samchain/econo-pairs-v1 huggingface dataset:
A bank can also profit if it is more competent than its competitors in some areas, for instance in offering certain services or if its organisation runs smoother and more efficiently or if it is regarded as being more reliable or customer-friendly than other banks. For various reasons, Swedish banks have rapidly gained market shares in other markets. It has proved more difficult for foreign banks to gain inroads into the Swedish market, with the exception of the Danish bank I mentioned. The main challenge from cross-border operations comes from the new risks to the bank. It will start operating in a new legal environment and in a new customer market. If the bank has not prepared itself carefully, it may run into unexpected problems because it approaches the new situation in an erroneous way. A challenge for the cross-border banks as well as the authorities is to monitor the activities on a consolidated basis for the whole bank group in all countries where it operates. It is important for the head office and the supervisor to identify early any indication of problems in the entities abroad and to take the necessary measures. If this does not take place, the problems may grow and threaten the  4  BIS Review 111/2006  survival of the bank. In a crisis situation, the bank together with the authorities must decide on the appropriate course of action. This can lead to difficult questions such as whether a bank branch or subsidiary abroad should be closed or rescued.

In fact, after the consolidation phase we have witnessed a period in which the number of banks and bank-like institutions in Sweden is increasing. The new ones have mostly been small banks specialising in certain activities and services, for instance linked to major retail store chains and benefiting from the cash flow from the stores’ customers. We call them “niche banks”. Sweden never had a large share of state-owned banks in its financial system. In the crisis one bank had to be nationalised during the resolution phase but that bank was rapidly merged with another bank. Another of the banks which suffered during the crisis was state owned already at the outset but the shares of this bank were gradually sold to private investors as soon as the bank had recovered its financial health. The Swedish government remains a shareholder in the bank but holds only 19 percent of its total equity capital. Today, this bank which is named Nordea, is highly profitable and has formed a large group which has significant market shares in the countries in the Nordic region. As a government official deeply involved in the banking crisis, I took the decision that although some banks had to be rescued by public funds, the management of the banks should be left to professionals, without undue operational interference from the government. The banks should be run in accordance with market conditions just like any other bank.
1  4  Regional Indexes of Coincident Economic Indicators  BIS central bankers’ speeches  This has happened without much help from the securities industry (Wall Street), a key driving force behind past local economic recoveries. The strongest job growth has been in professional and business services, leisure and hospitality, and – importantly for the Bronx – education and health services. Although closely linked to the rest of the city, the borough has its own vibrant economy. Some manufacturing takes place here, particularly in food, apparel and textiles. In addition, Hunts Point may be the world’s largest food distribution center. However, the largest sectors – health and education services – account for nearly half of all private jobs in the borough. In education, the Bronx hosts Fordham University and the Albert Einstein College of Medicine, among others. As for health services, numerous facilities include the Montefiore Medical Center, now the borough’s largest employer. I am pleased to report that the Bronx, unlike the nation and the city overall, sustained almost no net job loss during the recession. While national employment remains well below its prerecession peak, the Bronx has added 10,000 jobs since the recession began. Some of this resilience is due to the borough’s concentration in health and education – the only sectors that grew nationally during the recession. Another factor is that Bronx residents largely rent their homes, so they were less vulnerable to the fallout from the housing crisis. This is not to say that all is well here.

