romania has been part of the Dutch Constituency. In 2012, Belgium and Luxembourg joined, establishing the Dutch-Belgian Constituency, one of the largest and most diverse constituencies at the IMF. I have to mention that the National Bank of Romania has extensively benefited during the whole transition process from technical assistance from members of this Constituency in two essential banking areas, such as bank supervision form the Nederlandsche Bank (DNB) and market operations from the National Bank of Belgium. Actually, the first Law on the Statute of the National Bank of Romania was drafted following the model of the National Bank of Belgium, while the Dutch influence goes even further back in time. If history simply wanted to repeat itself: one knows that the name of our national currency draws its name from the löwenthaler (leul taler), a silver Dutch coin that circulated approximately four hundred years ago. Allow me to introduce, even though many of you already know him, Paul Hilbers, the IMF Executive Director of the Dutch – Belgian Constituency, a very dear and old friend of Romania. I would like to thank him for his current work representing our country within the IMF Executive Board, and for all his support throughout his career.

The main way we achieve these goals is by controlling the federal funds rate, the rate at which banks lend each other money overnight in the form of unsecured loans. This rate in turn affects overall financial conditions and thereby the wider economy. At each of its meetings, the Federal Open Market Committee (FOMC) decides on the target range for the federal funds rate, which currently stands at 1-3/4 to 2 percent.2 But how does this work—that is, what keeps the federal funds rate within the target range? The Fed has an operational framework in place designed to keep interest rates where the FOMC wants them. We call this an “ample reserves” regime. Back in January of this year, the FOMC communicated its intention to continue to implement policy according to this regime.3 The key benefit of this approach is that it’s a simple, effective way of controlling the federal funds rate and thereby influencing other short-term interest rates. The ample reserves framework has three elements designed to maintain the federal funds rate within the target range. The first, not surprisingly, is supplying an amount of reserves that banks hold at the Federal Reserve that is “ample.” By that, we mean that the supply of reserves is adequate to efficiently and effectively implement monetary policy. Here, “efficient” means that the level of reserves is not excessive, relative to what’s needed to be effective.