Some 12 percent of the Bronx workforce – a painfully high share – is jobless and less than a fifth of its adult population hold a college degree. The seeming disconnect between the pace of job creation here and high unemployment reflects commuting patterns. Many Bronx residents work in Manhattan and other places where job trends have been less favorable. In addition, not all jobs in the Bronx are filled by borough residents. High unemployment and low average levels of education help explain why the per capita income here is less than two-thirds of the national average. A quarter of the population here lives below the poverty line, more than double the national rate. Reducing poverty and raising the graduation rate are clearly major challenges for policymakers here,2 even though the Bronx, like the city, seems headed in a promising direction. How are families here doing in reducing their debt to more sustainable levels? Let me tell you what our special consumer credit panel reveals about the Bronx.3 Families here, as renters, carry relatively little debt. However, it worries me that in contrast to falling debt levels elsewhere, Bronx residents have not reduced their indebtedness during the last two years. Also troubling is the 17 percent of household debt in the Bronx that is seriously delinquent: roughly double the rate in the state and nation. Plus, the number of delinquencies is still climbing here, even though they are falling in the state and nation.
1  Such liquidity may be secured against a wide range of collateral, building on the collateral eligible in Sterling 2  Monetary Framework operations. The Bank’s objective would be to provide liquidity in sterling or foreign currency as required, in the necessary scale and for a sufficient period of time to allow the firm to make the transition to market-based funding. The terms would be set in a way designed to support the effectiveness of the resolution regime, incentivise the transition of the firm back to market-based funding, and protect public money. Confidence in the regime for the resolution of international banks is of crucial importance to the UK. We are home to a number of major international banking groups. But equally, if not more important, we are host to a very large number of foreign banks, many of which have sizeable wholesale market operations in the UK. As the leading international financial centre, we import considerable risks from other jurisdictions. It is therefore crucial to financial stability in the UK that we can rely on foreign banks operating in our jurisdiction having viable resolution strategies in line with international standards. Absent such assurance, we would need to ensure the entities operating here have greater resilience locally. Non bank resolution  It was the failure of systemic banks in the crisis that exposed the lack of an effective resolution regime.

It would be hard to avoid the country misunderstanding that any such commitment was conditional on the outlook; in other words that our plans could and would change as the outlook changed. And the current strategy has been consistent with a mildly upward-sloping money-market curve, which signals that the market is confident – as it should be – that the MPC will retighten monetary conditions when in due course that is warranted by the medium-term outlook for inflation. Our 2% target is a valuable anchor in shaping and implementing our strategy. In this, insurance companies are by no means on the sidelines. By focusing our purchases on medium and long-maturity gilts, we are aiming in part to shift the composition of the portfolios of long-term investment institutions. And it was encouraging, therefore, that the money holdings of non-bank financial institutions expanded recently. Some economists argue that gilts and central bank money are near perfect substitutes, so that the effect of our Quantitative Easing will be negligible. They may well be close substitutes for traders. But I doubt they are perfect substitutes for insurance companies and pension funds, many of which probably don’t participate in the secured deposit “repo” markets for switching gilts into cash; and which in any case desire assets with a longer “interest-rate duration” than money. If so, holding zero-yielding money balances will not suit them, and we could reasonably hope for increased demand for, perhaps, corporate bonds and other financial assets. Risk premia might decline slightly.
Mr. Bäckstöm remarks on the Swedish economy Address by the Governor of the Bank of Sweden, Mr. Urban Bäckström, at Svenska Handelsbanken’s seminar in New York on 7/10/98. First of all I should like to thank Svenska Handelsbanken for the invitation to meet with you today here in New York. I arrived late yesterday from the 1998 Annual Meeting of the International Monetary Fund in Washington D.C. The discussions in Washington over the weekend focused on the current problems in the world economy. At the centre was of course the crises in emerging markets that began in Thailand last year, which spread to other economies in East Asia and Russia and which most recently have been pressuring economies in Latin America. Lately, we have also seen some contagion effects spreading to the industrial countries. Stockmarkets have been falling and there have also been some problems in connection with the Long-Term Capital hedge fund. However, today I will talk about the Swedish economy. I shall be using a fairly broad brush to paint you a picture of how our economy has developed in recent years and I will conclude by saying a few words about the present situation in my country. Positive trend in recent years The Swedish economy is now entering its sixth consecutive year of favourable growth. The average annual GDP growth rate since the summer of 1993 is almost 3 per cent. This is an improvement compared to the average that has characterised our economy in the past twenty-five years.

A recent Banco de España’s research paper documents that this programme also had a positive side effect on the access of SMEs to funding given that banks reallocated the credit previously granted to bond issuers to smaller firms that do not have access to financial markets.7 Among the more permanent factors that could have contributed to the recent trend of financial disintermediation is the introduction of the new global banking regulation as a reaction to the financial crisis. The new regulation aims to improve primarily the resilience of banks to shocks and will have a positive impact on overall financial stability. However, as it has been documented in some papers, these regulatory measures might also reduce somewhat the ability of banks to compete in the intermediation of some financial flows8. But going forward, it is still under debate at the global level to what extent elements of the new regulatory framework should be also applicable to some non bank financing channels, as long as they might share with banking activities similar underlying risks to financial stability, such as maturity transformation and high leverage. If finally applicable, this might imply a more level playing field between banking and non bank intermediation. Another permanent factor that is contributing to the development of capital markets in the EU is the launch of new markets such as the alternative stock and fixed-income markets aimed at attracting medium-sized companies, although the size of these markets is still relatively small.
-1.5 1991  1996  2001  2006  2011  2016  2021  Two-quarter averages. Sources: ONS and Bank calculations. A more obvious contributor is the pace of hiring in the public sector. Since the beginning of the pandemic employment in public services has risen by over 4% (Chart 17). Some of this could be temporary – people hired for “track and trace”, for example, or to administer vaccines. However, based on the spending plans in the November Budget, the OBR expects overall employment in the public sector to carry on growing, by a further 3% over the next three years. If some of the recent hires are temporary they look set to be replaced by others7. In the summer, it looked as though the remaining numbers in the furlough scheme might also be part of the answer. On the face of it, in July, there were still 1.6 million private-sector jobs – around 6% of the total – still in the CJRS. In principle, all these people were ready and able to come back fully into employment and quench the growing thirst for labour. But even then it was puzzling that more of them hadn’t already been re-employed: even when furlough costs were paid in full by the taxpayer it would presumably have been cheaper for firms just to pick up someone on furlough than to go looking for someone else and post a new vacancy. That puzzle became more acute once firms were required to contribute progressively more to those costs.

The aggregate rate of inflation is likely to rise further over the next few months and the chances are that it will comfortably exceed 5% when the Ofgem cap on retail energy prices is next adjusted, in April. The cap is based on a trailing average of forward prices in wholesale energy markets. The relevant period for next April is between August this year and February 2022. Two-thirds of the way through we can already be reasonably certain (unfortunately) of a further significant rise in retail energy prices next spring (Chart 1). Chart 1. Gas bills likely to rise significantly again next April 900  Average bill, £ per year  Wholesale cost (p/therm)  Chart 2. Goods prices account fully for the current overshoot in inflation relative to target Percentage points  140 120  800 100 700  Gas bill (LHS)  600 Wholesale gas costs relevant for each Ofgem cap period (RHS)  500 400 300 2019  CPI inflation (per cent)  2021  2022  2023  4 Other goods (39%)  3  80  2  60  1  40  0 Food and non-alcoholic beverages (11%) Fuels and Electricity and gas (3%) lubricants (3%)  20 0  2020  Services (43%)  5  2024  The Ofgem cap is adjusted twice a year.
So far, the repricing of assets and the unwinding of positions have been quite orderly and the financing of the US current account deficit continues to be smooth. In broad terms, bond yields have increased, equity prices have declined, and the US dollar has appreciated in nominal effective terms. In terms of policy, the key issue in the global economy now is how to manage the transition to a higher interest rates environment so as to safeguard economic stability in view of the continued firm growth. Another is the management of the risk that higher oil prices might affect the global recovery. And the third is the issue of addressing the major global imbalances without creating serious volatilities to the financial markets. Let me turn now to the domestic economy. This year a theme that has kept recurring in my presentation of the Thai economy is that of risks and adjustment. This is to say that, for Thailand, this year has been a year of greater risks and the key theme has been adjusting to risks as the global economic and financial environment has become less helpful. The key external pressure an the Thai economy throughout this year has been the higher oil prices, the higher global interest rates, and the potential impact an our exports of a slowing Chinese economy. This year, we also have our own domestic challenges.

We must also recognise that there will be occasions when interventions are not yet needed, as emerging risks are not yet systemic in nature. To return to our analogy, a good doctor might decide not to start medication, but instead simply monitor a patient’s general health to judge better how to improve it. Macro-prudential policy should be ready to adapt to change, allowing the economy to expand and innovate safely. Change always brings with it opportunities and risks and so our macro-prudential framework will need to evolve. To overuse the health analogy once more, doctors need to adapt. A doctor in the 1960s, for example, would never have had to think about the health effects of vaping. Challenges that lie ahead Ten years after establishing the FPC, we have reached the point where we have both made the case for macro-prudential policy, and built a macro-prudential framework designed to ensure the sector is resilient to stress. In other words, we have pulled together the skeleton for a healthcare plan and convinced the patient that they need it and that it needs to be updated regularly. These are important achievements. Indeed we need to make sure we hang on to them even as memories of the global financial crisis fade. But we need to decide the plan for the coming months and years too. Recent shocks – the  Covid pandemic, and more recently, Russia’s invasion of Ukraine – and structural changes to the financial system have reaffirmed that our work is not yet done.
Rodrigo Vergara: The Central Bank of Chile and the external crisis Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, at a special session held by the Honorable Senate to “analyze and evaluate the economic policy measures that have become indispensable to confront the severe symptoms of international recession and with the purpose of becoming familiar with the Contingency Plan announced by the Supreme Government”, Santiago de Chile, 31 January 2012. *  *  *  Mr. President of the Senate, Senator Guido Girardi, Honorable senators. Thank you for your invitation to discuss the international economic situation and the measures that can be adopted in our country to address an external crisis. These instances are important for communicating the vision of the Central Bank of Chile (CBC) on these issues. In the past several years, the advanced economies have gone through a severe crisis. The causes and consequences of the Great Recession of 2008–2009 have not yet been resolved and we are again enduring periods of external stress that put to the test the strength of our economy and its fundamentals. This forces us to carefully evaluate the current environment, its implications on the performance of our economy, and the measures we can implement if deemed necessary. During the past year, the biggest tensions have originated in the frail fiscal and financial conditions of some economies in the Eurozone. This situation has persisted for a long time and no definitive solution is foreseen in the near term.

Similarly, keeping a floating exchange rate policy points in the same direction, as it provides the proper incentives for prudent management of external liquidity and borrowing. It also helps in the economy’s process of real adjustment when facing a deterioration in the external scenario. In terms of both the exchange rate and access to credit, it is of high importance not to distort the incentives of financial institutions and firms to prudently administer their risks in a complex environment. To sum up, I would like to point out once again that the Board of the Central Bank of Chile strongly believes that as a country, and particularly as a Bank, we are well prepared to confront periods of stress. We are certainly not immune to the events outside our borders, and risks are very high today. We have at our disposal the necessary tools to mitigate the effects of more adverse external conditions but, most importantly, we can and will use them whenever the situation calls for it. Solid proofs of this are the measures we have taken in the last weeks. Thank you.
That episode, which did not initially impact Spanish banks as they had no investments in those products, was actually the trigger for a chain of events and effects on the world economy and financial markets that would soon be felt in Spain. The first symptom seen was the deterioration in financing and liquidity conditions. The authorities responded to this with support measures, such as the programmes for the purchase of financial assets and the backing of debt issues, and the European Central Bank set in place its new and ample liquidity provision criteria. In late 2008 the Spanish economy went into recession. The decline in output and rising unemployment placed upward pressure on bank and savings-bank doubtful assets ratios and the subsequent need for loan loss provisions. This combined with the increase in financial  BIS central bankers’ speeches  1  costs owing to growing dependence on wholesale funding and to sudden difficulties on these markets. Moreover, many institutions, highly concentrated in the real estate development and construction sector, were faced with the housing market grinding to a halt. What’s more, savings banks had a singular legal regime, associated with their legal status, that entailed clear limits on their ability to raise top-quality capital and to set in place the governance rules needed to retain the confidence of third-party investors as to their future.

During 2010 the Banco de España also pursued a series of initiatives to help generate muchneeded confidence. Firstly, in July it took transparency to a new level with the publication of the results of the stress tests, both because of the high proportion of institutions analysed (representing 95% of the system, compared with the figure of 50% required in Europe) and the degree of detail of the information provided. Secondly, it reformed the provisioning system that same month, to ensure appropriate balance-sheet write-downs. And thirdly, it urged institutions to provide the market with highly accurate information on their exposures to the real estate development and construction sector and on their financial structure and liquidity position. Likewise in July 2010, Parliament approved the savings banks reform, included in Royal Decree-Law 11/2010. This paved the way for a new legal structure for savings banks, under which the pursuit of their banking activity may be through a bank, to which the bulk of assets and liabilities are transferred. This corporate model, conceived for adoption on a voluntary basis, although it has become obligatory for savings banks that receive further aid as I shall mention later, is imposing itself extensively on the sector owing to its advantages in terms of the ability to tap the markets for capital, to promote best management practices and to generate the necessary confidence on the part of customers and investors.